QUARTERLY MAGAZINE January 2022 Vol 08
QUARTERLY MAGAZINE January 2022 Vol 08
Focus
RPG Ventures is a company quite unlike its siblings within the RPG Group. An integral part of the $4 billion legacy conglomerate, it supports unconventional businesses while operating within the boundaries of a large, conventional organisation. Some of the better-known investments by RPG Ventures include Seniority & Evergreen Club, Hopscotch, Juno Clinic and Shield Square.
As the Group's corporate ventures arm, RPG Ventures seeks to back businesses that are led by passionate leaders and address a significant market opportunity through a differentiated business model. From the business lifecycle standpoint, it is looking to be the first or the second institutional investor.
The passionate team at Ventures also works with various Group companies to find relevant spaces and start-ups for investments in industries affiliated with them.
Kunjan Chikhlikar, Head – RPG Ventures, attributes the success so far to a collaborative effort between the Ventures team and the strategy and digital teams, across the Group.
This is a massive collaborative effort between all teams. While it is ongoing, an output of this process has been TyresNMore and E-Fleet Systems at CEAT. We have also done some interesting pilots with start-ups for KEC in the past.”
KUNJAN CHIKHLIKAR, HEAD – RPG VENTURES
In addition, the team is currently evaluating the application of drones in agriculture for Harrisons Malayalam, and is looking for relevant companies to invest in.
In the last 12-18 months, with Anant Goenka, MD – CEAT taking over the reins, the company has shifted focus and expanded its areas beyond just corporate ventures to include early-stage consumer brands, mobility businesses beyond tyres, and enterprise software tech. Kunjan adds, “We chose these based on our interest in participating in some of the emerging megatrends we are seeing in these areas. The added advantage is that there are always good learnings from associating with exciting early-stage companies which can be used within the RPG Group, based on their relevance. That’s how we have expanded the scope of RPG Ventures in the last 12-18 months.”
In the last year, RPG Ventures invested in two new companies in the consumer brands space and has two more in the pipeline – in the automotive cybersecurity and drones businesses.
Speaking about Ventures’ realised track record and its gains so far, Kunjan recalls, “We successfully exited out of Shield Square, a cybersecurity business in a little over a year at the end of 2017. This company was later acquired by an Israeli cybersecurity business and is today known as Radware Bot Manager. Another company churning very nicely in our portfolio is Hopscotch, a baby apparel business. While the brand fought through a tough time during the early period of the pandemic, it is now growing at a very healthy pace.”
Ugaoo, a Pune based start-up engaged in the home gardening and houseplant business, is RPG Ventures' most recent investment. This online service offers gardening and plant care products, including live indoor plants, planters and kitchen garden seeds, through its website as well as online marketplaces such as Amazon and Flipkart.
It has also built two experience stores in Pune that inspire people to bring nature into their homes and aesthetically set these up for better mental health and quality of life. In the last six years, Ugaoo has fulfilled more than a million orders, and aims to produce at least 500,000 plants a month by the end of 2022.
Kunjan thinks this latest investment fits right into the Group’s ethos: “I’m super excited about it. First, it's green, second, it's digital – they sell their plants online – and third it's profitable and growing very nicely year-on-year. The company grows its plants and sells them online, delivering directly to customers’ doorsteps. I truly believe that going green not only means reducing your carbon footprint or switching from carbon black to more sustainable materials, or switching to electric vehicles. It could also mean having more pots and plants in and around your house or around the city as well. I think Ugaoo, in its way, is trying to pursue that mission, and that’s what I like about the brand.”
Ugaoo’s plants are grown in its state-of-the-art greenhouses with help from horticultural experts, to ensure complete control on quality, from planting to dispatch. In addition, the start-up addresses the issue of any potential damage to the plants during transit by using innovative, jelly-filled soil mixes and re-useable sturdy packaging that can withstand heavy load and 8-10 days in transit from nursery to their final destination. It provides customers with service support, to help with the aftercare of the plants, as well.
With today’s consumer preferences moving online, right from tyres to plants, Ugaoo is innovating to build a loyal customer base by ensuring higher levels of satisfaction. What lends Ugaoo an edge over its online peers is that it grows the plants in-house, making a tremendous difference to their quality and to the standardisation of its offerings.
With a rise in plant parenting across age groups and a largely unorganised sector that delivers a subpar offline experience, this category offers significant growth potential. Ugaoo, so far bootstrapped, was growing steadily and profitably on its finances. The new funding aims to accelerate its growth trajectory and help establish the brand as a household name for plants, similar to popular brands in household and kitchen equipment.
We plan to utilise the funds to expand our regional presence with hubs and garden centres in Bengaluru, Delhi, and Kolkata.”
SIDDHANT BHALINGE, FOUNDER - UGAOO
Ugaoo runs a large nursery and two retail stores in Pune, with plans to launch hubs and stores across the country. In a conversation with VCCircle, Siddhant Bhalinge, Founder of Ugaoo said, “We plan to utilise the funds to expand our regional presence with hubs and garden centres in Bengaluru, Delhi, and Kolkata. In addition, we intend to collaborate with international plant companies to introduce a wider range of exotic plants and premium plant care products to the Indian market.”
With these feeder hubs, the company plans to enable same-day delivery in the foreseeable future.
Kunjan adds, “For Ugaoo, the target group starts with young people and doesn’t stop at any one age group. So, I am hopeful that this venture will be very successful. People want to push greenery around them, and this is not just limited to tier-I or metro cities. I can see this business permeate into households in tier-3 and 4 cities as well. Today it’s just indoor plants; tomorrow, we can add outdoor plants, flowers, gardening products and keep widening the addressable products in Ugaoo. Therefore, I am quite bullish in terms of the scope for this start-up.” This is RPG Ventures’ second investment in the D2C (Direct to Consumer) space following its investment in Sleepy Cat, a bedding products business.
Through 2021, the team at RPG Ventures put together a new direction to take its programme forward and the new investments and active pipeline is in the same direction.
Kunjan quips, “Now that we saw sprouts of the re-alignment in vision and some good outcomes in 2021, there’s no stopping us in 2022. It’s just the beginning; we hope we have sown the seeds that will grow quite nicely.”
