FreshToHome (FTH), a fully integrated e-commerce fish and meat brand, raised $121 million, the largest ever series C stage funding deal in the e-commerce space. The round was led by Investment Corporation of Dubai (ICD), the principal investment arm of the Government of Dubai, Investcorp, Ascent Capital, the US government's development finance institution DFC, the Allana Group and other investors. Iron Pillar, the lead investor from Series B also chipped in $19 million in the current round. Investment into FTH also marks the first equity investment of DFC in India. Speaking to Business Today.in, Shan Kadavil, Co-Founder and CEO of the company says such a large investment in such times is primarily a reflection of investors looking at reasonable safe bets.
Euromonitor estimated the total consumer market size of the fish and meat segment in India in 2019 at around $94 billion. With online penetration of less than 0.3 per cent of the total market size and the rest controlled by unorganised sector (wet markets), for FTC quality and safety have been cornerstones of strategy and a key differentiator. "We always believed that from a business standpoint, we wanted to offer the best quality for end consumers. It was always our vision to vertically integrate the supply chain. We realised consumers need something special," says Shan.
Using its US patented commodities exchange technology, FTH app allows fishermen and farmers to trade, just like it happens in auctions. It has over 1,500 fishermen across 125 coasts and livestock farmers and others who directly produce/ rear and sell to the company. Shan further explained that by cutting off middle men, the company has been able to pay nearly 20 per cent higher price compared to the market and facilitate large scale contract farming for fish and poultry assisted by technology and assured market access. "In reality what you think is fresh, is food that has either ammonia or chlorine or formalin in the fish supply chain because it takes four days to reach from the coast to the cities. India does not have a cold chain and additionally in the case of poultry it has got antibiotics in it," says Shan. Apart from direct sourcing, the company manages its logistics through franchises, marketplace vendors and owns and runs a large fleet of logistics, particularly cold chain and trucks, collection centres and the infrastructure to handle fish at coasts. After the stock enters cities, the temperature-controlled hubs and processing centres process the fish and meat. "It is a big capex in the back-end infrastructure and is a combination of both which has helped us be successful in the market," Shan further says.
With the current investment, FTH plans to aggressively expand its footprint in India. "The biggest growth will come from India and we will expand across all the tier-1 cities and immediately in Calcutta, the only metro where we are not present today. Additionally, at the international level, we are deepening our presence inside UAE and Saudi Arabia," he adds. With 15 lakh orders every month and Rs 600 crore of revenue on an annualised run rate on the platform, FTH says it is EBITDA profitable in several large cities that it operates in and has user retention of nearly 95 per cent and a healthy conversion rate of first-time users. "We are now in the process of going through an omni-channel strategy. We are approaching stores and other ways to tap into the offline market," says Shan.