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Meru Cabs promoter's retail venture folds up

Freshkins faced high operational expenses and tepid investor interest; other partners launch go4fresh.in and grocermax.com, while Neeraj Gupta focuses on cab business

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Meru Cabs founder Neeraj Gupta's fruits and vegetables (F&V) retailing venture Freshkins Foods India Pvt Ltd started with much fanfare in June 2014, has folded up.

Launched in association with ex-Reliance Retail and Future Group officials, Freshkins aimed at creating a 'farm-to-consumer' value chain by combining the science of modern retail with the street-side vendor's art of selling.

The company was planning to have 300 franchisee retail outlets (between 150 and 300 sq ft in high density residential clusters) and targeting annual sales of Rs 250 crore by March 2016. While the business progressed well in the initial stages, increased operational expenditure coupled with lukewarm (venture capital and private equity) investor interest, created hurdles in expansion.

"The Freshkins business model required growth capital as most of the existing funds got used up in operations and setting up the required infrastructure. Investors were approached but they were more keen on the online ventures so fund-raising wasn't successful. This apart, activity in the radio taxi business began heating up with players like Uber, Ola, Taxiforsure picking up steam and putting pressure on existing players like Meru, Easy Cabs, Tab Cab and Mega Cab. Thus, Gupta decided to pull the plug on Freshkins and focus on fighting competition from the new breed of taxi aggregators," said a source familiar with the development.

As a result, sometime towards the third quarter of fiscal 2015, the Freshkins operations came to standstill with Gupta stepping out of the business. The other two key officials left were K Radhakrishnan, former CEO of KB Fair Price and president of Future Freshfoods, who was chief mentor for Freshkins and Anjaney Bhutada, who was CEO of Freshkins. Prior to that Bhutada was instrumental in setting up the farm-to-retail operations of Future Group, and had also worked with Reliance Retail.

Calls and text messages to both Neeraj Gupta and K Radhakrishnan remained unanswered. While Gupta is understood to have gone back to focusing on his radio taxi business, Radhakrishnan has co-founded a new online grocery retailing business called grocermax.com in partnership with Gurgaon-based RG Retail Pvt Ltd. Though being online, the operations of grocermax are restricted to Gurgaon area only.

However, Anjaney Bhutada chose to further the business after tweaking the Freshkins model to the current market scenario. Speaking to dna, Bhutada said while Freshkins as a business entity is not functional, the model is very much operational and is now part of a two-year old start-up called Fresh Produce Value Creation Services Pvt Ltd that runs the online and offline grocery retailing business go4fresh.in which Bhutada is co-founder with another former Future Group/Reliance Retail executive Maruti Chapke.

According to Bhutada, go4fresh.in is an omni-channel fresh fruits and vegetables marketplace that has partnered with farmer groups in the nearby areas to sources fresh fruits, vegetables and other farm produce and deliver them at doorsteps to customers in Mumbai Metropolitan Region.

"We also supply significant quantities of fresh produce to institutional customers (hotels, restaurants, catering companies) and food processing entities. The model is successfully operational in Mumbai and we plan to expand to other cities gradually. We should be closing the current fiscal with turnover of Rs 8 crore and take it to Rs 25 crore next year," said Bhutada adding that on the social front the company provides livelihood opportunities for unemployed youth in urban areas.

"Go4fresh.in imparts training and business support to micro-entrepreneurs who transport and sell farm produce through mobile vans / temporary kiosks placed at housing societies / office complexes," he said.

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