As busy as it can get, health, in these times, has taken a back seat. We often fail to consume a proper diet which leads to numerous deficiencies.

Founder Thesis brings you the journey of one such founder who has made it his mission to make Ayurveda an integral part of the day-to-day life of the modern consumer.

In a candid conversation with Akshay Datt, Ameve Sharma, Co-founder, Kapiva, has taken us through his journey. Ameve has previously worked with McKinsey across various projects before setting off his entrepreneurial journey.

A third-generation entrepreneur of the 104-year-old Baidyanath, Ameve started Kapiva in 2016 with Shrey Badhani, intending to bring the wisdom of India’s ancient food traditions to its modern-day consumers. And today, Kapiva has scaled into a 100cr brand in the D2C segment.

Tune in to this episode to hear Ameve speak about how Kapiva is disrupting the health and wellness industry by presenting the benefits of Ayurveda in contemporary and convenient formats.

What you must not miss!

  • The learnings from consulting and how can they be applied in a start-up.
  • Why is it important to understand the consumers?
  • Why must founders create a data infrastructure? How can this help in taking decisions?
  • Why is it paramount to build a fantastic customer service team?

EPISODE TRANSCRIPT

Akshay Datt 00:29  

The first story that I want to hear from you is about the legacy family business, you come from a well-established business family. Tell me about that story. Who was the person in your family? Who started it? How did it start? What kind of environment did you grow up in?

Ameve Sharma 01:47  

Sure, so the business is Baidyanath, typically famous for chyawanprash, isabgol and your traditional kind of Ayurvedic products started back in 1917 by my grandfather and his brother. So basically, he was very much involved in the freedom movement, my grandfather, and one of the reasons why he got into Ayurveda was that he wanted to get back to the legacy of India and the sort of knowledge that we had. So, I think he was a really different kind of person, you know, like an inspirational figure. There was a very rudimentary kind of packing materials, very labour-intensive, for sure. But also, at that time scale, in general, was much smaller, right. So, there weren’t that many consumers in India anyway.

Akshay 02:42  

Okay. So, like, when you were growing up, it was understood that you would join the family business? 

Ameve 02:47  

Yeah. You know, at that time, the structure you’re working on was still a very acceptable structure, right. You know, things got more professional, but yeah, the expectation was that I would join the family business, right. I grew up very involved in business, right. So okay, I started visiting factories and offices at a very young age, okay. Went for market visits and stuff at a very young age.

Akshay 03:13

Okay, okay.

Ameve 03:15  

So it wasn’t explicit, but there was understanding. But, you know, basically what happened actually was that at one point, I felt that there was more I wanted to do, right. You know, I felt that in the family business there was a way to kind of professionalize it. And with the family setup, it’s better to go down the professional route than me being involved. 

Akshay 03:42  

So before you actually joined full time, what did you do in terms of education? 

Ameve 03:47  

I did my double major in international politics and economics at NYU. Okay, post that actually, I was supposed to actually get a job in LA, when I graduated a semester early, which was a bad idea. 2008 December, which was the middle of the financial crisis. So I didn’t get the exact job that I wanted to, honestly, right out of college and had a job, but I thought working in the business would be a better experience.

Akshay 04:13  

What was the McKinsey stint like? What did you learn?

Ameve 04:18  

Sure. So I would say the biggest learning honestly was how to take a larger problem, break it into smaller pieces and make it very solvable. Right. And also discipline and structure. Right. I think I didn’t know what it meant to work hard until I was at McKinsey. I thought 9 hours was more than enough. But then you know, when you see people slogging, like 13-14 hours you realize there’s a different class. Really taught me a lot of discipline, really taught me hard work to a different level, right. And at the end of the day, what I realized is that if you enjoy your work, it’s not working anymore. You need to work hard to be successful. That was obvious, right? But you can only really work hard if you enjoy what you do. I don’t think you can otherwise. 

Akshay 05:06

Yeah, absolutely. 

Ameve 05:09

So funnily enough, after McKinsey, I started kind of thinking about what to do next. Right.

Akshay 05:14  

But if you were enjoying McKinsey, why did you want to do something next?

Ameve 05:18  

My co-founder actually went to Xavier’s Bombay, with one of my really close friends in Calcutta, right. So I knew him through him. When I came to Bombay at McKinsey, I didn’t really know anyone. So he ended up being one of the first people I met, right. So he got friendly. And then he wanted to start something as well. Right. So you know, we actually spent a lot of time trying to figure out what to do, right. And we talked about everything from tech to fund to food to the restaurant, right? Funnily enough, we ended up in Ayurveda. But honestly, we felt that was the largest opportunity at the time, right? We saw it exploding. And so yeah, we spent a lot of time discussing what we wanted to do. I was quite clear that I wanted to leave because I was there for the experience. I was there to learn. I was not there for the long term. I knew that from day one. And I wanted to start so I started after a year or so, I started figuring out what I wanted to do. Okay. So that’s when I and Shrey kind of started talking. And that’s how Kapiva was born.

Akshay 06:20  

What was the thesis? Initial thesis? What did you want to do?

Ameve 06:26  

So a couple of things, right? There were a lot of things that I wanted to do in the original business in Baidyanath which I was not able to do because of whatever reasons like you know, bureaucracy, process, whatever, right? And a big part of it was actually breaking Ayurveda out of the mould it was stuck in. Now, I told you my grandfather wanted to create this Indian Ayurveda business, right? But the fact of the matter is that all traditional Ayurveda businesses today are very much westernized, right. It is not about problem-solution. Right? It is about staying healthy, being healthy, is about balance, right? The name Kapiva comes from the tri-doshas – Kapha, Pitta, Vata. And the whole idea about Ayurveda is to have a balanced lifestyle and a balanced body so you don’t get sick. Right. And a small part of it is that you know, symptomatic relief if you get sick. Today, 99% of Ayurveda has become that small problem-solution bit. And the 99% of real Ayurveda, which is actually staying healthy, is kind of lost. So it is about, A, to get good Ayurveda treatment, right? For a complicated treatment, you need a doctor, right? Yeah. Very difficult to kind of just go pick stuff off the shelf for something serious, right? If you have constipation or something like that, it is fine. But for something more serious, you need to be a doctor. And there are very few really good quality doctors, right? Also because the number of them graduating is very low. The government has been doing some good work in trying to increase it in the last couple of years. But it takes a long gestation period. 

Akshay 08:11  

Okay. And I think around 2017 is when you started?

Ameve 08:18  

Late 2016, roughly. Yeah. So we started the clinics, late 2016,

Akshay 08:21  

How did you fund this, like, you know, setting up a clinic and all that?

Ameve 08:25  

So we started with the initial funding round, maybe about $4,000, right? I put in some money and Shrey put in some money, and we also got some family and friends to kind of invest, right. So we started with 100 grand, and that got us five stores.

Akshay 08:41

And this was like a service business at that time, not a product.

Ameve 08:45 

Basically, we had a product line as well. So we created in-house products, right? And then you walked into the store, half the store would be Kapiva products, half the store would be third-party products, and then you had an Ayurvedic doctor and sometimes nutritionist, etc. in the store. So you can come to get customized advice for what products to take.

Akshay 09:01  

How much were the stores making?

Ameve 09:06  

So we recuperated our cost within about seven-eight months. Okay. The cost started being profitable, in like 9-10 months. It is actually very good for retail. We created a very efficient box. Right. So it was like a 300 square foot store. Okay, very cheap to set up. And, you know, we spent a lot of time building that model, we thought we’ll build 100 of them, 200 of them. But we built what we very quickly realized that this was going to be impossible to scale. For two reasons, the first was that because it was a very small box, right? The breakeven for a store will have four-five lakhs. And good stores were doing like six-seven lakhs, right. And the maximum you would do is like eight lakhs, which is a good outcome per month, right. So to create, and you say before this work that I put in private equity, right? The ambition was large, the ambition was not to create something small. We wanted to do something big and impact a lot of people. The first thing we said I remember and we still talk about today is that we want to make 5 million Indians live a healthier life. That was the first level goal, right? How do we make 5 million households rather, you know, be healthier, live healthier, have better sort of health outcomes? And at the end of the day, we found that this would not be that business, right? Because opening a store was becoming very time-consuming. Right?

Akshay 10:31  

Yeah, you need to finalise the place, negotiate a lease, do the interiors. 

Ameve 10:37  

And also what we found was the doctors very quickly would move on. Right? So we would spend a lot of time hiring a doctor, training them and then they would look for other opportunities. Because high-quality doctors don’t actually want to sit in a store. That’s the fact right. So they want to do R&D, they want to manufacture. Very few of them want to treat, and if they want to treat and you are an MD, then eventually your dream is to have your own clinic, which is fair, right? So we found that a lot of young doctors would come. We would train them after doing the MD, and then they would move on very quickly. Right. So we were really struggling to scale. Right?

