Capital Float- A Digital Fund Lender

Working capital is a fund which is required by business organisations to run their day to day activi...

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Entrepreneurship - A blog  ››  Capital Float- A Digital Fund Lender


Mahesh Rathi
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  • 05 Jul 2017
    India is evolving into a hub of businesses and different business ideas.  Nowadays, many students are coming up with new and unique business ideas, many of which are converted into startups. Digitization of businesses also provides a platform for these startups to blossom. FreshToHome is one of the companies which came into picture with the new and innovative idea of online fish venture. Mathew Joseph, co-founder of FreshToHome had started his business with the name: SeaToHome Company in 2012. He exported fish from Cochin to Delhi and Bangalore. SeaToHome venture was probably one of India’s first ventures in the food space which provided fresh fish to the consumer at their very doorstep. However, not being a consumer player and other limitations made it very difficult for Mr. Mathew to scale and succeed in the market. Statistics of Indian Fisheries Ministry evaluated the fish industry in India to be worth $50 billion .This number further increases for the entire meat industry. Looking for an opportunity to enter the fresh meat market, Mr Shan, a former Zynga Country Manager and Founder and CEO of Dbaux, convinced Mr. Mathew to come aboard as co-founder. They expanded their line of business from just fish to meat and also changed the company’s name from SeaToHome into FreshToHome. They also put together a new team consisting of former Zynga employees, advisors and executives.- BM Tambakad, Suresh Parameshwaran, Jayesh Jose, Nikamal Malakar and Prashun Purkayastha. FreshToHome has implemented a very interesting idea in their website. They explain to us the entire process of the meat industry, with pictures. According to them, fisherman spend anywhere between three weeks to three months at sea. As you probably guessed already, the fish is stale by the time it reaches the shore. Fishermen either freeze the fish or use chemicals such as ammonia, chlorine or even formalin in order to preserve the fish they catch. These chemicals are harmful in the long run and can even cause food poisoning. This fish is then transported to cities such as Delhi, Bangalore etc where we consume them approximately 3 months after they are caught. All this might compel you to stop consuming meat entirely, but this is where FreshToHome steps in. They guarantee that the meat they provide will be chemical and antibiotic free. They deal with the fishermen and ranchers directly, maintaining a constant supply of meat. Hence they bridge the gap between the suppliers and consumers through their technology, inherently reducing the time taken for the meat to reach the consumer.   “In today’s fast-paced lifestyle, it is important for one to understand and consume fresh and chemical-free food. At Fresh to Home, we take great pride in enabling a first of its kind market place for fish & meat, which will ensure direct procurement from the fishermen or farmers without any middlemen in between. We are not Hyper Local but Hyper Fresh as we provide the freshest of fresh food to you straight from the source” said Shan Kadavil, CEO of FreshToHome.   Now FreshToHome is operating in Bangalore, Cochin, Trivandrum and Delhi. It was launched in Bangalore in March 2016 and is doubling sales every three months. Mr. Kadavil, is looking to expand his business to 20 cities in 2017. Currently, the company has more than 80,000 customers in Kochi, Thiruvanathapuran, Bangalore, Mysore and Delhi, with this number steadily on the rise. Two out of three are repeat customers of FreshToHome. The company, which clocks in 3 tons of produce per day has seen 65% month on month customer retentions. The company is working with 10000+ fishermen to supply the fresh fish to the customers. FreshToHome’s main competitor has been the other big player in the market, The Bigbasket, an online grocery store. There are other competing players like Easy-Meat, Zappfresh and Licious, as they also offer fresh meat. The company has angel investment from Mark Pincus, founder of gaming company Zynga, and Google Ventures CEO, David Krane. As per statistics, the company has achieved the fastest zero to $5 million revenue in the E-commerce sector in India in such short span of time. As per, the FreshToHome website is currently valued at USD $5,811 and reaches roughly 1,773 unique users each day. These users generate 7,960 daily views, with a revenue (from advertisements) of approximately USD $8 per day.
    630 Posted by Mahesh Rathi
  • 06 Jul 2017
