Why this fintech founder found the meat business ‘meaty’
TenderCuts is a Chennai-based meat procurement omni-channel platform. Leveraging agile and robust technology, they aim to provide meat and seafood lovers with clean, hygienic, and quality food.
In early 2015, Nishanth Chandra successfully exited EBS (e-Billing Solutions), a payment gateway for Indian merchants, to France-based PoS terminal market leader Ingenico. After the exit, he took a break, and decided to travel, visiting several countries across Europe. During this time, he came across local meat markets, which he found to be impeccable.
Elaborating on this, Nishanth says, “The meat was clean, hygienic, and even had multiple choices of grading, for the customer. This made me reflect on the situation back in India, where, although meat is consumed in huge quantities, the general standards observed are poor and unhygienic, with no compliance with FSSAI standards.”
Noticing the huge gap in quality between the Indian and European meat markets, Nishanth was prompted to start TenderCuts.
Seeking a share of the pie
The size of the meat market in India is estimated at a whopping Rs 2 lakh crore, and expected to triple by 2020, according to a 2016 India Food report. As much as 90 percent of this market, however, is unorganised.
Little wonder that startups are now gravitating towards the space, working to organise it. Some players already claim to have broken even. Licious has even raised Series B funding to the tune of $10 million. FreshToHome is another startup that has a strong foothold in the space, and one must also not forget BigBasket’s meat segment.
The demand for fresh meat and the lack of quality options in the traditional seller-centric market largely drive the online meat selling market in India. Factors such as an increase in protein intake, a preference for fresh meat over frozen, and the lack of hygiene in the traditional meat markets have all come together to give rise to this form of business, which has better supply chain management and technological intervention than the offline options.
Focus on quality
TenderCuts sells through retail stores and direct orders from their website and call centres, and are soon to launch a mobile app as well. The platform claims to sell fresh and hygienically processed, chemical/preservative-free, RO washed, and pre-cleaned meat/seafood. It also claims to have a cold chain technology that preserves the freshness of the meat.
The meat is sourced from local communities and handled by trained personnel at their state-of-the-art and fully automated facility, where the pre-cleaning and washing of meat is done with RO purified water. The team guarantees a home delivery within 90 minutes.
Building the team
Once the idea was in place, Nishanth roped in his team with the aid of friends, colleagues, and references. The core team of TenderCuts consists of nine people from across various backgrounds like logistics, marketing, food safety, and recruitment, bringing with them considerable experience with companies such as D.E. Shaw, SAP, Puma, Suguna, Medplus and Subway.
In addition to the core team, Dr Pashupathi consults and does weekly audits for TenderCuts in the capacity of a food safety consultant through his company, Parikshan, which consults for companies like GRT Hotels, Marriot Hotels, and Rain Tree.
Growth and future plans
The team started its pilot phase in January last year with one store in Chennai, and has since September last been expanding its deliveries to cover most of the city. The team claims to have over 25,000 customers. “We plan to launch the B2B revenue model shortly. We are also focusing on selling our products through retail outlets. We have also received angel funding from Suresh Krishn, MD of Isha Homes, who has invested Rs 4.6 crore in this venture,” says Nishanth.
He adds that TenderCuts’ backend technological systems are agile and optimised with robust inventory management systems that map and track parent-child SKU relationship and help to reduce wastage and ensure faster delivery.
“The meat cuts are made using optimisation algorithms to reduce meat wastage. There are optimum prediction algorithms that help predict customer order behaviour and reduce product unavailability and wastage. Sorting and grouping algorithms are in place to automatically sort and group orders in increasing ‘order density’ per driver, thus saving on cost per delivery,” says Nishanth.
The team also claims to have worked on backward integration of supply chains for goat/sheep farming, and is strengthening its supply chain in seafood through direct integration with fishing boats. The complete process is tech-enabled and seamless. Nishanth concludes,
“We are currently focused on backward integrations in building supply chains in goat/sheep meat, strengthening the supply chain in seafood, and expanding to other cities within the next year. Our target is a Rs 100 crore top line within the next three years. For that, we plan to launch a big-bang marketing campaign to acquire customers through radio, newspapers, OOH, and social media. We also have plans to further strengthen our tech frontend with the launch of our mobile app to drive customer engagement and retention.”