Akshay 11:16  

These Kapiva branded products that you had in the store, how did you get those ready so fast?

Ameve 11:23  

Sure. So we of course leveraged a lot of the backend from the family business, right? There was also a lot of contract manufacturing we got done from my business as well. Honestly, even till today, I would say the family business was a huge help, right, like having that background and being able to pick up the phone and call someone for advice. Even you know, something as simple as sourcing raw materials. Right? It’s not easy to get the right quality at the right time at the right price. So all of the supply chains for even contract manufacturers we’ve built out, right? We’ve told them when to buy what raw material from where because that really makes a big difference. So at that time also, we got a lot of support from the business and still today, from a knowledge point of view, we get a lot of support. So yeah, once we started the store, we found scalability was a problem. And at the same time, it was kind of the best place in the world to do market research. Shrey and I spent a lot of time in the physical outlet, right, talking to customers. So we must have like, spoken to, I don’t know, maybe 1000 Ayurvedic customers by the end of the year, right? Maybe more, right? And, in a way, if you think about it, it’s a store where you have a brand new unknown brand called Kapiva. And then you have five very well known brand networks, right. So it very clearly showed us where the gaps in the market were, you know, what consumers were moving toward what they wanted, right? And taking the same vision we had initially, we realized that there’s another big part of Ayurveda that we could potentially provide at scale which is actually something that exists to some extent, but not really, which is Ayurvedic foods or nutrition, right.

Akshay 13:15  

Then chyawanprash is part of this?

Ameve 13:19  

Yes, kind of. Chyawanprash is borderline, right? So I would say on one hand you have medicinal Ayurveda, right, which is capsules, cough syrups, tablets etc. On the other hand, like what we have, for example, is Ayurvedic breakfast, right? So Ayurveda has a very clear point of view on what grains are good, right? You know, for example, we have, I think, breakfast with barley, amaranth, oats, five grade grains with amla, turmeric and tulsi, everything with high fibre, high protein, very low calorie, and no preservatives, no additives, right? We are basically incorporating the principles of Ayurveda in health, in food, right, and creating nutrition. 

Akshay 14:14  

And so when did you realize that this is the way to go? Like, initially you had those stores…

Ameve 14:20  

We figured out two-three things. So what we figured out is that you know, if I’ll give you an example in my house, right, I’ve been having a shot of amla juice every morning since I was like eight years old, right? Okay, we have this very funny thing like after lunch. We take dahi, put ashwagandha powder and honey, and that’s like a dessert. Right? So we incorporate Ayurveda into our daily lives, right? You know, so I take Ayurveda herbs as part of my daily supplement. And we found that to be really something very different, right? And you know, I think I keep telling my father to at least take about five minutes and be my spokesman, right? He is the epitome of health and I don’t want to jinx it by saying your age, but yeah, at this age, right, like, people can’t believe it, when I tell him what his age is, right. So, see how it can really in the long term benefit you and keep you healthy, right? And see, Ayurveda is very simple. It is actually just good food. It’s like, you know, Amla is the richest source of vitamin C in the world. And at the end of the day, a lot of Ayurveda you can actually measure in nutrition, right? So the same way you eat a lot of spinach, you get a lot of fibre. Right? So a lot of Ayurveda is actually very simple, right? And there’s also now a lot of data on Ayurveda especially. So the number one, let’s say digestion product in Europe is Ayurvedic. The only FDA approved product globally for the liver is Ayurvedic. So there’s a bunch of research happening now in the US, in Canada, you know, on things like ashwagandha, turmeric, and a lot of it has been very positive. Most large pharmaceutical companies now right from your Pfizer’s have a herbs division, where what they do is like, they look at herbs that have been used across the world, try to isolate active ingredients and synthesize them. Ayurveda is a very simple kind of thing to understand, but that’s why, you know, it’s about good nutrition, eating well, every day. Right. So we wanted to bring that daily health angle. There’s a saying in Ayurveda – in English roughly, “health is not the absence of illness, but it’s the presence of vitality.” That, you know, when you wake up in the morning, and you’re like, ready to go, fresh, right? And you’re energetic throughout the day, right? And those things are key indicators of good health, right? And what we found is the second reason why we realized that nutrition-based products are very key for lifestyle problems, right? So when I say problem, what do I mean? And these have become very prevalent today. Digestion is a big one, right? Everything starts from your stomach. Skin, hair, hair fall, having blood sugar, rise in blood sugar at a young age, right? Diabetes is something that we don’t, but nutrition becomes very difficult and right, then you need a lot of different things. But when you have, let’s say, high blood sugar, then even a doctor will tell you nutrition is the key thing to solve. Right? Like say if you have hair fall, you go to a doctor, the first thing they tell you is that hair is the part of the body that is deprioritized the most. So more than applying something on the head, more important is good nutrition. So there’s a lot of these problems which are followed by good nutrition, right? So what we did as step one in the new business was that we wanted to solve the food part of it. So the idea was that how do we kind of create this category of Ayurvedic food? How do we incorporate Ayurvedic wisdom and kind of give people better quality nutrition, right? We were at the same time very aware of numbers two and three. All right, numbers two, and three, also very important, right? One is still incomplete. So we already are today doing that. And working a lot about creating an entire ecosystem. So we, as a company, don’t see ourselves as a product company, right? We see ourselves as an ecosystem where we get knowledge. Till today, we offer free consultation on our website with Ayurvedic MDs, right. So you can go on our website, any problem, talk to them, they’ll give you an entire detailed nutrition plan, 70% of the stuff that they suggest is not from Kapiva. So we said to give the best possible thing, right. So if we have it, if we don’t give whatever’s best, right, you know, we have a lot of content and we now created a huge team. We’ve actually tried to get a lot of people from Curejoy, which I believe is one of the best content creators for Ayurveda. And we are now creating a bunch of content around lifestyle, what not to eat is as important as what you eat right? So definitely, we sell products. But then the ambition is not just that.

Akshay 19:16  

Tell me about the pivot phase like from running stores to becoming a food product.

Ameve 19:23

As I said, the ambition was always to bring a genuine form of Ayurveda. As I said, there were two ways to do that. Right? One was the doctor-led sort of better quality medicine. The second was more sort of nutrition, food, lifestyle-based, right? They both require doctors to be honest, and they both require it, it’s all very connected, but depends on which route you go. Right. So we decided that the physical route wasn’t the way to solve this problem. The digital route was a way to solve this problem, right? How do we scale up? You know, advise, how do we create our content? How do we create products? How do we increase the availability, right, and the way to actually do what our initial goal was, which is 5 million Indians live better with Ayurveda. This was going to be much more difficult store by store and probably we’ll be 80 by the time we reach that goal. So online had started to take off a little bit and we had done a few experiments with both online and offline distribution. And we found that there was a lot of scope for growing the business. That’s when the pivot started happening.

Akshay 20:32

Did you shut down the stores or?

Ameve 20:34

That’s where I am coming to. The stores had invested money into them. We had reached breakeven and profitability. Right. It was a very difficult decision, right? Initially, we were like, we’ll do both. Keep the store and we’ll do this. But basically, you know, we were a small team, we had very little funding, right? So we couldn’t go ahead and hire 50 people, right? We had raised another round at that time from angels. There was this guy called Madhu Kela who was the ex-CIO of Reliance, he invested some money. There was a small sort of investment bank that had invested some money, right? So we raised another about, I would say, $800,000, at the time. And we tried to kind of do both, the stores and do this, but very quickly realized that we don’t have the bandwidth, right? They’re two totally different businesses. We’re not at a scale where we can do two things. Right. So then finally, somewhere around, you know, mid-2017, end-2017. We took the decision that we have to close this out, right? There’s no other way around it. And then finally, around 2018 early, we finally ended up closing the stores. And we then had a much more focused point of view on growing the product, FMCG bit.

Akshay 21:53  

Okay, so what was the digital distribution? What was it like through marketplaces that you started listing products? 

Ameve 22:00  

Initially, we were purely marketplaces and offline, right, so we started from day one on offline. So we started selling in large walk-through stores. So you know, in Bombay, like a Patel or Krishna, like the large format. Not modern trade initially, we didn’t want to pay the listing fees honestly. So we went to like, what we call today, standalone modern trade. Right. So these are standalone walk-through stores that you find in a neighbourhood. There’s about 10,000 of these in India, right? And we would spend a lot of time creating content as well. But what we realized is that, you know, we were trying to put a lot of content, like, for example, every juice bottle had a yoga pose, which was useful for the problem that you’re trying to solve, right? We would put pamphlets, we would put a lot of A+ plus content on Amazon, very quickly realized that we need our own platform, right? If you really want to estimate information, there’s no other way. Right. So then that’s when kapiva.in came in. And then now kapiva.in has slightly overtaken amazon as the largest site. So yeah, that whole pivot happened. We raised our first proper Series A,

Akshay 23:08 

When did you launch kapiva.in?