    India is famous for its diversity in culture, customs, language and food. In India most people prefer to eat homemade food. With more and more women working full-time jobs, Indian households are struggling to eat fresh and healthy food on a regular basis. You have to compromise either on the food or one of the adults has to push themselves to cook. Here, Mr Mustafa has come up with a business idea to complement the efforts of the Indian households to cook food, with ready to cook batter of Idli /Dosa. With this iD food company, it is possible to get fresh and best quality ready to cook batter at your convenience. In 2006, Mr. P.C Musthafa, an IIM-B student, started this business with his four brothers in Bangalore. He saw opportunity in Bangalore as in Bangalore, people consumes more than 10 million idlis every day in households and hotels. To serve them with ready to cook and best quality batter, Mr Musthafa came up with a system to manufacture batter and also for the packaging. The motto of the company has been very clear; to provide hygienic and convenient batter to Indian households. iD fresh opened up a larger factory, with a vision of building a food company that made preservative-free food that can be cooked at home. Now, there are more than 65,000 retail stores across the 14 cities of which about 12,000 have refrigeration. This is where iD fresh distribute the batter on a daily basis to its customers. To expand business in India, the company raised funds of INR 35 crores from venture partners in 2014. With this capital it opened up seven factories and eight offices. Now the company is manufacturing more than 50,000 kgs of idlis/dosas batter per day which is equivalent to millions of idlis. The company is also expanding the business by introducing Malabar Parontha and Chutney which is get very popular in Bangalore. Looking to expand its business, the company has now started produing batter for other food items such as, Vadas. They also include a spout in order to prevent the shape of the Vada from getting messed up and to obtain its perfect round shape. They are also planning to launch ragi dosa batter and it is projected that company will successfully cross its turnover by 200 crores in this year.
    460 Posted by Mahesh Rathi
  • 06 Jul 2017
    Are you hungry and want to order tasty homemade food? Will you like to have a fresh and hot meal for today’s lunch?  FreshMenu is an online food delivery venture that provides a solution for all the questions above. Many new players are entering into the food delivery market to serve people as the online food delivery industry has grown drastically over the last few years. Some notable members of this industry are Foodpanda, Swiggy, Zomato, etc. Freshmenu is a start-up founded by Rashmi Daga, an alumna of IIM-A in 2014. FreshMenu prepares meals and delivers from its own kitchen facilities. Freshmenu is a start-up in the online food delivery sector, which falls under the full stack food business model. This means that FreshMenu prepares food in house and have their own delivery fleet. In this model, a company can ensure the quality of food which they are delivering to the customers. FreshMenu function on a cloud kitchen model which is broadly identified as a mini-kitchen that caters only to online food delivery and does not offer dine in or take out. FreshMenu has 17 operating kitchens in Bangalore - Sarjapur, Whitefield, Marathahalli, Koramangala, Bellandur, Richmond Town, Indiranagar, JP Nagar, Hennur, BTM layout. According to concept of cloud kitchen, customer will be served by the nearest kitchen which in turn ensures the quality and freshness of the meal. FreshMenu is the fourth largest company in this sector with total revenues of INR 31.7 crores in the year 2016-17, up from INR 84 lakhs in the previous financial year. However, the losses too increased from INR 2.31 crore in financial year 2015-16 to INR 33.8 crores in financial year 2016-17. FreshMenu is owned and operated by Food Vista India Pvt. Ltd. FreshMenu started in Bangalore and now the company has expanded business and its services to Mumbai and Delhi-NCR. Company has raised almost $ 22 million from investors including Zodius Technology Fund, Lightspeed Ventures Partners and Growth story. As per latest interview of Rashmi, FreshMenu will be net profitable within the next 12 months, as they are opening up even more kitchens and plan to expand services. Rashmi is planning to open almost 80 more kitchens by the end of next 2 years. Now, Fresh menu has almost 26 kitchens in three cities i.e, Delhi, Mumbai and Bangalore.  
    424 Posted by Mahesh Rathi
Capital Float- A Digital Fund Lender

Working capital is a fund which is required by business organisations to run their day to day activities. Banks and financial institutions provide loans to businesses to fulfil their requirement of working capital. This is done on the basis of their performance, credit rating and overall predictability of the business organisation.

