While the unicorn bubble was in full swing in India, start-ups were more interested in discussing their exorbitant valuations than their actual businesses. Back in the day, blue-sky opportunities also meant unheard-of valuations, but a lot has happened since then.
Startups are currently concerned about valuations and keeping their unicorn status, even though they have raised a new round that would put them in the league. Proficorns has taken over as the popular term. Now, the founders want to talk about two essential metrics: revenue and profitability.
Start-ups and their investors are being presented with reality now that the post-pandemic world’s pixie dust of exorbitant valuations has begun to settle down. Even though FreshtoHome, a start-up that sells fresh meat and fish, raised $104 million in a Series D fundraising led by Amazon Smbhav Venture Fund, Shan Kadavil, the company’s co-founder and CEO, declines to discuss valuations.
In 2020 and 2021, during the height of the venture boom, startups raised money at absurd entry valuations. 40 unicorns were born in India alone in 2021, and analysts claim that their entry valuations are already starting to look unsustainable.
Everything you need to know about FreshtoHome’s Plans!
Then the possibilities were limitless and the sky appeared blue. Despite the frenzy, other participants chose to play it safe and refrain from raising cash at exorbitant prices. Customers are aware of this fresh meat and fish vendor, but its owners feel that what is not mentioned is its technological prowess. It has consistently put a premium on profitability, which is why it intends to list on the stock exchanges.
The meats and seafood offered by FreshtoHome are free of preservatives and antibiotics. In 2015, Kadavil, who has experience working in Silicon Valley and has also taken a couple of businesses public, teamed together with other colleagues to start FreshToHome. This D2C startup wants to list on the stock market within the next three years.
Since its founding, the startup has raised $254 million in total. The most recent round may have produced India’s next unicorn, but Kadavil won’t reveal the details because of concern for privacy.
Instead, he favours discussing the business’s earnings, which currently total ₹1,100 crores, and ranks it as the largest organized player in the nation in terms of revenue. The new business has reached operational profitability with 40% gross margins. Realizing net profitability is the following goal. The business has established a reputation as a provider of fresh, hormone- and antibiotic-free meat and seafood.
FreshtoHome’s top executives invested time in creating the technology for the commodities exchange, offering them an unfair advantage over competitors. The basis for delivery operations is a strong supply network. Hence, within 24 hours of the catch, the commodity is shipped to a Delhi client who placed an online order. Produce is supplied following delivery to regional centers and processing there.
The actual retail network will be expanded from 30 to 100 through the $104 million raised. Because India still prefers to buy fresh fish at wet marketplaces, real outlets are beneficial. This has made it simpler to persuade clients to use the internet. Vessels continue to arrive at harbours, where fishermen sell their catch to intermediaries who then sell the fish at auction.
Because it would be impractical to open brick-and-mortar locations in all 5,000 harbors, FreshtoHome has an internet exchange where it purchases seafood from fishermen.
Farmers can use the exchange to sell their fish online for a better price by taking a photo and uploading it. The constant mismatch between supply and demand at harbors enables organized actors to employ technology to negotiate the best pricing. The category, according to him, is rife with middlemen. The intermediaries also serve as small-scale fishermen’s lenders. 43% of sales are made up of fresh seafood, which FreshtoHome purchases directly from harbors and auctions.
