Captain Fresh, a farm-to-retail animal protein platform, has more than doubled its valuation to $500 million in three months as the Indian startup deepens its footprints in the local market and begins expanding overseas.
Existing backers Prosus Ventures and Tiger Global have jointly led the startup’s $50 million Series C funding, founder and chief executive of Captain Fresh Utham Gowda told TechCrunch in an interview. Existing investors, including Accel, also took part in the new round.
The business-to-business seafood market, which has raised more than $100 million to date and was valued at about $200 million in the Series B round announced in December, is in talks to enter the new round. another $10 million to supplement, said a person familiar with the matter. Gowda declined to comment on a Series C round extension and the startup’s valuation.
Gowda, a former investment banker, has tracked the fishing industry for years. He was helping one of the industry’s largest exporters at a time when the research was about to go public. Although the plan changed, it helped Gowda learn the ins-and-outs of the market.
“It’s a very large industry, but also very messy,” he said, adding that it continues to drive consumption of billions of dollars a year. “I got a good sense of how both India and developed markets looked at this category and got the chance to spend a lot of time on the production floor handling purchases.”
Founded in 2019, Captain Fresh takes a different approach to serve farmers and customers. “Every other player in the industry has tried to solve this from a brand or end-customer perspective. We believe that the core problem is organizing the supply,” he said. “It is a commodity trade, but a sector with a shortage of supply.”
The bet seems to pay. Captain Fresh today helps farmers and fishermen sell nearly a hundred tons of fresh fish and more than three dozen other types of seafood, he said. The startup, which has set up more than 50 collection centers, helps farmers sell to more than 2,500 companies in almost all coastal states in India.
Captain Fresh is now also active in the US, Spain and the Middle East and the international business, which started less than three months ago, already makes up 20% of the total business. Most of the major brands – including some e-commerce services and offline retailers – in India have become customers of Captain Fresh.
The market for animal protein is highly fragmented. Historically, farmers buy the fish and other seafood through auction and take the produce to wet markets. But this approach is riddled with many inefficiencies. First, if the supply does not reach the wet markets in time, several players will not have the resources to secure the products.
“We bring reliability, which essentially means: [businesses] can place an order with us, we will confirm the order to them and deliver the product the next day at 06:00. So they can then spend all their bandwidth on marketing and selling the product instead of worrying about purchasing and other things,” he said.
“We also solve for quality. For example, in our supply chain, we measure quality by what we call the number of touches the fish has had. The more touches it has, the worse the quality will be. We managed to get the touch points down to under five or four from the time the fish was caught to the point of sale, compared to more than 25 to 30 touches in the traditional supply chain,” he said.
Captain Fresh’s approach has made it possible to extend the shelf life of fish and other seafood by one day to one and a half days. “In a category where the inventory has a shelf life of three days, a day and a half is a major bumper for anyone associated with us because of the window they have to grow sales by 40%,” he said.
The startup sees similar opportunities in international markets, where the supply chain faces the same challenges. “I can now argue that meat retailing in the US hasn’t evolved that much and we have a lot of things we can do to add value to even developed markets,” said Gowda, who joined the Zoom call from the US.
Captain Fresh plans to use the new funds to expand into a few additional regions, including some in Southeast Asia and Africa. It also sees some inorganic growth through acquisitions, he said.
The startup is also experimenting with a social commerce model to help farmers sell more. Today, Captain Fresh offers these farmers advice and content on his app. And, “If you’re a fisherman, you can load your inventory data on our platform and we’ll sell it in real time. Then our fulfillment takes over,” he said.
The idea of the social trade is to help fishermen and fisherwomen replicate the offline experience on the digital platform more efficiently, he said.
“On the supply side, Captain Fresh is now entering the larger animal protein industry from a seafood market,” Ashutosh Sharma, head of investment at Prosus Ventures in India, said in a statement.
“Also on the demand side, they have broadened their focus by adding new export markets. All of this is made possible by the same underlying technical infrastructure that highlights the platform potential. Captain Fresh continues to perform very well and at a fast pace. We are delighted to fulfill their mission and partner in their growth.”
This post India’s Captain Fresh more than doubles valuation to $500 million in three months TechCrunch was original published at “https://techcrunch.com/2022/03/06/captain-fresh-fish-seafood/”