This Seafood Startup Leverages Tech To Reduce Friction In Traditional Seafood Trade
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India is the second-largest seafood producer in the world. However, the sector faces countless challenges such as fragmented supply chain, insufficient cold chain infrastructure and lack of food safety compliant mechanism, among others.
This has led to demand outstripping supply, thereby opening up opportunities for businesses that can leverage technology to disrupt the large, traditional and unorganized industry.
Captain Fresh is one such startup that is focused on aggregating the fragmented retail demand across the country and linking them to small fishermen and farmers across the Indian coast. The B2B startup recently raised $12 million in a Series A investment round from Accel, existing investors Matrix Partners India, Ankur Capital, Incubate Fund and angel investors.
Launched in 2019, the startup claims to focus on reducing distance and thereby time between harvest and retail. “We do this by ensuring that we have a robust demand and supply matching framework that eliminates multiple handshakes on the way and directly routes products from source to final retailer in the least time possible,” Utham Gowda, founder and CEO, Captain Fresh, told Entrepreneur India.
The Beginning Of the Journey
For Gowda, who was an investment banking analyst earlier, the entrepreneurial journey started in 2015 when he stumbled upon seafood as a sector with huge potential to undergo transformation enabled through the allocation of smart capital and sophisticated management. Over the years, across multiple roles including at a leadership position at Nekkanti Sea Foods Ltd, he spent a lot of hours across the coasts, fish farms, processing factories in India and a few other international markets, wet markets across multiple cities and met hundreds of stakeholders to get to the core of the issue.
“We have been consuming fish for much longer than producing clothes or driving vehicles, so it was intriguing to explore the real reason behind the seafood category lagging every other category in terms of evolution. While the problem statement was clear, entry point into the value chain, sequencing of business moves and nimbly navigating this maze was an exciting journey in itself,” he said.
The Startup’s USP
The startup manages to absorb the structural uncertainties in the supply chain by leveraging tech to orchestrate supply and demand matching. The startup has a digital commerce platform that is used by meat and seafood retailers across general trade, modern trade, poultry stores and online D2C brands. The platform serves as a virtual fish market acting as a digital alternative to the wet markets connecting the farmers and fishermen and the end retailers.
It handles 20 tonnes per day servicing 600-plus retailers, in seven major cities and 12 delivery centers spread across four states including Maharashtra, Karnataka, Andra Pradesh and Telangana. The fish is sourced from over 50 collection centers spread across the eastern and western coast and freshwater ponds.
The startup also claims to offer a freshwater and marine range of more than 60 SKUs and 90 percent of its deliveries are done between 6 am and 9 am every day.
- Year Launched: 2019
- Total Funding Received: $16 Mn
- Funding Stage: Series A
- Key Investors: Accel Partners, Matrix Partners, Ankur Capital, Incubate Fund, ADB Ventures, Nekkanti Sea Foods, Sandhya Aqua
- Retail partners: 600+
- Fishermen partners: 300
- Cities present: 8 across Maharashtra, Karnataka, Andra Pradesh, Telangana
- Delivery centres: 8
Leveraging Data Analytics And Other Tech
Captain Fresh has a supply-demand matching engine that gathers bids from the suppliers from across the coast and matches to the predicted indents from various channels across multiple cities. It uses a proprietary algorithm to maximize the speed of delivery to the customer.
On the demand side, it is in the process of creating a platform to simplify the process of running retail fish shops for entrepreneurs of different genres. The startup uses data analytics to forecast demand for every SKU at a DC level within a city and that’s used to procure good quality fish at the best prices from 50-plus collection centers across the country. Once this is procured, it uses temperature-controlled vehicles to move this to the demand center from the source in the lowest possible time thereby maximizing quality and freshness.
“Today this one single stem involves multiple agents and cross docks which is replete with inefficiencies. Given this is a high-value high-demand product, delivering in the shortest time possible automatically drastically reduces our dump and helps us maximize value through the supply chain,” he added.
The startup claims that it gives the highest value back to the farmers and fishermen as it is able to procure at the highest market rates given it maximizes margins in the supply chain by creating a low touch and direct to retailer model. To date, it has partnered with more than 250 fishermen from 50-plus collection centers to service 600-plus retailers in B2B and B2R segments.
The seafood space today has many startups that are quickly climbing the ladder of success, such as Licious, FreshtoHome and TenderCuts.
When asked about the rising competition in the space, he said, “We are competing with the unorganized market which still forms more than 99 per cent of the seafood overall market. The biggest pain point to solve in this market is consistent reliability, that is the ability to provide a complete basket of fish, directly from the source, at the highest quality daily to every one of our retail partners.”
He also added he would like to see more organized players venturing into this space to develop the ecosystem so that India can emerge as a stronger player on the global map.
Talking about the edge that Captain Fresh has, Krishnan Neelakantan, managing partner, Ankur Capital said, "With a billion aspiring Indians seeking to up the protein in their diet, the $30bn+ domestic market for fresh fish and seafood presents a great growth story. We were impressed by Utham's vision of a tech-driven model to transform the unorganized and inefficient supply chain and unlock opportunities in India as well as overseas."
Fish and seafood is the toughest and largest unsolved problem in meat and thus Captain Fresh plans to expand into the remaining spectrum of meat products to add to the value proposition for its retail partners. “Processed and packaged fish today is a very small portion of our business and this is another key incremental demand opportunity we foresee as we get into deeper channels like hyperlocals and online marketplaces,” he said.
For the next 6-8 months, the meat company will be using the capital raised recently to establish itself in 20-plus cities across tiers in the three regions that it currently operates in. The next geographical expansion would be into Tamil Nadu, Kerala and West Bengal since these are the high consumption frequency states that account for 65 percent of fish consumed in the country. Considering its tech engine has global applications as well, it may also look at expanding into other key countries such as the US, Japan and southeast Asia by next year.