Ameve 23:12  

I would say mid to end 2018. And we started scaling it properly I would say 2019. We launched it in 2018. Like, we didn’t know anything. I don’t know what I was doing. We launched a website, I was learning on the go, it took me some time to figure it out. Right. And we weren’t really that well funded at the time right. Nowadays I see startups and it is probably a good idea, they go out and raise capital dollars and a full team is ready on day one right? But you know, we didn’t have that. I come from a traditional business as well. So, we were still trying to figure things out. Now we have, I would say, one of the things I’m most proud of in Kapiva is the team, right, I think we really built a solid team, we’ve really managed to get some fantastic talent from some of the best companies out there. And growth has also kind of been accordingly now they really come in and taken it to a different level. But back, then we were still just figuring stuff out. 

Akshay 24:14  

You were talking about your series A. When did that happen? 

Ameve 24:17  

We raised our Series A in end-2018, early-2019, sort of in two tranches. It was led by Fireside. At that time, you know, the company had started to get some traction, right. And our angels also all topped up. So it was a combination of that. Fireside, really, I would say I still am so appreciative of them. Like they really were a fantastic investor to have at that time. So there’s one that I recall, Vinay, who had a lot of experience online, right? Our board member Kanan had a fantastic experience with offline distribution brands. Right. He was CEO at Dabur for many years. And so he understood the category very well. So really the perfect investor for us, right? Like, I think I was, like, super happy about that decision till today. So like, so they came in, and that’s when we really started being able to grow a lot faster. We had raised about a total of two and a half-million dollars at that time. And that’s when we really started to grow as a business. We started to hire better people.

Akshay 25:19  

What kind of revenue were you at around that time, like the end of 2018, early 2019.

Ameve 25:24  

So March of 2019, we would have been at roughly about a crore

Akshay 25:30  

And so three tabs. One is kapiva.in, second is the marketplace. The third is the standalone modern trade. And what was the split between these three channels at that time?

Ameve 25:40  

So actually, offline was big that time. Offline was about 50-60%. And the balance was online, right? Actually, March 2019, is when online started to take off. Amazon started to grow, our website started to grow very aggressively. So today offline is 8% of our sales. Well, it’s not like it’s not grown, right? It’s grown year on month, per month, per month, just like online has grown a lot faster. So you know, just to give you an idea of the journey, let’s say a crore, maybe about 90 lakhs in March of ‘19 right? March of ‘20, we probably about two and a half-ish, right? And then March of this year, we are probably around about five and a half-six. Right. So we don’t have one of those stories where we went from one to 500 crores in a year. Right? I know there have been a few. We took our time to grow. We’ve grown like 200-250 per cent year on year. Today roughly about 100-crore business.

Akshay 26:47  

Okay. Like this year, you will cross 100 crores?

Ameve 26:50  

Our current run rate is somewhere around 100 crores and annual will also be somewhere on that, correct. 

Akshay 26:55 

What are the secrets to that success? Like, how did it grow so fast? What are the things you did to make it grow?

Ameve 27:03

Made a lot of mistakes. Let me not pretend. We did a lot of things that were wrong in the beginning. I would say today looking back, the two most important things – Number one is that we have a very strong data infrastructure and use data to make decisions. I think people always delay that. If I had more insights through data earlier, I would have been able to grow faster.

Akshay 27:25 

Give me an example of what that means, like deciding what product to put on the homepage?

Ameve 27:30

But understanding how consumers are behaving right, understanding the new funnels, understanding what retention actually is, what LTV actually is, you know, so I think stuff like that, you need to have a very strong data infrastructure to get that live data, right? Very easy to kind of take Excel and put it together once every three months, and try to make that decision. But you know, on a daily basis, if you’re looking at LTV versus AOV, your decision will be very different. Right?

Akshay 27:57 

Help me understand this. For someone who’s not from this space, what is LTV? What is AOV?

Ameve 28:04 

so LTV would be a Long Term Consumer Value. So AOV would be the Average Order Value. So let’s say today, you’re coming in and buying for 1000 bucks, right? So in my mind, I’m looking at consumer acquisition costs. And I’m looking at what I’m making today. But the reality of it is that what’s really important is how many times that consumer comes back, and what is the actual lifetime value. And then certain products, for example, will have very high AOV like, “Oh, this is doing really well let me push the product.” But there are certain products where consumers are actually loving it and coming back to buy 20 times for that. LTV would be much higher. Right? So this is one example. And if I had the clear data, then you would put your money on long term bets, right? Not a short term thing, then you need data for that. The second thing is to focus on retention, right? Paid acquisition is not sustainable. We invested a bunch of money initially on Google, Facebook to acquire customers, right? But in reality, what really helped us grow is giving the consumers the best possible experience. So they come back often. See the most important thing is a product. Actually, good health outcomes. If someone is buying a product for a specific problem, it should have a solution. But also a lot of other things matter. Delivery time, customer support. And honestly, people like Amazon have set the bar.

Akshay 29:27  

Yeah. Next day delivery.

Ameve 29:30

Next day delivery, if you have a complaint they’ll refund you immediately. You have to benchmark yourself to Amazon. Yeah. So a lot of people think no, Amazon is there, whatever. That’s the competition, you have to accept it. So building a fantastic customer service system, really replying to customer grievances very quickly, right? Having a very liberal cancellation policy, right? If somebody has a problem, cancel it. Give them refunds quickly, things like that. So spend a lot of time not only on having a fantastic product but on consumer delight. And you should have a fantastic experience when they are buying from you.

Akshay 30:04

How did you build the data infrastructure? So you said that data infrastructure is super important? What does that mean? Does it mean hiring data scientists? Or does it mean investing in some software? 

Ameve 30:17

Sure. So I would say we’re still building infrastructure. Honestly, it’s a process that never stops, right? Whenever you think that you’re good, you see something that’s much better. So you’re constantly in the process of improvement. But, you know, as a first step, what I did was that I spoke to like 10 people who have already done a fantastic job with it. Our Series B investors, Vertex, do have a lot of tech companies that have invested in. Fireside also has a bunch of companies that have scaled a lot. They also have a strong data backend. So I spoke to a lot of founders. There’s a lot of sort of, I wouldn’t say mentors, but advisors that I speak to, I feel that you know, there’s no need to reinvent the wheel every time. Definitely innovate. But if someone has already done something, well, the least you can do is understand that in great detail. So I got a lot of advice, spoke to a lot of people and kind of figured out what the right way forward is. Then we made a couple of hires, we are now hiring data people, we’ve hired a first data person now. We didn’t have, but we had people who understood data who worked with data, but they’re not data scientists. Right? I would say potentially. And the reason why I brought this up, I will say potentially, we were late. Looking back, I should have probably hired people a little bit earlier. Better late than never, I did hire people who understood it. And we did use outside help, we used an agency, we used a tech company to help us. But you know, basically, the thing is that if you don’t build a website with that mindset on day one. It’s very difficult to do it retrospectively. If the website is done and you haven’t put it in place, then it becomes very complicated. So the most important thing is building a website, keeping it in mind.

Akshay 32:04

And when did you do the series B and how much was that?

Ameve 32:08

Sure. So Series B was early this year, right? Almost late last year, actually. So we finished in November last year, and we raised about $10 million. 

Akshay 32:20

And what are you valued at now?

Ameve 32:25

So we raised about 10-12 million dollars in our series B and we diluted about, I’d say about 18-20% of it. And then now we are about 70% bigger than what we were then. We don’t really have a new valuation. But we haven’t really gotten it. 

Akshay 32:46

How did the lockdown impact you? Did you see offline falling? 

Ameve 32:53

So initially, it was a disaster. So when the lockdown was first happening, which was April of last year, I was just about to close a bridge round. And then COVID happened, right? It was really stressful. And the first month was chaos, right? Everything shut down. Like there were no factories, there was no Amazon, there was nothing. 

Akshay 33:15

Even your supplies would have been disrupted. 

Ameve 33:17

Exactly. Right. But we saw the lockdown coming to some extent as it was happening globally. So we built up a lot of inventory, right? We actually made a full lockdown plan a month earlier and said that okay, it is going to happen. So now what do we do about it? So, we built a lot of inventory. We got alternate suppliers for a lot of our key products. You know, in case one shuts down, we can go to another. We’ve stuffed Amazon inventory, we do FBA, right, we stuffed our distributor inventory. So we really just kind of upped the channel. Took a little credit to do it, but we did it right. That really helped us bounce back very quickly. So April was, of course, a disaster. We tanked but we bounced back quite a bit in May. 

