We're waiting for deal party to get over before we begin focusing on online: Mad(e) In India

It was not a business where many would have seen huge potential, but Pankaj Acharya, founder & CEO, Mad(e) In India, has grown his souvenir venture into a $2-million company in just two years. Archarya tells Praveena Sharma he is now in the market to raise pre-Series A funding to expand his product line and further organise retailing.

What tempted you to get into souvenir business? What new could you bring into this space?
We started in late 2012. We wanted to build a lifestyle brand based on the core competency of our advertising and communication business – in-depth understanding of India and our creative power. Based on these two, we saw potential in souvenir business. If you go outside India, this business is very organized. In India, it equals to handicraft either in some emporiums that rip you off with very high pricing, or shanty shops from where tourists pick them up. Over a period, we have build a souvenir range that has evolved into mass premium lifestyle brand, which helps us celebrate India.

So, how different is your retail model from the rest of souvenir players?
What we have is a hybrid retail model, which taps both online and offline marketplaces. So, we have 562 different stock keeping units (SKUs) across 21 categories and are doing a little better than our estimates. Right now, we have three of our own stores – one in Gurgaon and two in Mumbai – and 22 dealer outlets spread across international and domestic airports and lifestyle accessory shops like Crossword. We are also selling though e-commerce stores like Amazon, Flipkart, Snapdeal, Fab Furnish and others. We are also supplying to stores in Singapore and Dubai. There is an Indian museum in Singapore, whose souvenir shop stocks our products. By next year or later this year, we will be launching our international range that will cater to the western market. For this, we are tying up with fulfilment centres in the US to serve the Indian diaspora and American public. Unlike others, we do not curate our product lines but create them in-house, where our strategy team decides the story of the product while the creative team designs it. We don't have our own manufacturing unit. We have empanelled vendors, with whom we enter into a contract.

How are you finding your venture?
It has been self-funded till now. We have invested roughly about half a million dollar into the project. We are currently in the final stage of our talks with some investors who may come on board. That announcement may happen later this year. It would be a pre -Series A funding. It will help us expand our operations with more products and retail outlets. Currently, our focus is on hybrid retail model.

Where do you see more traction for your products – offline or online?
Today, offline is moving faster because when it comes to these things, it is imperative that they are physical. That is why we are increasing our footprint offline. We have put on hold our thrust on online because, as we all know, today online is all about deals more than anything else. We want to create a sustainable business and are waiting for the deal party to get over before we begin focusing on online. At present, online constitutes 30% of our business and offline 70%. We are not into building our topline purely for valuation sake. We want to create sustainable business model. That is why we are currently going a little slow in marketing ourselves online but over a period of time, once things settle down, we will get aggressive online.

How much do you plan to raise in the pre-Series A funding?
I may not be in a position to share that with you. Today, our worth is around $2 million. We will be raising money based on this. Post that, in the series A round, we are looking at raising $5-6 million.

Have you broken even?
We have been focusing on it (breaking even) since the beginning and we achieved operational break-even in April this year. Now, the focus is on increasing our product depth and width and improving our retail penetration through our flagship-stores-and-franchise model. We are also looking at corporate gifting as a major driver of our business. Somewhere around June, we started seeing a lot of traction in this segment. So, we have set up a separate corporate gifting department in our company. It is also helping in driving traffic to our website.