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AnKa SumMor Foods Pvt Ltd, a tech-enabled start-up that offers plug and play Supply & Distribution (S&D) services to emerging FMCG brands, is in the market to raise ₹13 crore in equity and debt by the year-end.
The money will be used to expand current operations in Hyderabad and Chennai and launch operations in Bengaluru early next year followed by Delhi-NCR and Mumbai, a top executive told BusinessLine .
Incubated and funded by Fireside Ventures in April 2018, the start-up founded by Ashok George and Rajiv Joshi provides emerging, challenger brands like Wai Wai, Yoga Bar, McVities, Bombay Shaving Company and Paper Boat among others, access to modern trade outlets, supermarkets and speciality stores at half the S&D costs they would have otherwise incurred by doing it on their own.
“India has a highly fragmented distribution market which is high on cost. While established FMCG brands would incur 8-9 per cent in S&D costs, smaller, emerging challenger brands would incur much higher costs of 18 – 25 per cent, which we can bring down to 12 per cent with our combined expertise of 52 years in S&D with top FMCG companies” said Ashok George, co-founder and CEO, AnKa SumMor.
He said the ‘SumMor Model’ simplifies the distribution value chain by consolidating and aggregating CFA/Super Stockists, multi-distributors for multi-channel distribution in a metro city or State into a single point operation under one roof.
Besides giving the brands reach and presence across relevant outlets in a city or State, the start-up provides them with outlet level sales data in real time with visibility of sales by SKU at each outlet, improved order fill rates of 90-95 per cent, up from 70-75 per cent; assistance with stock rotation at outlets to maintain product freshness, improved trade scheme utilisation, reduced market expiry and damage, and market mapping.
“We handle the S&D operations for 10 food and non-food brands in two markets – Hyderabad and Chennai, establishing these brands’ presence across 2,100 outlets in these two cities. Interestingly, within 6-12 months of using AnKa SumMor’s services, these brands have also seen a 100 per cent growth in revenue” said Rajiv Joshi, co-founder and COO, AnKa SumMor.
The start-up has achieved 10 times growthwithin 18 months of operations, with an annualised revenue run rate of ₹18 crore. Its revenue is the billing value to retailers.
To expand coverage
Over the next 5 years the start-up aims to establish its operations in 15 cities and direct coverage of 35,000 relevant retail outlets in the top 5 metros by FY 2022, achieve business break even in FY 2023 and deliver ₹700 crore in annualised revenue in FY 2025.
Asked if this is a realistic target, George said: “these are ambitious goals and we are very confident of our model and our execution capability to exceed these targets. Moreover, the revenue opportunity is at least 20 times more in the current market opportunity sizing.”
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