Akshay 34:02

Right. Okay. So what is your customer acquisition strategy? Do you like to rely on more content as a way to get ranking on search engines or do you pay for acquisition?

Ameve 34:18

So, honestly, we spent very little on consumer acquisition until I would say, like six months ago. So to build, we raised a Series B, right? But as the organization, you know, we spend actually very little money to get to where we are. We always tend to be very efficient right? Now, in retrospect, maybe we could have been more aggressive. But for example, we are starting our first ATL campaign, which is our brand campaign this month. Right? We’ve never done any brand marketing, right? 

Akshay 34:52

On TV? Or where?

Ameve 34:55

Yeah, like YouTube ads and stuff like that. Right. We started performance marketing at any scale, for the first time early this year. You know, which is paid acquisition, right. So a lot of early acquisition was honestly just word of mouth. We have fantastic retention from our consumers for products, some products are like 40% Plus, and I’m talking about like, just on our website. You know the average consumer on Amazon buys us five times in a year. So we have really good sort of repeats and a lot of consumers who’ve gotten good results becoming advocates, right? In health care, what we noticed is that if you have something effective, something that works, people will tell 10 people about it, and they will recommend it. And that’s a very common way where people actually end up trying something. Someone tells them, “Hey, you know, try this, it really works.” So a lot of our acquisition and growth actually came completely organically. Six months ago, we did start using spending on Facebook, Google, but again, it’s not our key strategy. Like only a minority of our revenue comes from paid. What we are growing now aggressively is content because people are hungry for content in healthcare, right? You know, and we want to put down a very sort of validated scientific route. Like, have very high rigour in our content we create, you know, have very clear citing sources, look at it, then try to create very solid, high-quality content, which will stand up to scrutiny anywhere, globally. And we feel that we can really create a lot of content to be able to allow consumers to make the right decision of what’s good for them. Right. We also have a lot of sort of integrations to guide consumers to the journey through our website, right. So I mentioned that you know, we have free doctor consultation which we do almost 300 a day, right. On top of that, we also have something called a customized user journey we create. So today we do it through telesales, right, where you can talk to a specialist, or nutritionist that can kind of help you guide you through a journey. Going forward we are trying to make this more tech-based. So that’s something

Akshay 37:17

Yeah like an app, you enter some information.

Ameve 37:21 

Don’t want to say much about it right now. So they’re still working on that so we’ll have that in the next couple of months. So ideas to use things like that to acquire consumers, which are long term, which actually grab the value. And talk about that in our advertising. I think, you know, paid acquisition through Google, Facebook can be strategic, but can’t be a long term sort of plan. That’s what we feel.

Akshay 37:41 

But do you see yourself being mass-market FMCG? Like Dabur which has even toothpaste with Ayurvedic benefits? And, you know, so it’s like the mass market? So do you see that path? 

Ameve 37:55

So, we have a few filters that we put before we launch any product, service, anything. You know, I think the first filter is that, is it something that’s really benefiting the consumer in a real way. That’s the first filter a product needs to pass through. And we have multiple ways of checking that including consumer trials, right? And doing a lot of research. See, the beauty today is actually there’s a lot of research globally done on Ayurveda. You know, so if you want to find out about an ingredient, there’s probably 50 clinical trials you can go through globally. So it’s a lot of time creating a fantastic product. If it passes through that filter, I think the second filter is that, is it at least something scalable to the point where a million people can use this? And very often what happens is that if you pass the first filter, price becomes the problem. If you really want to create a fantastic product, it becomes very difficult for you to do it for 80 rupees, right? Because you’re buying very rare herbs very often which are not even grown, right, you have to have a forest license to be able to pick those in a sustainable way once a year. It’s complicated. So you’re not able to do it on huge scales, right? A lot of us pass a very small batch. Like for example, the amla we use or something very specific kind of amla called Chota amla from Pratapgarh. Because they are smaller but have a much higher potency. And we go from planning to packing in four hours, once we leave it exposed it degrades very quickly. So, with a lot of sourcing and process stuff, it is very difficult to scale to a very large extent right. So never going to be able to be that mass-market right you know, we sell something called A2 Ghee which is ghee from Indian non genetically modified cows, right? Like five times less milk than a regular cow and they have much less fat so the amount of ghee is like eight times less. These things are not things that you can do on a huge scale so that’s why I said that very clear thing our ambition is 5 million people. One of the things we’re constantly trying to think about though is how do we create something which is fantastic yet affordable, right? And has a much wider impact and currently, that is one of the reasons why we are so passionate about stuff like content right? It helps everyone. You know, and a very big part of health, like I said food is one part of it, your daily routine is, your overall exercise, what yoga you’re doing, what not to eat, etc. That is something where we feel we can make on a very large scale. A product that you hit that ceiling right where if you really want to create a fantastic product, it is going to cost money to build, then automatically kind of makes it more difficult to make it massy.

Akshay 41:04

And do you directly compete with Baidyanath also, how does that equation work? 

Ameve 41:10

Very little. We have maybe two-three products in common, right? But again very different consumers, different ways to project the product, different distribution channels, right. So, we find very little conflict at all, if any. And also, you know, Baidyanath is very much core traditional Ayurveda.

Akshay 41:31

What do you see as the exit for investors, an acquisition or a listing or what? 

Ameve 41:37

Like, my dream is to list, honestly. I love this business. I really enjoy it. I’m really passionate specifically about the product part. Right. So as we professionalized, you know, a lot of new people have come in. Like people who understand websites 10 times better than me, but one thing I’m really passionate about and really love is the product, right? Putting my blood, sweat, tears into making the best possible product out there. I would like to think of this eventually as a listed business.

Akshay 42:04

Are you also doing content on video? Or is it only text? 

Ameve 42:08

So you are going to see our first big flurry, we are doing a content video on YouTube, mostly. It’s not content. So we collaborate with people to create a lot of content. So our YouTube sort of content we’ve created has gotten, I think, the marketing team was just telling me very happy the other day, I think like 30 million views or 40 million views. So we do a lot of content co-creation.

Akshay 42:31

With Ayurvedic doctors and experts?

Ameve 42:35

Ayurvedic doctors, you know, health experts. So we did a lot of work with Pooja Makhija, who is a very famous nutritionist. We are also now for the first time actually creating our in-house content, right? So content videos on you know, different herbs benefits, lifestyle, sleep. So that’s something we are investing, we will be seeing a lot more of that over the next few months.

Akshay 42:58

And do you plan to launch a mobile app also?

Ameve 43:03

It’s something we’re thinking about. We haven’t really started anything towards it yet, to be honest, but it’s on the cards. I think my big belief is that, you know, you really need to be very focused on what you do, and what you need to do is to get it right. So right now, a lot of different things we’re doing, we are creating our entire content infrastructure in the organization. We are also doing a lot of stuff. We have a new website launching in the next three days. They’ve already started the beta. So if you go to kapiva.in, 10% of people will already start seeing the new website. There’s a lot going on, we want to get this right. Not opening too many things together. Never a good idea. Definitely something on the cards but still a little while later.

Akshay 43:48 

And how is work split between you and your co-founder? Like what do you look after? 

Ameve 43:52 

So I primarily look after product, D2C, much of the strategy work, fundraising and things like that. And then we both kind of look at the finance sector together. Shrey looks at marketplaces and full operations. He also is involved in finance and as well offline, right. So, you know, honestly, what I’m telling you right now is more about the structure maybe three months ago, but as more senior people have come into the team, there is more integration there. And then both of us are spending more time doing everything right. So I think now the idea is to manage the overall vision, you know, the one thing I still would like to spend a lot of time on is the product, right. But overall, you know, we’ve got like a very good sort of head of revenue, a good kind of guy who so we hired this guy recently, who was the number two guy in Uniqlo, to kind of manage marketing as well as operations. We hired a very senior guy who was ex-director of growth at Myntra, growth at Hotstar to like, kind of look at revenue as a whole. So these guys are fantastic. And you know, they are kind of taking a lot of the lead in their kind of thing. Over time, I’m still very involved in the product, and then making sure all the pieces are working together, and making sure that the strategy of the organization is going in the right direction and more involved across functions. 

We hope this conversation inspires you to go natural and introduce more Ayurveda in your life. Check out the entire range of ayurvedic products from Kapiva on Amazon or www.kapiva.in

As busy as it can get, health, in these times, has taken a back seat. We often fail to consume a proper diet which leads to numerous deficiencies.

