[Startup Bharat] How Jharkhand-based LFYD is helping local businesses compete with retail giants
Founded in October 2020, Chaibasa-based startup LFYD helps people avail information regarding active sales, offers, and discounts running in nearby shops, especially in Tier II and III areas.
Satyajeet Patnayak always wanted to be an entrepreneur. “I wanted to work hard towards solving a problem and thought why not do it myself,” he tells YourStory.
After graduating, he joined electric vehicle startup EGreen Vision as a co-founder but exited due to operational issues.
Keen to start his next startup, Satyajeet started looking for ideas. Growing up in Chaibasa, a town 50 kilometres away from Jamshedpur, he was acutely aware of the lack of shopping experience in smaller towns.
Also, local businesses often had to compete with large and well-funded online companies.
These challenges became even more apparent last year when he saw his uncle, who had been running supermarts in Odisha for 20 years, unable to have a footfall even after lockdown restrictions had lifted.
Deciding to find out more, he carried out a survey of over 2,500 shops across five cities and found that local shops and other small and medium businesses did not have a platform to help them inform their customers about discounts and offers they were offering.
“For any newly set up shop, the challenge only becomes bigger,” says Satyajeet.
So, he and his father Dharam Chand Patnaik set out to solve two problems — help people in small towns have a good shopping experience and help SMBs to grow their business — and launched(Let's Find You Deals) in October 2020.
LFYD is a digital platform that informs people about nearby offers, focusing on areas underserved by ecommerce players and big brands, and helps small and medium businesses to grow without going online.
The startup was launched with the founders' own savings of Rs 10 lakh.
How it works
Chaibasa-based LFYD creates a smooth flow of information of active sales, offers, and discounts across nearby shops, particularly in Tier II and III areas. It focuses on bakeries, shops selling shoes, groceries, jewellery, eateries, apparel, home furnishing, and more.
LFYD works on a B2B2C model, which gives a win-win solution for both the shoppers, as well as the local businesses. It has created two apps, one for businesses and one for customers. The business app allows businesses to gain more visibility and customers by posting offers and discounts on their products.
At the same time, the customer app is constantly updated with the live sales and offers in nearby shops.
LFYD primarily earns revenue from ads. It has a freemium model, where businesses can get listed on the platform for free but can choose to pay to promote their offers. The consumer app also has an in-app payment option and when customers pay through the app, the startup charges a small commission fee.
“Despite the multiple revenue channels that LFYD capitalises on, ad tech continues to be a major source,” says Satyajeet.
The startup claims to cater to more than 40,000 customers with over 3,500 businesses and 150 brands registered on the platform. It is present across 10 cities in four different states, and has recorded more than one lakh transactions in the last six months.
“With an average monthly user growth standing at 78 percent, LFYD has generated a Gross Market Value of Rs 2.5 crore and a total revenue of Rs 16 lakh since February 2021,” says Satyajeet.
Market and competition
Satyajeet says that there is no direct competition for LFYD. There are ecommerce platforms like Amazon and Flipkart that enable SMBs to sell online, or platforms like Bikai that help businesses sell via WhatsApp, or platforms like Nearbuy or CouponDunia that cater to niche customers and businesses.
LFYD's USP lies in catering to last-mile businesses, and buyers who still want to buy things offline, even from big brands such as Allen Solly, Khadims, Levi’s, Wrangler, and Bata that are some of the startup’s partners.
“We cater to the smallest business and even large brands but our focus is hyperlocal,” adds Satyajeet.
In terms of market size, LFYD sees a massive opportunity in empowering millions of SMBs in India. According to Statista, India has more than 63 million micro, small and medium businesses.
Funding and plans
The startup has been bootstrapped with a total of Rs 20 lakh so far, and is backed by accelerators including NASSCOM, Bihar-based Karekeba Ventures and India Accelerator.
Going forward, it wants to raise external capital of Rs 1.5 crore to expand its operations across 20 cities, including metro cities like Kolkata, Pune, and Bengaluru.
LFYD is also in talks with multi-brand outlets, with plans to tie up with over 100 clothing and retail brands and major players like Aditya Birla and Louis Phillippe.
“We are still a new company and we will keep evolving as far as we are helping the hyperlocal segment. Be it delivery, services, or discovery,” signs off Satyajeet.
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Edited by Saheli Sen Gupta