For years, Shan Kadavil believed in a simple principle: raise funds only when necessary. As the co-founder and CEO of FreshToHome, an online platform for fresh seafood and meat, he followed this philosophy rigorously. However, 2022 proved to be a turning point, challenging his long-held beliefs.
Back in 2020, FreshToHome secured $121 million in Series C funding. At the time, the market was thriving, and investors were eager to fund high-growth startups. Kadavil remained selective, confident that securing excess capital was unnecessary. This approach continued into 2021, even as competitor Licious achieved unicorn status.
By mid-2022, however, the funding landscape had changed dramatically. When FreshToHome finally sought new investment, the market had cooled significantly. Investors, once focused on rapid expansion, were now prioritizing profitability. FreshToHome, still operating at a loss due to its aggressive growth strategy, faced an uphill battle. Losses had escalated from ₹98 crore in 2020 to ₹393 crore in 2021, making investors cautious.
Recognizing the need for change, Kadavil implemented strategic shifts. Marketing expenses were reevaluated, with a push toward offline retail to reduce customer acquisition costs. The company experimented with premium store formats but quickly adjusted its approach after discovering that customers associated high-end stores with inflated prices. Instead, FreshToHome scaled back on expensive branding and opted for simpler store designs.
Additionally, the company introduced in-store processing to improve efficiency and cut logistics costs. The shift in operations, combined with cost-cutting measures, positioned FreshToHome as a more sustainable business.
Despite the challenges, FreshToHome successfully raised $104 million in Series D funding in early 2023, led by Amazon’s Smbhav Venture Fund. The fundraising process took nine months—longer than any previous round—but ultimately secured support from both new and existing investors.
Reflecting on the experience, Kadavil emphasized adaptability. “You can’t control market conditions, but you can adjust your strategy,” he noted. His takeaway? Timing is critical, but resilience and smart pivots can help navigate even the toughest funding climates.