Founder Thesis brings you the journey of one such founder who has made it his mission to make Ayurveda an integral part of the day-to-day life of the modern consumer.

In a candid conversation with Akshay Datt, Ameve Sharma, Co-founder, Kapiva, has taken us through his journey. Ameve has previously worked with McKinsey across various projects before setting off his entrepreneurial journey.

A third-generation entrepreneur of the 104-year-old Baidyanath, Ameve started Kapiva in 2016 with Shrey Badhani, intending to bring the wisdom of India’s ancient food traditions to its modern-day consumers. And today, Kapiva has scaled into a 100cr brand in the D2C segment.

Tune in to this episode to hear Ameve speak about how Kapiva is disrupting the health and wellness industry by presenting the benefits of Ayurveda in contemporary and convenient formats.

What you must not miss!

  • The learnings from consulting and how can they be applied in a start-up.
  • Why is it important to understand the consumers?
  • Why must founders create a data infrastructure? How can this help in taking decisions?
  • Why is it paramount to build a fantastic customer service team?

EPISODE TRANSCRIPT

Akshay Datt 00:29  

The first story that I want to hear from you is about the legacy family business, you come from a well-established business family. Tell me about that story. Who was the person in your family? Who started it? How did it start? What kind of environment did you grow up in?

Ameve Sharma 01:47  

Sure, so the business is Baidyanath, typically famous for chyawanprash, isabgol and your traditional kind of Ayurvedic products started back in 1917 by my grandfather and his brother. So basically, he was very much involved in the freedom movement, my grandfather, and one of the reasons why he got into Ayurveda was that he wanted to get back to the legacy of India and the sort of knowledge that we had. So, I think he was a really different kind of person, you know, like an inspirational figure. There was a very rudimentary kind of packing materials, very labour-intensive, for sure. But also, at that time scale, in general, was much smaller, right. So, there weren’t that many consumers in India anyway.

Akshay 02:42  

Okay. So, like, when you were growing up, it was understood that you would join the family business? 

Ameve 02:47  

Yeah. You know, at that time, the structure you’re working on was still a very acceptable structure, right. You know, things got more professional, but yeah, the expectation was that I would join the family business, right. I grew up very involved in business, right. So okay, I started visiting factories and offices at a very young age, okay. Went for market visits and stuff at a very young age.

Akshay 03:13

Okay, okay.

Ameve 03:15  

So it wasn’t explicit, but there was understanding. But, you know, basically what happened actually was that at one point, I felt that there was more I wanted to do, right. You know, I felt that in the family business there was a way to kind of professionalize it. And with the family setup, it’s better to go down the professional route than me being involved. 

Akshay 03:42  

So before you actually joined full time, what did you do in terms of education? 

Ameve 03:47  

I did my double major in international politics and economics at NYU. Okay, post that actually, I was supposed to actually get a job in LA, when I graduated a semester early, which was a bad idea. 2008 December, which was the middle of the financial crisis. So I didn’t get the exact job that I wanted to, honestly, right out of college and had a job, but I thought working in the business would be a better experience.

Akshay 04:13  

What was the McKinsey stint like? What did you learn?

Ameve 04:18  

Sure. So I would say the biggest learning honestly was how to take a larger problem, break it into smaller pieces and make it very solvable. Right. And also discipline and structure. Right. I think I didn’t know what it meant to work hard until I was at McKinsey. I thought 9 hours was more than enough. But then you know, when you see people slogging, like 13-14 hours you realize there’s a different class. Really taught me a lot of discipline, really taught me hard work to a different level, right. And at the end of the day, what I realized is that if you enjoy your work, it’s not working anymore. You need to work hard to be successful. That was obvious, right? But you can only really work hard if you enjoy what you do. I don’t think you can otherwise. 

Akshay 05:06

Yeah, absolutely. 

Ameve 05:09

So funnily enough, after McKinsey, I started kind of thinking about what to do next. Right.

Akshay 05:14  

But if you were enjoying McKinsey, why did you want to do something next?

Ameve 05:18  

My co-founder actually went to Xavier’s Bombay, with one of my really close friends in Calcutta, right. So I knew him through him. When I came to Bombay at McKinsey, I didn’t really know anyone. So he ended up being one of the first people I met, right. So he got friendly. And then he wanted to start something as well. Right. So you know, we actually spent a lot of time trying to figure out what to do, right. And we talked about everything from tech to fund to food to the restaurant, right? Funnily enough, we ended up in Ayurveda. But honestly, we felt that was the largest opportunity at the time, right? We saw it exploding. And so yeah, we spent a lot of time discussing what we wanted to do. I was quite clear that I wanted to leave because I was there for the experience. I was there to learn. I was not there for the long term. I knew that from day one. And I wanted to start so I started after a year or so, I started figuring out what I wanted to do. Okay. So that’s when I and Shrey kind of started talking. And that’s how Kapiva was born.

Akshay 06:20  

What was the thesis? Initial thesis? What did you want to do?

Ameve 06:26  

So a couple of things, right? There were a lot of things that I wanted to do in the original business in Baidyanath which I was not able to do because of whatever reasons like you know, bureaucracy, process, whatever, right? And a big part of it was actually breaking Ayurveda out of the mould it was stuck in. Now, I told you my grandfather wanted to create this Indian Ayurveda business, right? But the fact of the matter is that all traditional Ayurveda businesses today are very much westernized, right. It is not about problem-solution. Right? It is about staying healthy, being healthy, is about balance, right? The name Kapiva comes from the tri-doshas – Kapha, Pitta, Vata. And the whole idea about Ayurveda is to have a balanced lifestyle and a balanced body so you don’t get sick. Right. And a small part of it is that you know, symptomatic relief if you get sick. Today, 99% of Ayurveda has become that small problem-solution bit. And the 99% of real Ayurveda, which is actually staying healthy, is kind of lost. So it is about, A, to get good Ayurveda treatment, right? For a complicated treatment, you need a doctor, right? Yeah. Very difficult to kind of just go pick stuff off the shelf for something serious, right? If you have constipation or something like that, it is fine. But for something more serious, you need to be a doctor. And there are very few really good quality doctors, right? Also because the number of them graduating is very low. The government has been doing some good work in trying to increase it in the last couple of years. But it takes a long gestation period. 

Akshay 08:11  

Okay. And I think around 2017 is when you started?

Ameve 08:18  

Late 2016, roughly. Yeah. So we started the clinics, late 2016,

Akshay 08:21  

How did you fund this, like, you know, setting up a clinic and all that?

Ameve 08:25  

So we started with the initial funding round, maybe about $4,000, right? I put in some money and Shrey put in some money, and we also got some family and friends to kind of invest, right. So we started with 100 grand, and that got us five stores.

Akshay 08:41

And this was like a service business at that time, not a product.

Ameve 08:45 

Basically, we had a product line as well. So we created in-house products, right? And then you walked into the store, half the store would be Kapiva products, half the store would be third-party products, and then you had an Ayurvedic doctor and sometimes nutritionist, etc. in the store. So you can come to get customized advice for what products to take.

Akshay 09:01  

How much were the stores making?

Ameve 09:06  

So we recuperated our cost within about seven-eight months. Okay. The cost started being profitable, in like 9-10 months. It is actually very good for retail. We created a very efficient box. Right. So it was like a 300 square foot store. Okay, very cheap to set up. And, you know, we spent a lot of time building that model, we thought we’ll build 100 of them, 200 of them. But we built what we very quickly realized that this was going to be impossible to scale. For two reasons, the first was that because it was a very small box, right? The breakeven for a store will have four-five lakhs. And good stores were doing like six-seven lakhs, right. And the maximum you would do is like eight lakhs, which is a good outcome per month, right. So to create, and you say before this work that I put in private equity, right? The ambition was large, the ambition was not to create something small. We wanted to do something big and impact a lot of people. The first thing we said I remember and we still talk about today is that we want to make 5 million Indians live a healthier life. That was the first level goal, right? How do we make 5 million households rather, you know, be healthier, live healthier, have better sort of health outcomes? And at the end of the day, we found that this would not be that business, right? Because opening a store was becoming very time-consuming. Right?

Akshay 10:31  

Yeah, you need to finalise the place, negotiate a lease, do the interiors. 

Ameve 10:37  

And also what we found was the doctors very quickly would move on. Right? So we would spend a lot of time hiring a doctor, training them and then they would look for other opportunities. Because high-quality doctors don’t actually want to sit in a store. That’s the fact right. So they want to do R&D, they want to manufacture. Very few of them want to treat, and if they want to treat and you are an MD, then eventually your dream is to have your own clinic, which is fair, right? So we found that a lot of young doctors would come. We would train them after doing the MD, and then they would move on very quickly. Right. So we were really struggling to scale. Right?

