Entrepreneur Saurabh Bohra’s Twitter bio reads: “Building an X$B company for sure”.
The value of that ‘X’ can only be limited by his own imagination. Or perhaps, his company’s ability to “move fast”.
His journey with food and agri commodities, in fact, began on the third day of his first job at Godrej, when he “was picking up toor dal in Satara (in Maharashtra)”.
From there, he moved to agri services, rural retail, and finally, large format retail where he went on to handle “glamorised” items like liquor, tobacco, and processed foods, and learnt category management. A large part of his retail stints also involved interfacing with exporters.
Then in 2018, Saurabh had his first brush with ecommerce when he joined Grofers as the head of private label sourcing.
He tells YourStory,
“Grofers was moving from a hyperlocal to an inventory-based model at that time. I was managing private labels and leading new product development in food brands. It was the first startup I was a part of, and I owe a lot to Albinder [Dhindsa, founder of Grofers].”
But, how different was an online grocer from a traditional retailer?
Saurabh shares, “At Grofers, it was predominantly science. There was customer data ready to be assimilated, analysed, and implemented [into decisions]. But, offline retail is all about art. Understanding consumers without data is also art. Kishore Ji [Biyani, who pioneered modern retail in India] would stand on shop floors to see what customers were buying.”
Turning entrepreneur and why
After a two-year stint, Saurabh quit Grofers in mid-2020 to start his own venture – NovaSatum. “Dhandha karna ka jo keeda hota hai, woh hamesha se tha [The entrepreneurial bug was always there],” he says.
The other motivation to start up was more opportunity driven.
With India’s online food and grocery sector experiencing significant tailwinds during the pandemic, it was just the right time to get into it. Add to that, there were critical gaps to be filled in the agri commodity value chain.
Saurabh, who also holds a degree in agriculture, elaborates,
“Post-harvest agritech in India has the most fragmented supply chain. There are many startups today that are solving in the FnV segment, but not many are looking at dry commodities (rices to spices). It was a low-hanging fruit for us.”
NovaSatum looks at tech integration from the farm gate to the food plate. This includes everything from cleaning, grading, processing, and packaging to storage, warehousing, distribution, and retail, and even exports.
Essentially, Saurabh wants to build NovaSatum as the definitive full-stack post-harvest platform for essential commodities in India.
Not only that, the startup also wants full control over the “front end”, with its own food brand (NeuFarm), along with plans of becoming a D2C food commerce platform — the fastest-growing user acquisition channel in the country today.
Organising the backend processes
Thane-based NovaSatum was incorporated in August 2020, and started operations in October, after initial pilots with Farmer Producer Organisations (FPOs) in Rajasthan.
Founder-CEO Saurabh shares,
“We found that farmers were facing challenges in improving the trade quality of commodities like moong, chana, urad, paddy, and so on. The wastage was high, and the price was low. So, our first job was to source directly from these farmers, turn their harvest-grade commodities into trade-grade ones, and enhance their incomes.”
NovaSatum has two processing and repacking units in Ahmedabad and Kolkata
The next step of intervention happens when trade-level commodities are graded, packaged, and made retail-ready for exports or domestic sales.
NovaSatum set up its own state-of-the-art processing facilities in Sanand near Ahmedabad (Staples Repack Centre) and Dankuni near Kolkata (Commodity Repack Centre), with monthly capacities of 1,000 metric tonnes and 700 metric tonnes, respectively.
Both these units are situated close to the ports to cater to export markets like the UAE, Africa, Australia, and Canada.
Saurabh says, “We are adding value to dry commodities by cleaning, grading, and fumigating them. There’s a 20 percent wastage that usually happens from the trade level to the packaging stage. We’re solving that with tech-enabled infrastructure that can be scaled up across the length and breadth of the country.”
Front-end retail brand: NeuFarm
Solving just the backend isn’t enough anymore.
Sometimes too much focus on the supply-side can also mean failing at “demand retention” at the consumer end.
Hence, NovaSatum wants to own the entire supply and demand chain. It also wants to leverage the rising consumer acceptance and popularity of D2C food brands following the pandemic.
In December, it launched NeuFarm, a premium brand to sell a wide assortment of rices, flours, cereals, spices, herbs, pulses, legumes, beans, edible oils, sugar, jaggery, salt, dry fruits, nuts, and seeds. It has 270+ SKUs, with fruits and vegetables to be added shortly.
NovaSatum’s front-end retail brand NeuFarm sells rices to spices to dry fruits
NeuFarm-branded food products are presently available on Flipkart, Amazon, Snapdeal, and DealShare. The startup is also in talks with JioMart, DMart, Spencers, Aditya Birla Retail, and HoReCa clients to sell NeuFarm’s range of products.
Within 45 days of listing, NeuFarm averaged 500+ orders per day on Flipkart, and was among the top five percent sellers on the ecommerce platform. Now, it is close to 1,000 orders a day.
“On Flipkart, 98 percent of orders are coming from rural India. We’ve listed only three percent of our SKUs so far,” Saurabh says.
Interestingly, NeuFarm’s demographic reach mirrors a larger trend in India’s online grocery segment. With non-metro cities catching up, it is estimated to be worth $10.5 billion by 2023. That’s more than a 10X growth from $1 billion in 2019.
Growth plans and future roadmap
NovaSatum plans to work with 30+ FPOs and 20,000 commodity farmers (primarily in western and southern India) by January 2022.
It is also looking to add six processing units and onboard 6,000-odd small and big retailers and exporters by then.
The bootstrapped startup will be raising funds to scale and expand and has recently been approached “by a couple of good investors”. “We are looking to dilute about 10 percent equity at the time of fundraising,” says the founder.
It is poised to hit an ARR of $2.5 million in FY22, and aims to grow that to $50 million before launching its app and D2C platform.
We are positive at the operational level because we are into post-harvest services as well, and are generating funds from our own business,” Saurabh explains.
NovaSatum is certain that it doesn’t want to become a “Grofers or BigBasket” — or just another B2C online grocery business.
On the contrary, it envisions creating a large single-brand B2B platform for worldwide retailers and exporters, where they can source their essential commodities from.
On the B2C side, meanwhile, it will scale up NeuFarm, widen its assortment, and enter newer categories, including perishables. The possibilities are immense.
But, like Saurabh says, “the key is how fast you can move forward”.