Researching for an interview with Shahnawaz Kadavil is a bit like preparing for a story on actor Shah Rukh Khan. What does one ask someone when nearly every aspect of their professional success has been covered by the media? So, we talked about fishing, a childhood interest.
Kadavil, the 45-year-old chief operating officer and co-founder of the Bengaluru-based omnichannel grocery platform FreshToHome, frequently goes line fishing for tuna: “The bigger, the tastier.” Fat content, he says, determines the flavour. He takes off on a boat with fishermen, about 13 nautical miles into the Arabian Sea. To understand the waters, his companions study the stars.
FreshToHome sources catch from about 3,000 fishermen across 300 harbours in coastal Karnataka, Kerala, Tamil Nadu and other states. While fish is central to their business, poultry, mutton play a significant role too.
Kadavil, a software engineer, was drawn to this field when his personal supply of fresh fish was threatened by the closure of the Kerala-based Sea To Home, the e-commerce platform he would source from. He convinced Sea To Home’s founder Mathew Joseph to let him act as their angel investor.
In 2014, Kadavil, Joseph and six others started Fresh To Home with an initial capital of ₹8-10 crore, pooling in their money. While Kadavil is the CEO, Joseph is the chief operating officer. B.M. Tambakad is the chief financial officer, Jayesh Jose is the chief technical officer, Nilkamal Malakar, the chief data officer and Jaleel P.A., the chief revenue officer. Suresh Parameshwaran and Firoz Vellekat are part of the senior leadership team.
“All of us have worked with each other for over 20 years and are known devils to each other,” says Kadavil.
FreshToHome started with eight employees in 2015; that number has grown to 5,000 today. From servicing Kochi and Bengaluru in 2015, they are now in 160 cities. In 2017, the company added poultry and mutton to its product offering. In 2019, the product basket got bigger with the inclusion of vegetables and dairy, and they launched a separate app called FTHDaily. In the same year, FreshToHome expanded overseas to the United Arab Emirates (UAE). And in 2021, they ventured into omnichannel by opening five stores in Bengaluru, which has now grown to 30; they have 45 stores across the country.
FreshToHome now clocks two million orders a month across all categories. Fish and seafood hold the highest share (42%), followed by poultry (38%) and meat. For FTHDaily, the product basket is led by dairy (55%), trailing behind at 25% is groceries and personal healthcare, followed by vegetables at 20%. Its annual revenue stands at $130 million (around ₹1,066 crore); 10-15% of this comes from FTHDaily. Kadavil points out, “We are now operationally profitable.”
In December 2022, the company made headlines when it raised $104 million in Series D funding led by Amazon Smbhav Venture Fund. In an interview with Mint in February, Kadavil said, “The capital would be used to deepen FreshToHome’s presence in the 160 cities it currently operates in.”
In seven years, in fact, they have raised $250 million. They are now planning to further their omnichannel and overseas ambitions.
But when Kadavil rescued Sea To Home seven years ago, his career path was very different: Since 2011, he had been India manager of the San Francisco, US-based social gaming giant Zynga. FarmVille and Mafia Wars were created by Kadavil’s team in the late aughts, when he was in the Silicon Valley as the chief experience officer of the company.
Kadavil spent nearly a decade, from 1999-2010, in Silicon Valley in the US, working with “some of the most brilliant minds in the world”, building lifelong mentors and enduring friendships during stints with SupportSoft and Zynga. “It was a high point for startups at the Valley then, similar to what is happening in Bengaluru now,” he says.
THE EARLY DAYS
Kadavil was born in Edappal, in Kerala’s Malappuram district. His paediatrician father, Mohamed Kutty, moved to Dubai when Kadavil was in class IV and Kadavil completed his schooling at Sharjah’s Indian High School. The young Kadavil “was always tinkering with things”, an early sign of what was to follow: engineering college. He graduated from Modern Engineering College in Kochi, Kerala. In early 1999, he bagged a job in Dubai as a senior software engineer for MAPS Geosystems, which worked on a pattern similar to Google Maps.
At the same time, he was building his own business, Zircon Automation, which offered software solutions to organisations in Dubai. It was a “side gig”, started with a few classmates in engineering college in 1998. Within a year, the “side gig” was making revenue of $100,000 annually.
