Agri-tech startup Daily2Home is an on-demand supplier of fresh vegetables and fruits that is part of the crop of firms increasingly looking to tap the potential smaller cities hold.
At a glance
Founders: Atul Chauhan, Siddharth Singh, Kapil Sahu, and Ravi Dutt Sharma
Year it was founded: 2014
Where is it based: Agra
The problem it solves: Getting fresh vegetables delivered at customers’ homes, while providing steady stream of revenues to farmers.
There is a certain joy to be experienced while working with fresh produce in the kitchen. It holds many health benefits and tastes pretty great. But we city dwellers do not get access to fresh fruit and vegetables all that often and we are forced to resort to whatever we have at our disposal.
Some startups, including Agra-based Daily2Home, are now cropping up to solve such pain points. The agri-tech startup boasts of providing fresh fruit and vegetables at the click of the mouse in the cities of Agra and Mathura.
Kapil Sahu was a trainee for Probationary Officer (PO) at Manipal Bank of Baroda Training Institute and it was then that he came in touch with Atul Chauhan in early 2014. Being like-minded individuals, they gelled quickly and started discussing their entrepreneurial dreams. “When Atul was pursuing his Master’s in Agri Business, he used to come up with various agri-related ideas. During his days in IIM Ahmedabad, Atul had studied a lot about the inefficient supply chain of fruits and vegetables and how this led to a lot of food wastage,” Kapil explains.
The duo also invited Atul’s friend Siddharth Singh to join them in their endeavour. Atul knew Siddharth from his CAT prep days. After finalising the blueprint, the three started their entrepreneurial journey in 2015. Ravi Dutt Sharma, another friend of Atul’s, had been helping them right from the start, but joined them full time in January 2017.
The founders had their eureka moment when they realised that the sector had no players in smaller cities. Daily2Home was thus born, and Agra was chosen to be the testing ground because it was Atul’s hometown and help could be easily found.
Atul is a food tech engineer and agribusiness graduate from IIM Ahmedabad and has worked for Gati Logistics. Siddharth is an agribusiness graduate from IIM Lucknow. Kapil Sahu, an alumnus of IIIT Jabalpur, has over a year of banking experience with Bank of Baroda. Ravi was an early investor but formally inducted into the company as co-founder later.
Apart from the founders, the firm has more than 20 employees, both part time and full time on its payroll.
The company started as a B2C business. From serving over 50 customers a day initially, the firm has scaled up its operations and is currently serving 500 B2C patrons. In the B2B segment, the firm has more than 90 customers including the likes of The Akshaya Patra Foundation, Subway, Pind Balluchi, Sagar Ratna, Goli Vada Pav etc. B2B operations started in May 2015.
There were also few initial hiccups like last-mile delivery and ensuring service quality were maintained for low order size deliveries too, even if delivery distance was more. The other problem centred on challenges in low-cost procurement. Also, the availability of products from farmers is highly seasonal.
Atul says, “We overcame the challenges by first getting a small cold room, which gave us the much needed buffer. We also built a hub-and-spoke network for retail sales by tying up with local grocery stores all across the city, thereby reducing our delivery distance to less than two kilometres. We invested in technology that made us more efficient in our operations. Also, app-based ordering has been a huge success in our B2B business.”
There are three types of deliveries. The express delivery ensures that customers get their products in an hour’s time (on a minimum Rs 200 order). In a normal delivery, the turnaround time is two hours (there is no minimum order size requirement here). If customers place an order a day in advance, they will get their products next morning and get a five-percent discount.
In FY17-18, the firm’s revenue stood at Rs 1.98 crore, seeing a growth of over 50 percent compared to the previous year. According to the company, the fresh fruit and vegetable market size in India is about $200 billion.
There are a few agri startups focusing on Tier II cities, like Freshokartz in Jaipur and Freshboxx Ventures in Hubli. Agriculture contributes about 15 percent of India’s GDP and fruits and vegetables constitute about 30 percent of that makeup.
Currently, Daily2Home has partnered with four grocery stores. By the end of the year, the firm plans to partner with 20 more in Agra. “We have already started operations in Mathura. We are planning to start operations in Jaipur, Lucknow, Indore and Bhopal in this current financial year,” Kapil says, adding, “We plan to increase our customer base in the B2C segment to 2,000 per day by FY19, and in B2B segment to around 150 customers. Our revenue target for FY19 is Rs 10 crore and, by 2020, we want to achieve a revenue of Rs 50 crore.”
“We are also promoting individual farmers who are growing better products by either not using pesticides or growing products that are better in terms of their characteristics (size, taste, sweetness etc). We promote them through SMS to customers. For such products, customers can place an order on phone or purchase them in our partnered grocery stores. We will scale up this programme in coming days. Presently, we are promoting only two farmers, but in winter, Agra region grows more vegetables and fruits, so we promote up to 40,” Kapil says, adding that these direct promotions of local farmers among customers is one of the startup’s main USPs.
“We locate farmers at the Agricultural Produce Market Committee (APMC) mandi. We build a relationship with them from there. We go to their farm and see their agri process and finalise the relationships,” Atul says.
The firm’s business model has evolved over the last three years, from a B2C home delivery company to a fruit and vegetables supply chain company. It claims to have developed the expertise of providing low-cost delivery solutions for fresh fruits and vegetables especially suited for Tier II cities.