FreshToHome, an Indian business that offers fresh fish and meat to customers in the Middle East and South Asian markets, has wooed Amazon as a new investor.
The two businesses said Tuesday that Amazon, through its Smbhav Venture Fund, which focuses on India, led a $104 million Series D fundraising round in the Bengaluru-based startup. The Dubai government and Iron Pillar both contributed to the new round of funding for the firm, which is also supported by the American government’s development agency.
The $250 million Smbhav Venture Fund has now written its largest check. FreshToHome has now raised more than $250 million overall thanks to the latest round.
FreshToHome, founded in 2015, is one of the major competitors vying for a piece of the $100 billion Indian fish and meat market. The majority of Indians are not vegetarians, but the market is now run using a time-honored methodology.
With its meticulous processing facilities and extensive supply chain network, FreshToHome is bringing efficiency to the market by streamlining the infrastructure for sourcing meat and fish and enhancing the quality of the food and their delivery times.
For example, a customer ordering fish from Delhi to Dubai on a Monday will receive their order, which was purchased on Monday AM, by Tuesday.
But building client confidence is one of the major obstacles for FreshToHome and a few other firms competing for the same $100 billion Indian meat business. In India, the wet market accounts for the lion’s share of all sales of meat and fish since it allows clients to examine each item before parting with their money.
Shan Kadavil, co-founder and CEO of FreshToHome, stated that it took the business around seven years to build the current competitive moat.
“My co-founder exports seafood. He has been in business here for more than three decades. You have to implement this change at the grassroots level, which is quite challenging. In addition to technology, this business is also about people and relationships, according to Kadavil, who ran Zynga’s India operations and Support’s tech support department before launching FreshToHome.
Getting the fishermen, fisherwomen, and poultry producers to stop using cash is one such trust element. Unit economics constitutes the second competitive moat. Kadavil refuses to reveal the startup’s valuation in the current round, only stating that it is operationally profitable and “proficorn” (the synthesis of soonicorn and profitability, evidently).
According to him, FreshToHome has increased its footprint by over 100% in the previous year and now provides more than 2,000 certified fresh and chemical-free items to millions of clients in over 160 locations in India and the UAE, as well as over 4,000 fishers and farmers.
FreshToHome operates a dozen brick-and-mortar stores, but these are not new properties it’s leasing but partial refashioning of its existing warehouses and plants, said Kadavil, adding that the startup will open up more such stores in the coming months as it doubles down on an omnichannel bet. FreshToHome sells the vast majority of its products online today, including through Amazon.
As it boosted its logistical network in the South Asian market in recent years, Amazon has entered the grocery and fresh categories in India, but in recent months, the American behemoth has pulled back from many business lines in the nation as it struggles with the state of the global economy.
Kadavil stressed that the investment from Amazon is simply financial and not strategic per se. An investment in FreshToHome could be Amazon’s strategy to temporarily give the company the meat and fish industry.
A representative for Amazon Smbhav Venture Fund stated in a statement, “Our objective with the $250 million Amazon Smbhav Venture Fund is to empower the next generation of innovative, technology-enabled firms driven by visionary founders.”
“We are excited to partner with FreshToHome for the next stage of its growth because we are impressed with the management team led by Shan Kadavil and they have done some quality work in creating a robust technology-enabled supply chain and scalable backward integrated capabilities to serve both customers as well as farmers and fishers.”