Given the situation of the current Indian market, a well thought and intelligent idea can turn into a great business model. Hence, to promote SMEs to start implementing new business ideas in India, the government has initiated different incentives. Over 30 million SMEs have been started in India over the last decade. However, some of these businesses are slowing down due to shortage of working capital fund. This is because of the lack of trust that the banks or financial institutions place in the companies, along with a complicated and long process of fund approval system in financial institutions.

In order to make lending of funds to SMEs more convenient, Gaurav Hinduja and Shashank Rishyasringa have come up with the Capital Float company. They started in 2013 in Bangalore and are working in the digital finance sector. “We felt that it was the right time to get in, because India is going to look a lot like the US in five years. In the US, you see a lot of businesses doing digital lending because the infrastructure is present,” says Sashank, co-founder of Capital Float.

The founder of Capital Float Gaurav Hinduja and Sashank Rishyasringaadd are of the opinion that smartphones have made it easy for people to apply for loans. This is because they can have their creditworthiness analysed within minutes and so a loan can now be approved and disbursed within the hour.

Capital Float is an online platform that provides working capital finance to SMEs and start-ups in India and offer flexible, short term loans that can be used to purchase inventory, service new orders or optimize cash cycles. With the help of this company, borrowers can apply online in minutes, select desired payment terms and receive funds in their bank account in 3 days with minimal hassle. Capital Float is the trade name of ZEN LEFIN PVT LTd, a non banking finance company (NBFC) registered with the RBI.

Capital Float is backed by George Soros’s Aspada Investment company, SAIF partners and Sequoia Capital. It has raised more than $80 million in debt and equity. The company has raised USD $ 13 Million in Series A- funding, USD $ 25 Million in series-B funding, led by creation investment Capital management LLC. The Capital Float venture, since inception, has partnered with companies across verticals, having forged partnerships with E-commerce websites, payment gateways, cab service such as Snapdeal, PayTM, Shopclues, eBay, Alibaba, Amazon, VIA, Yatra, Mswipe, Pine Labs, Bijlipay, ICICI Merchant Services, and UBER.

The company is engaged with small business, E-commerce merchants, manufacturers and early stage business to business service providers across India. Capital Float Company has two types of products that can be used to purchase inventory and service new orders. For inventory based players like Myntra and Zovi, they underwrite receivables and for inventory purchase, they provide 60, 90 or 120 days of working capital loans. As additional working capital loan helps vendors to expand horizontally and give equal weightage to all E-commerce sites.

Capital Float has come with innovative products such as ‘Pay Later’, which gives loans to retailers against data on PoS machines. Capital Float, which primarily handles E-commerce finance, has seen 8x times growth in 2016. So far, Company has disbursed almost INR 150 crores in 2015. It disbursed almost INR 1000 crores to over 1,000 customers in 40 cities across the country within 10 months from April 2016 to January 2017. For the current year, the company has disbursed around INR 1500 crores with an interest rate between 16-20 percent. This depends on the risk assessment of the individual. The team also takes on a fee income, which is one to two percent on processing a loan.

Capital Float Venture is offering short term loans in the range of INR 25,000 and INR 30 millions. The company is offering time duration for disbursing large ticket size loan is three days whereas for small ticket loans a little as 90 seconds.

As per Gaurav Hinduja, he is expecting 500% rise in disbursals of all his products by increasing the customer base by 600%. Total loan disbursals of the company’s products in the market rose steeply with Pay Later and unsecured business loan being the top performing products with 140% and 300% growth respectively over 2015. Company having lent to 7000 borrowers in 2016-17, Capital Float is aiming to finance 20,000 of them in the next one year, including 10,000 kirana stores, with about 60% of its total borrowers coming from outside metro cities.