India’s Captain Fresh more than doubles valuation to $500 million in three months

Captain Fresh, a farm-to-retail platform for animal protein, has more than doubled its valuation to $500 million in three months as the Indian startup deepens its footprints in the local market and begins to expand overseas.

Existing backers Prosus Ventures and Tiger Global have co-led the startup’s $50 million Series C funding, Captain Fresh founder and chief executive Utham Gowda told TechCrunch in an interview. Existing investors including Accel also participated in the new round.

The business-to-business marketplace for seafood, which has raised over $100 million to date and was valued at about $200 million in its Series B round disclosed in December, is in talks to top up as much as another $10 million in the new round, a person familiar with the matter said. Gowda declined to comment on any extension to the Series C round and the startup’s valuation.

Gowda, a former investment banker, previously spent years tracking the seafood industry. He helped one of the largest exporters in the sector at a time when it was exploring to become public. Though the plan changed, it helped Gowda learn the ins and outs of the market.

“It’s a very large sector but also very messy,” he said, adding that it still drives consumption of billions of dollars each year. “I got a good perspective on how India as well as developed markets were looking at this category and had the opportunity to spend a lot of time on the production floor and deal with purchases.”

Captain Fresh, founded in 2019, is taking a different approach to serving the farmers and customers. “Every other player in the industry has been trying to solve this from the brand perspective or from the end-customer perspective. We believe that the core problem is in organizing the supply,” he said. “It’s a commodity business, but a supply-deprived industry.”

The bet appears to be paying off. Captain Fresh today helps farmers and fishermen sell close to a hundred ton of fresh fish and over three dozen other seafood species each day, he said. The startup, which has set up over 50 collection centers, is helping farmers sell to over 2,500 businesses across nearly all the coastal states in India.

Captain Fresh today also operates in the U.S., Spain and the Middle East, and the international business, which was kickstarted less than three months ago, already amounts to 20% of the overall business. Most big brands – including some e-commerce services and offline retailers – in India have become Captain Fresh customers.

The market for animal protein is highly fragmented. Historically, farmers buy fish and other seafood through an auction and bring produce to wet markets. But this approach is riddled with inefficiencies. For one, if the supply doesn’t come to the wet markets on time, several players don’t have the means to secure the produce.

“We are bringing reliability, which essentially means that [businesses] can place an order to us, we confirm the order to them and next day deliver the product at 6 a.m. So they can then spend all their bandwidth on marketing and sales of the product rather than worrying about procurement and other things,” he said.

“We are also solving for quality. For instance, in our supply chain we measure the quality by what we call the number of touches the fish has had. The more touches it has, the worse the quality will be. We have been able to get the touch points to under five or four from the point the fish was caught to the point of sale, compared to over 25 to 30 touches seen in the traditional supply chain,” he said.

Captain Fresh’s approach has enabled it to extend the shelf life of fish and other seafood by a day to a day and a half. “In a category where the inventory has a three-day shelf life, a day and a half is a significant bumper for anybody who is associated with us as the window they have to make the sale increases by 40%,” he said.

The startup is seeing similar opportunities in international markets, where the supply chain faces the same challenges. “I can now claim that the meat retail in the U.S. is not as evolved and we have a lot of things that we can do to add value to even developed markets,” said Gowda, who joined the Zoom call from the U.S.

Captain Fresh plans to deploy the fresh funds to expand to a few additional geographies, including some in Southeast Asia and Africa. It is also eyeing some inorganic growth via acquisitions, he said.

The startup is also experimenting with social commerce model to help farmers sell more. On its app today, Captain Fresh offers these farmers advisories and content. And, “if you are a fisherman, you can load up your inventory details on our platform and we will sell it on a real-time basis. Then our fulfillment takes over,” he said.

The idea with the social commerce is to help fishers be able to more efficiently replicate the offline experience on the digital platform, he said.

“On the supply side, from a seafood marketplace, Captain Fresh is now entering into the larger animal protein industry,” Ashutosh Sharma, Head of Investments for Prosus Ventures in India, said in a statement.

“On the demand side as well, they have expanded their focus by adding new export markets. All this is enabled by the same underlying tech infrastructure highlighting the platform potential. Captain Fresh continues to execute very well and at a rapid pace. We are delighted to support their mission and partner in their growth.”