As a VC, I am often asked what I look for in entrepreneurs before making a decision. It’s really a combination of the team, technology (key differentiators), traction (market adoption) and a massive market. People are the number 1 criterion. And VCs often look for domain expertise on the founding team. It’s very rare to find entrepreneurs who come from seemingly orthogonal industries, and even rarer to find those who thrive in the new venture.
The fundamentals of the business were really strong and the business was growing really fast so we felt like we were on a rocket ship and building it and probably fixing the motor as well after the rocket ship had launchedShan Kadavil of FreshToHome
Well, let me introduce you to one of the rare gems that the world is getting to know and will get to know over the coming months and years – Shan Kadavil. Shan has made the transition from being the former head of Zynga in India, to co-founder/CEO of FreshToHome, a mission-driven Indian juggernaut in fresh fish, poultry, produce and dairy. The sheer scale and execution velocity of the company was rewarded by investors through an over-subscribed $121M Series C round that was announced last week!
As part of continuing “The Big Picture” series of conversations, I had a chance to sit down with Shan to talk about his FreshToHome journey, scaling the business and raising sizable capital in the middle of the pandemic. Always calm, cool and collected, Shan exudes confidence, something that he effortlessly seems to disseminate to the entire company. Along the way, he takes care of his employees, his partners and his customers, creating almost a cult-like following for the FreshToHome brand. It’s an incredible story. Enjoy!
Mohanjit: It’s a pleasure to have you on this particular interview, which is part of our series, which we call The Big Picture. Iron Pillar wanted to showcase you as somebody who’s been successful across so many domains, it sort of makes my head spin sometimes. One of the things I’d love to start with is talk about your journey to founding FreshToHome.
Shan: It’s been a terrific experience. You know what I used to do earlier – which was to create games like Farmville – it’s certainly very different to sell fish online. Back to how we came to fishing or fish eating as I might say, when I was running Zynga in India, I used to buy fish from an online company called Sea To Home. This was an early stage venture started by my current co-founder Matthew, and this was probably one of the first e-grocery ventures of its kind because he had started this in 2011. When he shut down, a number of things hit me. One – I found that I couldn’t get good fish as a foodie. And the part that really triggered the thought of starting FreshToHome was that here we’ve got an extremely large market – a market that is 90 billion dollars in size and there was no competition! So a bunch of us co-founders joined hands and that’s how we launched FreshToHome and it became extremely successful.
Mohanjit: It’s remarkable! Pivoting to this particular year – when Covid first hit, take me through what were the challenges that you experienced and perhaps continue to experience to a certain extent and how were you able to overcome those as an entrepreneur?
Shan: I tend to look at the bright side of things. This is also a great time or a great opportunity particularly in certain categories if you start thinking that, but it is obviously not smooth sailing. There’s been tremendous amount of challenges. When we started, the Covid news started hitting in February. Our chicken sales went down drastically because there was a rumor that chicken was one of the key ways through which Covid could get transmitted and the chicken prices crashed in the Indian market. Consumer education was a key challenge for us. We crafted that into introducing contactless delivery and this aspect pretty much communicated what we’re trying to do in a nutshell. Communication was the key element in overcoming many of these challenges.
Mohanjit: Keeping in mind the current pandemic are there other pieces of the puzzle that you’ve been able to put in place to be able to scale?
Shan: Yeah, our business is quite seasonal so what we’ve done to handle this in particular this season is because many of the harbors were getting shut down, we’ve got this unique way of sourcing fish through our commodities exchange platform like a virtual auction platform with multiple levels.
In the case of chickens, we went back and we were doing vertical integration to a small percentage of our supply chain. But now we’ve a much larger pool of farmers (for sourcing).
We also then went after the farming element of fish as well because in the Covid scenario, marine fish were most affected since they were traded in large harbors. Instead, we started focusing more on the freshwater fish like crabs, which were essentially captive farming. So those were some of the measures that we put in place. The organization had already scaled up so that helped in scaling these processes as well.
Mohanjit: You have recently closed fairly significant financing. What’s the secret to getting that kind of momentum going and being able to close sizeable financing?
Shan: The fundamentals of the business were really strong and the business was growing really fast so we felt like we were on a rocket ship and building it and probably fixing the motor as well after the rocket ship had launched. So it’s been a big ride that way. In some of the cases, the biggest obstacle was due diligence because investors had to actually visit and there was no real substitute for a physical visit given the operations of our scale. So, we had a Zoom call and then we had various different harbors of ours being showcased live. In general, I think fundraising is not a one-time thing. It’s continuous.
Mohanjit: With that we come to an end to this incredible session. Thank you Shan for taking the time and Iron Pillar is going to be there through thick and thin. Looking forward to working closely with you. Thank you again.
Shan: Thanks guys. Thanks for the partnership.
Bottom line: Shan and team at FreshToHome have indeed built a rocketship, and have turned a transactional model into a subscription one. The company’s customer cohorts look like a SaaS model than one based on e-commerce. Shan and team have nailed the product-market fit, but have also delighted the end customer by delivering competitively priced, fresh produce from source to doorstep incredibly efficiently. And during the pandemic, a convenience and value-based behavior change on the part of the consumer is creating tremendous ongoing tailwinds for FreshToHome. Iron Pillar is beyond ecstatic to be an investor in the company and look forward to the ride to the stratosphere. Upward and onward!