From a financial standpoint, he had no desire to leave Dubai but his father wanted him “to be a small fish in a big pond, rather than a big fish in a small pond”. Without telling Kadavil, he posted his resume on the job site Dice.com, popular among techies.
In 2001, he joined the software company SupportSoft in California as a software architect. It was here that he met Mark Pincus, co-founder of SupportSoft. In 2007, Pincus launched Zynga; two years later, Kadavil joined as the chief experience officer. By then, the 2008 recession had hit. “The good part is, I witnessed the cycle of boom-and-bust in that decade; and understanding that both bearish and bullish periods are part of an entrepreneur’s life is something I learnt at the Valley,” says Kadavil.
In 2011, he was back in India. “I wanted to get back to my roots. At some point, you need your fish curry and rice.... I am a great sardine fan. I like my kingfish, my pomfrets, my prawns. I do a fair amount of cooking at home and make a nasty prawn biryani.”
Back on home turf, the hunt for the freshest fish began. That’s when he discovered Sea To Home. “I loved the fish, it tasted exactly like the ones I grew up eating in Kerala. It was free of any chemicals or antibiotics because it was caught the same day, transported by train and would reach my home the next day—fresh.” When he realised the company might discontinue services, he used his techie network to get the number of its founder, Joseph.
The Kerala-based fish exporter who started Sea To Home in 2011 was ahead of his time, says Kadavil. While he could supply the best-quality fish, technology was not his forte. “The business of e-commerce is quite challenging. It has a fair amount of tech, unit economics are difficult and you need to raise capital. These are not things a traditional fish exporter will do. As a result, he had to shut down Sea To Home in 2014 and I couldn’t get good fish.”
Kadavil came to the rescue and began to study the fish market in India and learnt how big it was. “The market size is $50 billion across fish and meat, of which 70% is fish, 20% poultry and rest is mutton,” he says.
Although the size of the wet market in India, Kadavil points out, is massive, online platforms and organised supermarkets account for only $750 million of this, with players like Licious, Meatigo and Godrej’s Nature’s Basket. These numbers indicate that less that one percent belongs to e-commerce companies. It presents a huge opportunity, but there are hurdles to overcome. The biggest challenge for FreshToHome is to get more people to shop for fish and meat online. Buyers need to see, touch and feel to determine freshness and quality.
Kadavil’s former boss Pincus is now an investor. The company, in fact, has an impressive list of investors: Peter Thiel, co-founder of the digital wallet PayPal, and David Krane, former director of Google.
FreshToHome has had four rounds of fund-raising so far. In 2019, for Series A they raised $11 million led by CE Ventures; and later that year they raised $20 million in Series B led by Iron Pillar. In 2020, they raised $121 million in a Series C round led by Investment Corporation of Dubai.
After its Series D funding round last year, the company is focusing on three core areas. The first is expanding their omnichannel presence. There is a reason for it: Their research indicates fish or meat is considered to be more fresh when buyers see them being cut in front of them: “It’s very difficult to do this online, because the meat is pre-packed. That’s the primary barrier in terms of converting, especially the more mainstream and older buyers, from making in-person purchases to online shopping.” The solution lies in building trust, and they did it to some extent through celebrity campaigns—they roped in actor Ranveer Singh too —but in the real world even superstars can’t do as much as a sharp omnichannel strategy.
“Post-covid, people’s buying habits changed. They have started contacting their trusted butcher on WhatsApp. In some sense, this is glorified e-commerce. India is essentially an offline market, which is now beginning to go online,” he explains. Taking note of this, they built stores, where buyers could test the freshness of the products. Kadavil believes that after in-person experiences over a period of time, these customers will switch to online. Now, they have 30 stores in Bengaluru which contribute to 60% of their revenue in this city.
The second area of focus is increasing their presence in the GCC (Gulf Cooperation Council); they hope to launch in Saudi Arabia. And, the third is entering the business-to-business export space, starting with the US in the future.
Kadavil continues to follow in the footsteps of his mentor, Pincus, and plans to release an IPO (initial public offering) one day. Pincus took both his companies, SoftSupport Inc and Zynga, public. It’s all about casting a wide net. Kadavil says, “From childhood, I was very interested in fishing. I know how to throw a perfect net.”