Niriha Vending Systems: “Why must you buy a bottle of water when all you need is one glass of it?”

In our effort to revisit some of the excellent ideas that we’ve covered earlier, we at YourStory spoke to entrepreneur Srinivas Mahesh Reddy, the man behind Niriha Vending Systems (read last year’s story here:). The business idea was born out of a simple question – why must you buy a whole bottle when all you need is one glass of water to quench your thirst? Mahesh set out to answer this question and his solution was a tamper-proof vending system which dispenses pure water at Re. 1 per glass (200ml). We spoke to him to understand the sort of progress that Niriha has made.Mahesh, it’s been more than a year since you last spoke to YourStory. How have things changed?

Things have changed quite a bit, actually. After YourStory covered Niriha, we got the sort of exposure that we badly required – attention from investors. I started Niriha in 2004 and I was going all out to find funding for my small enterprise. Ranjan Singh of MSME took notice of the YourStory article and finally, we got funding worth Rs.6 lakhs in March 2010.

That’s wonderful.  How have you used this money?

Originally, I was based in Chennai. But once the funding came in, I moved my entire setup to Tirupati. I wanted to start off at a place where people congregated in huge numbers. Tirupati seemed like the ideal choice for me to start selling glasses of water. We’ve already installed 22 machines all over Tirupati. By the end of December, this tally should go up to 90.

What about return on investment?

Each machine costs Rs.12,800. Currently, I have installed them free of cost. I make money by supplying the cans of water and the paper tumblers (plastic is banned in Tirumala-Tirupati). The machine accepts only our cans and does not accept a can more than once, thereby preventing unauthorized refilling. Each can delivers about 100 glasses of water, with each glass bearing 190-200ml. You drop a 1 rupee coin into the vending machine and it gives you a glass of pure water. It’s that simple. Even if I manage to sell 2 cans of water at every machine, I’d make a neat profit after all the operating expenses.

What are the challenges that you have faced?

The biggest losers, since our entry into the Tirupati market, have been the suppliers of water packets and bottled water. They have resorted to all sorts of tomfoolery, which includes switching off the machine during peak times and coin blockage. I did not expect these issues. But I have learnt to work my way around them.

What next?

I plan to go for another round of funding after December when we stabilize our presence in Tirumala–Tirupati. We understand that we are a startup and hence, when going for funding, we need a great deal of data. We’re gathering that. As an entrepreneur, I’m learning something new every day. And there’s a continuous effort on to make our product better.

By innovating disruptively and reducing the ticket size of the transaction, Mahesh has a robust model in Niriha, one that is constantly evolving. We at YourStory wish him all the best. To know more about this promising startup, please visit http://www.niriha.com/.

Sriram Mohan | YourStory | 27th October 2010 | Bangalore