Akshay 11:16  

These Kapiva branded products that you had in the store, how did you get those ready so fast?

Ameve 11:23  

Sure. So we of course leveraged a lot of the backend from the family business, right? There was also a lot of contract manufacturing we got done from my business as well. Honestly, even till today, I would say the family business was a huge help, right, like having that background and being able to pick up the phone and call someone for advice. Even you know, something as simple as sourcing raw materials. Right? It’s not easy to get the right quality at the right time at the right price. So all of the supply chains for even contract manufacturers we’ve built out, right? We’ve told them when to buy what raw material from where because that really makes a big difference. So at that time also, we got a lot of support from the business and still today, from a knowledge point of view, we get a lot of support. So yeah, once we started the store, we found scalability was a problem. And at the same time, it was kind of the best place in the world to do market research. Shrey and I spent a lot of time in the physical outlet, right, talking to customers. So we must have like, spoken to, I don’t know, maybe 1000 Ayurvedic customers by the end of the year, right? Maybe more, right? And, in a way, if you think about it, it’s a store where you have a brand new unknown brand called Kapiva. And then you have five very well known brand networks, right. So it very clearly showed us where the gaps in the market were, you know, what consumers were moving toward what they wanted, right? And taking the same vision we had initially, we realized that there’s another big part of Ayurveda that we could potentially provide at scale which is actually something that exists to some extent, but not really, which is Ayurvedic foods or nutrition, right.

Akshay 13:15  

Then chyawanprash is part of this?

Ameve 13:19  

Yes, kind of. Chyawanprash is borderline, right? So I would say on one hand you have medicinal Ayurveda, right, which is capsules, cough syrups, tablets etc. On the other hand, like what we have, for example, is Ayurvedic breakfast, right? So Ayurveda has a very clear point of view on what grains are good, right? You know, for example, we have, I think, breakfast with barley, amaranth, oats, five grade grains with amla, turmeric and tulsi, everything with high fibre, high protein, very low calorie, and no preservatives, no additives, right? We are basically incorporating the principles of Ayurveda in health, in food, right, and creating nutrition. 

Akshay 14:14  

And so when did you realize that this is the way to go? Like, initially you had those stores…

Ameve 14:20  

We figured out two-three things. So what we figured out is that you know, if I’ll give you an example in my house, right, I’ve been having a shot of amla juice every morning since I was like eight years old, right? Okay, we have this very funny thing like after lunch. We take dahi, put ashwagandha powder and honey, and that’s like a dessert. Right? So we incorporate Ayurveda into our daily lives, right? You know, so I take Ayurveda herbs as part of my daily supplement. And we found that to be really something very different, right? And you know, I think I keep telling my father to at least take about five minutes and be my spokesman, right? He is the epitome of health and I don’t want to jinx it by saying your age, but yeah, at this age, right, like, people can’t believe it, when I tell him what his age is, right. So, see how it can really in the long term benefit you and keep you healthy, right? And see, Ayurveda is very simple. It is actually just good food. It’s like, you know, Amla is the richest source of vitamin C in the world. And at the end of the day, a lot of Ayurveda you can actually measure in nutrition, right? So the same way you eat a lot of spinach, you get a lot of fibre. Right? So a lot of Ayurveda is actually very simple, right? And there’s also now a lot of data on Ayurveda especially. So the number one, let’s say digestion product in Europe is Ayurvedic. The only FDA approved product globally for the liver is Ayurvedic. So there’s a bunch of research happening now in the US, in Canada, you know, on things like ashwagandha, turmeric, and a lot of it has been very positive. Most large pharmaceutical companies now right from your Pfizer’s have a herbs division, where what they do is like, they look at herbs that have been used across the world, try to isolate active ingredients and synthesize them. Ayurveda is a very simple kind of thing to understand, but that’s why, you know, it’s about good nutrition, eating well, every day. Right. So we wanted to bring that daily health angle. There’s a saying in Ayurveda – in English roughly, “health is not the absence of illness, but it’s the presence of vitality.” That, you know, when you wake up in the morning, and you’re like, ready to go, fresh, right? And you’re energetic throughout the day, right? And those things are key indicators of good health, right? And what we found is the second reason why we realized that nutrition-based products are very key for lifestyle problems, right? So when I say problem, what do I mean? And these have become very prevalent today. Digestion is a big one, right? Everything starts from your stomach. Skin, hair, hair fall, having blood sugar, rise in blood sugar at a young age, right? Diabetes is something that we don’t, but nutrition becomes very difficult and right, then you need a lot of different things. But when you have, let’s say, high blood sugar, then even a doctor will tell you nutrition is the key thing to solve. Right? Like say if you have hair fall, you go to a doctor, the first thing they tell you is that hair is the part of the body that is deprioritized the most. So more than applying something on the head, more important is good nutrition. So there’s a lot of these problems which are followed by good nutrition, right? So what we did as step one in the new business was that we wanted to solve the food part of it. So the idea was that how do we kind of create this category of Ayurvedic food? How do we incorporate Ayurvedic wisdom and kind of give people better quality nutrition, right? We were at the same time very aware of numbers two and three. All right, numbers two, and three, also very important, right? One is still incomplete. So we already are today doing that. And working a lot about creating an entire ecosystem. So we, as a company, don’t see ourselves as a product company, right? We see ourselves as an ecosystem where we get knowledge. Till today, we offer free consultation on our website with Ayurvedic MDs, right. So you can go on our website, any problem, talk to them, they’ll give you an entire detailed nutrition plan, 70% of the stuff that they suggest is not from Kapiva. So we said to give the best possible thing, right. So if we have it, if we don’t give whatever’s best, right, you know, we have a lot of content and we now created a huge team. We’ve actually tried to get a lot of people from Curejoy, which I believe is one of the best content creators for Ayurveda. And we are now creating a bunch of content around lifestyle, what not to eat is as important as what you eat right? So definitely, we sell products. But then the ambition is not just that.

Akshay 19:16  

Tell me about the pivot phase like from running stores to becoming a food product.

Ameve 19:23

As I said, the ambition was always to bring a genuine form of Ayurveda. As I said, there were two ways to do that. Right? One was the doctor-led sort of better quality medicine. The second was more sort of nutrition, food, lifestyle-based, right? They both require doctors to be honest, and they both require it, it’s all very connected, but depends on which route you go. Right. So we decided that the physical route wasn’t the way to solve this problem. The digital route was a way to solve this problem, right? How do we scale up? You know, advise, how do we create our content? How do we create products? How do we increase the availability, right, and the way to actually do what our initial goal was, which is 5 million Indians live better with Ayurveda. This was going to be much more difficult store by store and probably we’ll be 80 by the time we reach that goal. So online had started to take off a little bit and we had done a few experiments with both online and offline distribution. And we found that there was a lot of scope for growing the business. That’s when the pivot started happening.

Akshay 20:32

Did you shut down the stores or?

Ameve 20:34

That’s where I am coming to. The stores had invested money into them. We had reached breakeven and profitability. Right. It was a very difficult decision, right? Initially, we were like, we’ll do both. Keep the store and we’ll do this. But basically, you know, we were a small team, we had very little funding, right? So we couldn’t go ahead and hire 50 people, right? We had raised another round at that time from angels. There was this guy called Madhu Kela who was the ex-CIO of Reliance, he invested some money. There was a small sort of investment bank that had invested some money, right? So we raised another about, I would say, $800,000, at the time. And we tried to kind of do both, the stores and do this, but very quickly realized that we don’t have the bandwidth, right? They’re two totally different businesses. We’re not at a scale where we can do two things. Right. So then finally, somewhere around, you know, mid-2017, end-2017. We took the decision that we have to close this out, right? There’s no other way around it. And then finally, around 2018 early, we finally ended up closing the stores. And we then had a much more focused point of view on growing the product, FMCG bit.

Akshay 21:53  

Okay, so what was the digital distribution? What was it like through marketplaces that you started listing products? 

Ameve 22:00  

Initially, we were purely marketplaces and offline, right, so we started from day one on offline. So we started selling in large walk-through stores. So you know, in Bombay, like a Patel or Krishna, like the large format. Not modern trade initially, we didn’t want to pay the listing fees honestly. So we went to like, what we call today, standalone modern trade. Right. So these are standalone walk-through stores that you find in a neighbourhood. There’s about 10,000 of these in India, right? And we would spend a lot of time creating content as well. But what we realized is that, you know, we were trying to put a lot of content, like, for example, every juice bottle had a yoga pose, which was useful for the problem that you’re trying to solve, right? We would put pamphlets, we would put a lot of A+ plus content on Amazon, very quickly realized that we need our own platform, right? If you really want to estimate information, there’s no other way. Right. So then that’s when kapiva.in came in. And then now kapiva.in has slightly overtaken amazon as the largest site. So yeah, that whole pivot happened. We raised our first proper Series A,

Akshay 23:08 

When did you launch kapiva.in?

