Bengaluru-based procurement startup BazaarNXT is riding India’s foodtech boom
Since 2015, food delivery companies Zomato’s new acquisition UberEats have changed the way Indians eat – many now opt to dine in, rather than dine out. With an average of close to 500,000 orders a day, these companies may be slugging it out for market share, but there’s one thing they have in common: the need for good packaging., and
Restaurants and food delivery partners know that their reputation and customer satisfaction is directly proportional to the packaging.
And Dhananjay S, former Co-founder of intra-city food delivery company Zipd, realised this in 2017 when he noticed how restaurants procure their raw materials.
“Procurement was highly unorganised and inconvenient for both, vendors and restaurants,” says Dhananjay, the Founder of Bengaluru-based.
Launched in 2019, BazaarNXT takes care of end-to-end packaging and procurement for restaurants. It works as a marketplace, bringing all manufacturers under a single roof, and giving a competitive edge over price, quantity and turnaround time (TAT).
“Bazaar means a market. Because these restaurants were buying their raw materials from the local market or vendors, we thought BazaarNXT was the right name as it is a modern, futuristic and extended version of the local bazaar, powered by constantly evolving technology,” Dhananjay says.
The founding team of procurement startup BazaarNXT.
The team and background
Dhananjay had, along with Gaurav Badarkhe started ShopClients Consulting Services in January 2017. ShopClients addressed the basic problems associated with the restaurant procurement space. The duo hired Vikram Raja, former Co-founder of Bengaluru-based laundry startup RinseUp, who now leads the Operations.
In early 2019, the trio decided to narrow their focus to address major issues that restaurants face when it comes to packaging material supplies, and rebranded the company as BazaarNXT.
Dhananjay, 30, is a seasoned entrepreneur. He has more than seven years of experience across hyper-local, logistics, food and beverage, and training domains. He holds an MBA in finance. Gaurav, 23, who decided to skip formal education after Class 12, currently heads technology development at BazaarNXT. Vikram previously worked as an Assistant Manager at edtech unicorn.
BazaarNXT at present has tech, purchase, and sales teams. The tech team has two back-end developers and two front-end developers. The five-member purchase team is focused on pan-India manufacturer on-boarding, and the sales team is 20-employee strong.
The startup also has 20-plus people working at the micro and master fulfilment centres, to handle last-mile operations.
Procurement on one platform
BazaarNXT is empowering micro entrepreneurs, or Fulfilment Centre Partners, to set up small fulfilment centres across cities and serve restaurants within a 5 to 6-kilometre radius.
“We help with the sourcing, technology, and marketing; our partners bring in capital and teams to manage last-mile operations,” Dhananjay says.
The startup takes care of complete packaging solutions for restaurants, including carry bags, aluminium foil containers, tissue papers, thermal rolls, bagasse and paper-based products, and tea/coffee flasks, among others.
According to the founders, the number of SKUs that the startup sells is over 400. This number is continuously evolving and exponentially growing, based on customer demand. On average, BazaarNXT sells 1.1 million food packaging containers and over 1.4 tonne of paper products.
BazaarNXT clocks more than 870-plus orders in a week.
The procurement startup also helps restaurants with brand creation -understanding the needs, design of the product, finding the right material, cost analysis, pilot production, customer feedback and questions, and product release.
The team at BazaarNXT.
BazaarNXT has on-field salesforce that meets customers door to door, educating them about its product offerings. The team also educates restaurants about packaging materials permitted by local municipalities and state governments.
To on-board micro-entrepreneurs, the startup runs a ‘Fulfilment Centre Partner Programme’. At present, it has one master fulfilment centre in Bengaluru and five micro-fulfilment centres across Bengaluru and Hyderabad. The master fulfilment centre takes care of feeding all the micro centres’ procurements.
“We have 100-plus applications to set up fulfilment centres across India,” Dhananjay claims.
BazaarNXT doesn’t charge restaurants/clients any fee. It levies a flat fee on its fulfilment partners to help with services.
Some of the restaurants and chains that BazaarNXT caters to in Bengaluru and Hyderabad include Bathinda Junction, Anjappar, Truffles, Mughal Treat, Vasudev Adigas, Pakwaan Grand, Hyderabad Chefs, and Southern Spice.
Institutional clients include Swiggy, FoodPanda, Potful, Rawder, EatyKart and SeaShell, among others.
Clients for its branding services include Anjappar, TOT Cafe, The Four Seasons Restaurant, and Hyderabad Chefs, among others.
The food packaging industry and outlook
NRAI IFSR 2019 estimates that the Indian foodservice industry market size was at Rs 4,23,865 crore ($62 billion) in 2018-19, which is expected to grow at a CAGR of 9 percent to reach Rs 5,99,782 crore ($88 Bn) by 2022-23. Restaurants spend approximately $10-11 billion on raw materials and packaging container procurement.
BazaarNXT’s competitors include Zomato’s HyperPure, Bizongo, AdUrCup, and Pacfo.
But Dhananjay says the startup has a differentiator. “We are unique because of our asset-light business model.”
BazaarNXT’s overall sales are growing at up to a 30 percent month on month. While the startup refused to share revenue numbers, they claim to be getting at “$5 million to $6 million ARR by March 2020”, he adds.
The startup has served more than 3,500-plus retail restaurants, and delivered 9,300-plus orders since March 2019.
“We are working on adding another 8,000 to 10,000 restaurants before March 2020,” Dhananjay says.
The startup has raised $4,50,000 from a bunch of angel investors from Singapore and India, including Suresh A Mahadevan, CFO at SureCash; Saad Ahmed, Director of BD and Partnerships at GrabFood; Kiren Tanna, Co-founder of ZenRooms; Suresh Kumili, Head of Alternate Delivery Models at Delhivery; Shubhrendu Koche of Finablr; and Vidit Agrawal from Stripe.
Green road ahead
BazaarNXT has been witnessing more demand than supply. This, Dhananjay says, is “due to the plastic ban and the increase in the number of people ordering in”.
Since inception, BazaarNXT has sold over 25 tonnes of paper products, preventing the emission of 150,000 kilograms of carbon dioxide. The startup aims to bring down its carbon footprint to less than 10 percent by mid-2020.
The startup is also working on diversifying its offerings into segments such as packers and movers, and small-scale electronics manufacturers.
“We are in need of growth capital to capitalise on the opportunity, for which we are raising our Series A round. We will be closing it in the next three to four month's time,” Dhananjay says.
(Edited by Teja Lele Desai)