The Season 2 of Shark Tank India has started airing online and it’s already a hit among viewers. While there were many impressive pitches all along the show, the pitch by Hoovu Fresh really baffled everyone. This article aims to understand the business model behind Hoovu Fresh, how much money are they making, their current valuations, and previous funding rounds raised.
What is Hoovu? Who are the founders?
Hoovu is a start-up operating in the floral industry. It was started by two sisters Yeshoda Karuturi and Rhea Karuturi. The startup incorporated in Bangalore aims to bridge the gaps in the floral business. The overall model of the business is spun around a simple idea but it has been scaled up to a full fledged startup.
Rhea has a Bachelor’s degree in Science and Technology from Stanford University while Yeshoda has a B.S degree in Business Administration and an M.S. in accounting. Both of the sisters started running the business after completing their education.
Hoovu Fresh in Short
- Bangalore based
- Operates in 8 cities.
- Served more than a million orders.
- Partnered with more than 500 farmers and 300 temples.
- Had raised around Rs.6.45 Crore in pre Series A prior coming to Shark Tank
How did Hoovu Fresh Start?
The sisters drew inspiration from their father Ramakrishna Karuturi who used to own a rose farm in Ethiopia. Growing up with their father the sisters understood the intricacies of the business by observing the daily happenings around their father’s business. Their father expanded the business from a 3-acre farm into the single most largest rose farm in the world. All this expansion was conducted in a matter of a decade and this served as the basis for core learning for the sisters.
After completing their studies, the sisters started looking after their father’s business. While managing the affairs they noticed the fact that the Indian markets didn’t have any reception towards pooja flowers.
While pooja flowers were a primary part of an Indian household the markets seemed to ignore that market. The sisters noticed this market gap and that served as their idea behind their startup.
They launched their start-up in the year 2019 and named it as Rose but subsequently they changed their name to Hoovu in the middle of 2020’s.
What is the Business model of Hoovu Fresh
If we look at Hoovu Fresh, we can clearly witness that while the overall Venture Capital scene is moving towards the grocery market segment this start-up is focused on the most ignored last mile of India.
Although the average wallet spend associated with this market is comparatively low the customer can easily turn recurring in nature. The overall emotions associated with pooja flowers is very high and that’s the reason why it’s easier to gain recurring customers in this market segment.
A major issue associated with the floral industry is pertaining to the perishable nature of flowers. Flowers are a perishable commodity and therefore they have to be transported with utmost swiftness the moment they are plucked from the field. However Hoovu has bought in innovation by expanding the shelf life of flowers from two to three days to fifteen days.
Currently the inventory of Hoovu Fresh operates with around 50 SKUs. The inventory ranges from loose flowers to garlands and niche products such as Durva grass. The price of products on the platform ranges between ₹25 to ₹1000. The startup has prioritised supply chain strengthening from day one. It has partnered with various farmers in order to ensure superior quality of products. Also the startup has focused on incorporating more women into their startup.
Market monopoly
If we look at the flower industry we can see that while the bouquet industry has grown by leaps and bounds the pooja flower industry was always left unattended and carried on the shoulders of roadside vendors. The entire segment has been left unattended since the last three decades.
In a detailed research the flower industry seems to occupy a dominant position in the market because the market size for pooja flowers is four times the market size of bouquets. The entire start-up’s USP is that it is focused on digitising a traditional industry.
What is the status of the business operation of Hoovu Fresh?
While talking about its e-commerce expansion, Hoovu Fresh operates across various marketplaces such as Blinkit, Zepto, Dunzo etc. The startup enjoys complete monopoly over the entire market and therefore earns a substantial revenue with literally zero competition.
Covid turned out to be a roadblock for the startup but they quickly utilised it as an opportunity to educate individuals regarding shifting to online models for buying Pooja flowers. Also the startup introduced an innovative method for packing the flowers known as zero touch packaging wherein the flower’s are packaged using automated flower packing machines.
Even in such an unstable market the startup has witnessed a 10x growth in the last two years. On an average they process around 1,50,000+ orders in a month. Their services operate in several tier-1 and tier-2 cities. Currently they are operating in Bengaluru, Hyderabad, Gurgaon, Noida, Chennai, Mysore, Pune and Mumbai. Apart from this their range of Agarbattis are available all around in India. However during festivals they operate all around the country.
How much Money Did Hoovu Fresh Raise from Shark Tank?
The Karuturi sisters, Yeshoda and Rhea of Hoovu Fresh, caught the attention of all the Sharks and ended up receiving an investment of ₹1 crore from Peyush Bansal (co–founder of Lenskart) and Aman Gupta (co–founder of boAt).
What did we learn?