Ameve 23:12  

I would say mid to end 2018. And we started scaling it properly I would say 2019. We launched it in 2018. Like, we didn’t know anything. I don’t know what I was doing. We launched a website, I was learning on the go, it took me some time to figure it out. Right. And we weren’t really that well funded at the time right. Nowadays I see startups and it is probably a good idea, they go out and raise capital dollars and a full team is ready on day one right? But you know, we didn’t have that. I come from a traditional business as well. So, we were still trying to figure things out. Now we have, I would say, one of the things I’m most proud of in Kapiva is the team, right, I think we really built a solid team, we’ve really managed to get some fantastic talent from some of the best companies out there. And growth has also kind of been accordingly now they really come in and taken it to a different level. But back, then we were still just figuring stuff out. 

Akshay 24:14  

You were talking about your series A. When did that happen? 

Ameve 24:17  

We raised our Series A in end-2018, early-2019, sort of in two tranches. It was led by Fireside. At that time, you know, the company had started to get some traction, right. And our angels also all topped up. So it was a combination of that. Fireside, really, I would say I still am so appreciative of them. Like they really were a fantastic investor to have at that time. So there’s one that I recall, Vinay, who had a lot of experience online, right? Our board member Kanan had a fantastic experience with offline distribution brands. Right. He was CEO at Dabur for many years. And so he understood the category very well. So really the perfect investor for us, right? Like, I think I was, like, super happy about that decision till today. So like, so they came in, and that’s when we really started being able to grow a lot faster. We had raised about a total of two and a half-million dollars at that time. And that’s when we really started to grow as a business. We started to hire better people.

Akshay 25:19  

What kind of revenue were you at around that time, like the end of 2018, early 2019.

Ameve 25:24  

So March of 2019, we would have been at roughly about a crore

Akshay 25:30  

And so three tabs. One is kapiva.in, second is the marketplace. The third is the standalone modern trade. And what was the split between these three channels at that time?

Ameve 25:40  

So actually, offline was big that time. Offline was about 50-60%. And the balance was online, right? Actually, March 2019, is when online started to take off. Amazon started to grow, our website started to grow very aggressively. So today offline is 8% of our sales. Well, it’s not like it’s not grown, right? It’s grown year on month, per month, per month, just like online has grown a lot faster. So you know, just to give you an idea of the journey, let’s say a crore, maybe about 90 lakhs in March of ‘19 right? March of ‘20, we probably about two and a half-ish, right? And then March of this year, we are probably around about five and a half-six. Right. So we don’t have one of those stories where we went from one to 500 crores in a year. Right? I know there have been a few. We took our time to grow. We’ve grown like 200-250 per cent year on year. Today roughly about 100-crore business.

Akshay 26:47  

Okay. Like this year, you will cross 100 crores?

Ameve 26:50  

Our current run rate is somewhere around 100 crores and annual will also be somewhere on that, correct. 

Akshay 26:55 

What are the secrets to that success? Like, how did it grow so fast? What are the things you did to make it grow?

Ameve 27:03

Made a lot of mistakes. Let me not pretend. We did a lot of things that were wrong in the beginning. I would say today looking back, the two most important things – Number one is that we have a very strong data infrastructure and use data to make decisions. I think people always delay that. If I had more insights through data earlier, I would have been able to grow faster.

Akshay 27:25 

Give me an example of what that means, like deciding what product to put on the homepage?

Ameve 27:30

But understanding how consumers are behaving right, understanding the new funnels, understanding what retention actually is, what LTV actually is, you know, so I think stuff like that, you need to have a very strong data infrastructure to get that live data, right? Very easy to kind of take Excel and put it together once every three months, and try to make that decision. But you know, on a daily basis, if you’re looking at LTV versus AOV, your decision will be very different. Right?

Akshay 27:57 

Help me understand this. For someone who’s not from this space, what is LTV? What is AOV?

Ameve 28:04 

so LTV would be a Long Term Consumer Value. So AOV would be the Average Order Value. So let’s say today, you’re coming in and buying for 1000 bucks, right? So in my mind, I’m looking at consumer acquisition costs. And I’m looking at what I’m making today. But the reality of it is that what’s really important is how many times that consumer comes back, and what is the actual lifetime value. And then certain products, for example, will have very high AOV like, “Oh, this is doing really well let me push the product.” But there are certain products where consumers are actually loving it and coming back to buy 20 times for that. LTV would be much higher. Right? So this is one example. And if I had the clear data, then you would put your money on long term bets, right? Not a short term thing, then you need data for that. The second thing is to focus on retention, right? Paid acquisition is not sustainable. We invested a bunch of money initially on Google, Facebook to acquire customers, right? But in reality, what really helped us grow is giving the consumers the best possible experience. So they come back often. See the most important thing is a product. Actually, good health outcomes. If someone is buying a product for a specific problem, it should have a solution. But also a lot of other things matter. Delivery time, customer support. And honestly, people like Amazon have set the bar.

Akshay 29:27  

Yeah. Next day delivery.

Ameve 29:30

Next day delivery, if you have a complaint they’ll refund you immediately. You have to benchmark yourself to Amazon. Yeah. So a lot of people think no, Amazon is there, whatever. That’s the competition, you have to accept it. So building a fantastic customer service system, really replying to customer grievances very quickly, right? Having a very liberal cancellation policy, right? If somebody has a problem, cancel it. Give them refunds quickly, things like that. So spend a lot of time not only on having a fantastic product but on consumer delight. And you should have a fantastic experience when they are buying from you.

Akshay 30:04

How did you build the data infrastructure? So you said that data infrastructure is super important? What does that mean? Does it mean hiring data scientists? Or does it mean investing in some software? 

Ameve 30:17

Sure. So I would say we’re still building infrastructure. Honestly, it’s a process that never stops, right? Whenever you think that you’re good, you see something that’s much better. So you’re constantly in the process of improvement. But, you know, as a first step, what I did was that I spoke to like 10 people who have already done a fantastic job with it. Our Series B investors, Vertex, do have a lot of tech companies that have invested in. Fireside also has a bunch of companies that have scaled a lot. They also have a strong data backend. So I spoke to a lot of founders. There’s a lot of sort of, I wouldn’t say mentors, but advisors that I speak to, I feel that you know, there’s no need to reinvent the wheel every time. Definitely innovate. But if someone has already done something, well, the least you can do is understand that in great detail. So I got a lot of advice, spoke to a lot of people and kind of figured out what the right way forward is. Then we made a couple of hires, we are now hiring data people, we’ve hired a first data person now. We didn’t have, but we had people who understood data who worked with data, but they’re not data scientists. Right? I would say potentially. And the reason why I brought this up, I will say potentially, we were late. Looking back, I should have probably hired people a little bit earlier. Better late than never, I did hire people who understood it. And we did use outside help, we used an agency, we used a tech company to help us. But you know, basically, the thing is that if you don’t build a website with that mindset on day one. It’s very difficult to do it retrospectively. If the website is done and you haven’t put it in place, then it becomes very complicated. So the most important thing is building a website, keeping it in mind.

Akshay 32:04

And when did you do the series B and how much was that?

Ameve 32:08

Sure. So Series B was early this year, right? Almost late last year, actually. So we finished in November last year, and we raised about $10 million. 

Akshay 32:20

And what are you valued at now?

Ameve 32:25

So we raised about 10-12 million dollars in our series B and we diluted about, I’d say about 18-20% of it. And then now we are about 70% bigger than what we were then. We don’t really have a new valuation. But we haven’t really gotten it. 

Akshay 32:46

How did the lockdown impact you? Did you see offline falling? 

Ameve 32:53

So initially, it was a disaster. So when the lockdown was first happening, which was April of last year, I was just about to close a bridge round. And then COVID happened, right? It was really stressful. And the first month was chaos, right? Everything shut down. Like there were no factories, there was no Amazon, there was nothing. 

Akshay 33:15

Even your supplies would have been disrupted. 

Ameve 33:17

Exactly. Right. But we saw the lockdown coming to some extent as it was happening globally. So we built up a lot of inventory, right? We actually made a full lockdown plan a month earlier and said that okay, it is going to happen. So now what do we do about it? So, we built a lot of inventory. We got alternate suppliers for a lot of our key products. You know, in case one shuts down, we can go to another. We’ve stuffed Amazon inventory, we do FBA, right, we stuffed our distributor inventory. So we really just kind of upped the channel. Took a little credit to do it, but we did it right. That really helped us bounce back very quickly. So April was, of course, a disaster. We tanked but we bounced back quite a bit in May. 

