Licious founders on building a unicorn startup based on what the consumer wants
Co-founders of online meat and seafood brand Licious joined us at TechSparks 2021 to discuss how listening to the consumer helped them create a new category in D2C business.
Online fresh meat and seafood retailer has always heard out its customers and it helped the company build a unicorn startup. Founded in 2015 by Abhay Hanjura and Vivek Gupta, Licious started its journey when direct-to-consumer (D2C) brands barely existed in India.
In a candid conversation with Shradha Sharma, Founder and CEO of YourStory, at TechSparks 2021, Abhay and Vivek talk about how they want to build a brand similar to Amul.
For a category which was sold in black polythene bags, Licious brought in standardisation and quality measures to an industry where none existed. The startup had to battle existing practices and biases from the industry, as well as venture capital investors who assumed that India was largely a vegetarian country.
“India is divided into many ethnicities and every 100 km, food choices change. How do you give a Maggi kind of solution across categories? We call it mass personalisation. If you build for depth of the market, you will get to know the customer better and the cost comes down,” said Vivek.
The founders have seen this focus validated by big-name investors including Temasek joining their board, encouraging them to think big. The journey hasn’t been an easy one, acknowledged Vivek and Abhay.
Changing consumer habit
In its first year of operation, Licious served only 40 percent of Bengaluru city, covering areas such as Indiranagar, Koramangala, Outer Ring Road, and some parts of Whitefield. The company registered Rs 1 crore in monthly revenue within six months. Cut to present, Bengaluru alone has grown to 150 percent of the initial revenues.
Earlier this month, the fresh meat and seafood brand raised $52 million, entering the unicorn club at a post-money valuation of $1.05 billion. The startup wants to scale its product to other geographies and claims to have a unique customer base of 2 million.
To serve its customer base better, the founders at Licious wanted to create an end-to-end model where it has control over farm to processing to last mile delivery.
“There was no cold-chain last-mile delivery back when we started as it was mostly meant for delivering hot food. So, we built a logistics company at the front-end, a manufacturing company at the back-end, and an internet company in between,” said Abhay.
He added that this was met by scepticism from potential investors, but if the company hadn’t built this, consumer expectations couldn’t have been met.
Keeping faith
Licious struggled to raise its Series B round as the Indian ‘vegetarian’ capital ecosystem, as Abhay calls it, found it difficult to stomach the fact that chicken would be widely consumed by users and ordered as frequently.
“Indian consumers are very discerning, but we have always been told that global products can be replicated in India. There has been a shift in customer behaviour which demands Indian solutions to the problems,” said Vivek.
He added that back in 2016, D2C adoption was slower, transactions were not frictionless and phones had limited apps. These set of issues have gone away over time and consumers have made a choice. While Licious calls itself channel-agnostic, 95 percent of its orders come through its app or website and 90 percent customers are repeat buyers on the platform.
The founders are focused on solving for supply chain and food technology, reducing wastage in an industry where the shelf-life of the product is 48 hours.
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Edited by Saheli Sen Gupta