Waycool

The agriculture sector plays a crucial role in the economy of India. It not only contributes to
about 16% of India’s GDP but also provides a livelihood for over 60% of the nation’s
households. India currently hosts over 450 agritechstartups growing at 25% year-on-year in
the agri-tech segment and the sector has received more than $248 million funding in the first
six months of 2019. With such a vision, a Chennai-based AI agritechstartup called WayCool
Foods & Products is utilising artificial intelligence and machine learning to fulfil customer
requirements as well as reducing food wastage and production costs.

Food supply chain startup WayCool Foods and Products began life in July 2015 as a B2C
fruits and vegetables supply chain named SunnyBee. Founded by KarthikJayaraman and
Sanjay Dasari, the startup chose to pivot to a farm-to-fork B2B model and now - four years
later - makes almost 90 percent revenue from the B2B channel with the likes of Taj Hotels
among its clients.

WayCool is a food distribution company which sources its products directly from the farmers
through a technology-enabled, mechanized, and partially automated supply chain. The
company leverages multiple distribution channels to supply its product portfolio such as fresh
produce (fruits and vegetables), rice, dal, maida, and other value-added products to both
businesses and end consumers.

WayCool Foods and Products has been set up with the vision of organizing India’s farm-to-
fork supply chain, to deliver cleaner, fresher and better produce to consumers, generate
higher returns to farmers, and reduce wastage and inefficiency. The company intends to do
this by establishing direct links to farmers on the one side and consumers on the other, and by
using a combination of physical and information technology to link them efficiently. The
company is promoted by investors who are keen to create social impact using market
mechanisms. The company’s leadership team comprises veterans with deep experience across
several industries, as well as agri-tech experts. The company serves over 50 wholesale clients
and is scaling the same up rapidly. WayCool also distributes to 12 retail outlets under the
brand, “SunnyBee”.

WayCool establishes direct links to farmers and consumers using a combination of physical
and information technology to link them efficiently. Their vision is to become the largest
food development and distribution company while positively impacting the lives of farmers
in India.

Current Position

Way cool is serving 4000 clients and doing 2000 deliveries a day. 72 percent of the products
are sourced from marginal farmers.35000 farmers are under its umbrella. It is operating in 13
cities with 850 employees, moving 150 tons of products every day. Monthly turnover of 21
crores.

Funding:

Raised two rounds of institutional funding to date, WayCool started off as a small company
based in Chennai, focused on bringing fresh produce directly from farms to end-users and
customers. They ventured into the B2B space in early 2017, when they also raised $2.7
million from Aspada Investments

WayCool Foods had raised $16.9 million in January this year. The funding amount was a
combination of equity and debt, and the round was led by global impact investor LGT
Impact. Northern Arc Capital and Caspian also participated in the round.
Investors:

Network:

Currently, the company deals with food products across fresh produce, staples, dairy, and
packaged products, handling over 3,000 SKUs, delivering to 130+ towns across Southern
India. More than 50% of its raw produce is directly sourced from small-hold farmers.
Use of AI/ML

The majority of AI and ML tools in use are focused on demand forecasting, and supply
planning to ensure that the customer requirements are fulfilled as well as reducing the food
wastage and overall production costs. The company also invests in price forecasting, with IT
tools that analyse weather patterns, local market supplies, price trends, etc. At present, there
are many projects which are in the pilot stage that will be using data captured through the
entire supply chain to drive decision making.
Tech Stack

On top of the transaction processing platform, WayCool has built a portfolio of apps, which
are all being rolled into a platform called RAPID. RAPID includes farmer-facing applications
such as MySoil, Farm Management systems, MyPrice, MyTransactions, supply chain
applications such as Forecasting and planning, Warehouse management system, Digital
Quality platform and logistics optimisation platform, customer-facing applications such as
order capture, tracking and supply performance measurement to ensure that the information
flow is streamlined in both directions and provide the base data for advanced analytics that
will help streamline the process further.

Future Roadmap:

The company will continue to increase efficiency and reduce information asymmetry in the
supply chain. They are also quite clear that while they scale rapidly across Southern, Central
and Western India, they will work with stakeholders who are aligned with them in thinking–
be they clients, suppliers, employees or partners.”

Revenue model:

They follow an omni-channel revenue model with a philosophy of ‘inch-wide, mile-deep’.

This philosophy helps them get to the consumer at the bottom of the value chain in each
channel, while focusing on excellence and scale in every city, without spreading themselves
too thin

Channel-wise WayCool’s revenue model has categories such as food services (hotels,
restaurants, and caterers), processing and bakeries; general trade or sale to kirana stores and
local supermarkets; and modern trade or sale to national supermarket chains and online
distribution players.

Product-wise, 40 percent of their revenue is generated from fruits and vegetables, and staples
(like rice, dal, maida) each. Branded distribution contributes to 15 percent of revenue, while
dairy products account for another five percent.

According to RoC filings, the company reported total revenue of Rs 35.3 crore in FY18. This,
while their expenses have escalated, mostly due to pivoting, geographical expansion, and
acquisitions. In the B2C model they made revenues of Rs 8.5 lakh in FY 2015-16, which
jumped to Rs 1.08 crore with the pivot, in FY 2016-17.

Growing horizons:

The founders chose to pivot to B2B while still continuing the B2C model. Today, WayCool’s
key B2B clients include the Taj Group of Hotels, Elior, and Sodexo, and almost all national
modern trade and online distributors of food products. Their expertise lies in the ability to
efficiently and effectively operate across all the three stages of farm-to-fork value chain:
procurement at the farm level, supply chain, and logistics from farm to cities. And a robust
inter-city distribution network and mechanised material handling. Currently operating in 15
locations, the company transports up to 250 tonnes of fruits and vegetables every day, across
8,000 clients.
They source produce from a network of 35,000 farmers in more than 50 regions in India.
However, moving from a B2C model to a B2B model meant a complete DNA shift. B2B is a
tough business, and needs consistency and constant monitoring.

The startup is currently going through a phase of coopetition where folks who started as
competitors are now collaborating and owning different segments of the supply chain, or
even merging.

Supply chain:

WayCool works with three categories of customers – hotels, restaurants and hospitals coming
under the ‘food category’, the modern trade that includes large super markets, and chains;
and, general traders including the local small retailers. It has distribution centres present one
each in Bangalore and Hyderabad, two in Chennai while one is coming up in Coimbatore.

WayCool’s strong supply chain works across many farmers and a range of product categories
to 8,000 customers in cities efficiently, hygienically, using economical transportation. They
believe that being present in fewer cities doing maximum business is better. Their market
share in each city is 2-3 per cent. There are over a couple of thousand small players in each
city doing similar business but all of them have only a couple of SKUs while they have a
whole range. They began at about 50 kgs. Today they deliver about 250 tonnes in four years’
time.
Tracking Quality:

WayCool is developing a system called Rapid S2S (Seed to Sale) to trace the seed quality, its
sourcing, ASNS or Advance Shipping Notice at Source, auto-inwarding and auto-allocation.
But it all starts with basic visual check at the farm itself followed by checking at the
collection centres for size and shape as sought by the customers.
If a vegetable is not up to the mark, they can trace it back to the farmer, the geographical
location, and even the fertilizer used. Soon Rapid S2S can trace the seed variety used, the
temperature, the date and the time the vegetable reached their distribution centre, and the
feedback by the quality controller of that SKU. This is unique, especially in the food space,
as far as we know both in India and elsewhere.