Akshay 34:02

Right. Okay. So what is your customer acquisition strategy? Do you like to rely on more content as a way to get ranking on search engines or do you pay for acquisition?

Ameve 34:18

So, honestly, we spent very little on consumer acquisition until I would say, like six months ago. So to build, we raised a Series B, right? But as the organization, you know, we spend actually very little money to get to where we are. We always tend to be very efficient right? Now, in retrospect, maybe we could have been more aggressive. But for example, we are starting our first ATL campaign, which is our brand campaign this month. Right? We’ve never done any brand marketing, right? 

Akshay 34:52

On TV? Or where?

Ameve 34:55

Yeah, like YouTube ads and stuff like that. Right. We started performance marketing at any scale, for the first time early this year. You know, which is paid acquisition, right. So a lot of early acquisition was honestly just word of mouth. We have fantastic retention from our consumers for products, some products are like 40% Plus, and I’m talking about like, just on our website. You know the average consumer on Amazon buys us five times in a year. So we have really good sort of repeats and a lot of consumers who’ve gotten good results becoming advocates, right? In health care, what we noticed is that if you have something effective, something that works, people will tell 10 people about it, and they will recommend it. And that’s a very common way where people actually end up trying something. Someone tells them, “Hey, you know, try this, it really works.” So a lot of our acquisition and growth actually came completely organically. Six months ago, we did start using spending on Facebook, Google, but again, it’s not our key strategy. Like only a minority of our revenue comes from paid. What we are growing now aggressively is content because people are hungry for content in healthcare, right? You know, and we want to put down a very sort of validated scientific route. Like, have very high rigour in our content we create, you know, have very clear citing sources, look at it, then try to create very solid, high-quality content, which will stand up to scrutiny anywhere, globally. And we feel that we can really create a lot of content to be able to allow consumers to make the right decision of what’s good for them. Right. We also have a lot of sort of integrations to guide consumers to the journey through our website, right. So I mentioned that you know, we have free doctor consultation which we do almost 300 a day, right. On top of that, we also have something called a customized user journey we create. So today we do it through telesales, right, where you can talk to a specialist, or nutritionist that can kind of help you guide you through a journey. Going forward we are trying to make this more tech-based. So that’s something

Akshay 37:17

Yeah like an app, you enter some information.

Ameve 37:21 

Don’t want to say much about it right now. So they’re still working on that so we’ll have that in the next couple of months. So ideas to use things like that to acquire consumers, which are long term, which actually grab the value. And talk about that in our advertising. I think, you know, paid acquisition through Google, Facebook can be strategic, but can’t be a long term sort of plan. That’s what we feel.

Akshay 37:41 

But do you see yourself being mass-market FMCG? Like Dabur which has even toothpaste with Ayurvedic benefits? And, you know, so it’s like the mass market? So do you see that path? 

Ameve 37:55

So, we have a few filters that we put before we launch any product, service, anything. You know, I think the first filter is that, is it something that’s really benefiting the consumer in a real way. That’s the first filter a product needs to pass through. And we have multiple ways of checking that including consumer trials, right? And doing a lot of research. See, the beauty today is actually there’s a lot of research globally done on Ayurveda. You know, so if you want to find out about an ingredient, there’s probably 50 clinical trials you can go through globally. So it’s a lot of time creating a fantastic product. If it passes through that filter, I think the second filter is that, is it at least something scalable to the point where a million people can use this? And very often what happens is that if you pass the first filter, price becomes the problem. If you really want to create a fantastic product, it becomes very difficult for you to do it for 80 rupees, right? Because you’re buying very rare herbs very often which are not even grown, right, you have to have a forest license to be able to pick those in a sustainable way once a year. It’s complicated. So you’re not able to do it on huge scales, right? A lot of us pass a very small batch. Like for example, the amla we use or something very specific kind of amla called Chota amla from Pratapgarh. Because they are smaller but have a much higher potency. And we go from planning to packing in four hours, once we leave it exposed it degrades very quickly. So, with a lot of sourcing and process stuff, it is very difficult to scale to a very large extent right. So never going to be able to be that mass-market right you know, we sell something called A2 Ghee which is ghee from Indian non genetically modified cows, right? Like five times less milk than a regular cow and they have much less fat so the amount of ghee is like eight times less. These things are not things that you can do on a huge scale so that’s why I said that very clear thing our ambition is 5 million people. One of the things we’re constantly trying to think about though is how do we create something which is fantastic yet affordable, right? And has a much wider impact and currently, that is one of the reasons why we are so passionate about stuff like content right? It helps everyone. You know, and a very big part of health, like I said food is one part of it, your daily routine is, your overall exercise, what yoga you’re doing, what not to eat, etc. That is something where we feel we can make on a very large scale. A product that you hit that ceiling right where if you really want to create a fantastic product, it is going to cost money to build, then automatically kind of makes it more difficult to make it massy.

Akshay 41:04

And do you directly compete with Baidyanath also, how does that equation work? 

Ameve 41:10

Very little. We have maybe two-three products in common, right? But again very different consumers, different ways to project the product, different distribution channels, right. So, we find very little conflict at all, if any. And also, you know, Baidyanath is very much core traditional Ayurveda.

Akshay 41:31

What do you see as the exit for investors, an acquisition or a listing or what? 

Ameve 41:37

Like, my dream is to list, honestly. I love this business. I really enjoy it. I’m really passionate specifically about the product part. Right. So as we professionalized, you know, a lot of new people have come in. Like people who understand websites 10 times better than me, but one thing I’m really passionate about and really love is the product, right? Putting my blood, sweat, tears into making the best possible product out there. I would like to think of this eventually as a listed business.

Akshay 42:04

Are you also doing content on video? Or is it only text? 

Ameve 42:08

So you are going to see our first big flurry, we are doing a content video on YouTube, mostly. It’s not content. So we collaborate with people to create a lot of content. So our YouTube sort of content we’ve created has gotten, I think, the marketing team was just telling me very happy the other day, I think like 30 million views or 40 million views. So we do a lot of content co-creation.

Akshay 42:31

With Ayurvedic doctors and experts?

Ameve 42:35

Ayurvedic doctors, you know, health experts. So we did a lot of work with Pooja Makhija, who is a very famous nutritionist. We are also now for the first time actually creating our in-house content, right? So content videos on you know, different herbs benefits, lifestyle, sleep. So that’s something we are investing, we will be seeing a lot more of that over the next few months.

Akshay 42:58

And do you plan to launch a mobile app also?

Ameve 43:03

It’s something we’re thinking about. We haven’t really started anything towards it yet, to be honest, but it’s on the cards. I think my big belief is that, you know, you really need to be very focused on what you do, and what you need to do is to get it right. So right now, a lot of different things we’re doing, we are creating our entire content infrastructure in the organization. We are also doing a lot of stuff. We have a new website launching in the next three days. They’ve already started the beta. So if you go to kapiva.in, 10% of people will already start seeing the new website. There’s a lot going on, we want to get this right. Not opening too many things together. Never a good idea. Definitely something on the cards but still a little while later.

Akshay 43:48 

And how is work split between you and your co-founder? Like what do you look after? 

Ameve 43:52 

So I primarily look after product, D2C, much of the strategy work, fundraising and things like that. And then we both kind of look at the finance sector together. Shrey looks at marketplaces and full operations. He also is involved in finance and as well offline, right. So, you know, honestly, what I’m telling you right now is more about the structure maybe three months ago, but as more senior people have come into the team, there is more integration there. And then both of us are spending more time doing everything right. So I think now the idea is to manage the overall vision, you know, the one thing I still would like to spend a lot of time on is the product, right. But overall, you know, we’ve got like a very good sort of head of revenue, a good kind of guy who so we hired this guy recently, who was the number two guy in Uniqlo, to kind of manage marketing as well as operations. We hired a very senior guy who was ex-director of growth at Myntra, growth at Hotstar to like, kind of look at revenue as a whole. So these guys are fantastic. And you know, they are kind of taking a lot of the lead in their kind of thing. Over time, I’m still very involved in the product, and then making sure all the pieces are working together, and making sure that the strategy of the organization is going in the right direction and more involved across functions. 

We hope this conversation inspires you to go natural and introduce more Ayurveda in your life. Check out the entire range of ayurvedic products from Kapiva on Amazon or www.kapiva.in

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About Founder Thesis

Candid conversations with some of the most celebrated startup founders of our nation. On Founder Thesis we are on mission to uncover the secrets to building a Unicorn!

HOSTED BY

Akshay has held a lifelong fascination with the people who dare to disrupt, and with The Podium, he hopes to discover what makes one a successful disruptor.

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