Why we invested in Saveo

We recently invested in Saveo, a pharma B2B supply chain startup in India.

It took only 2 zoom calls for us to make an investment decision (actually, we are always like that 😄). Below are a couple of points which made us confident to write a cheque quickly.

Pain Point: Highly fragmented supply chain

Pharma supply chain in India is highly fragmented and it actually ends up with very low customer (=patients) satisfaction. For supply side, each city has 50,000+ selling SKUs produced by 500+ companies. For demand side, India has almost 1 million small pharmacies and people are highly depending on it. In between, there are multiple layers of middlemen, such as CFA, stockists, suppliers, local distributors, etc and they are operated manually /non-digitally. Since the supply chain is such fragmented and inefficient, it ends up with less than 60% prescription fill-rate for patients even in metro cities. This is extremely low if we comparing the number with my home country, prescription fill-rate in Japan is almost 99% even in rural area. This is a huge pain point both for patients and small pharmacies and we felt that can be improved by supply-chain optimization leveraging tech.

Business Model: Managed marketplace works

Saveo has a unique managed marketplace model and we believe that works the best for B2B supply chain play in India.

Saveo’s managed market place (image from website)

This is a pull-based, non-inventory, but highly managed model. We are very much confident on this pull-based managed marketplace model in India based on our learning from ShopKirana, one of our portfolio startups doing B2B supply-chain business in FMCG space. During the past 4 years of ShopKirana journey, we have tested almost all the possible B2B supply-chain model which we can think of, from pure marketplace model to capital heavy full-stack model. And, now we strongly believe that the pull-based managed marketplace model works the best in India since it can produce higher profitability without losing scalability. Actually, we spoke to ShopKirana founders during our evaluation process and got a good feedback on Saveo’s model. It gave us an extra confidence on the model as well (a good feedback from a trusted entrepreneur is always a big plus).

Team: Deep understanding of the industry + strong execution capability

Saveo’s founding team, four young entrepreneurs from IITs, is very strong for building a business in Indian pharma industry.

During our evaluation process, we are very fascinated by the team’s deep understanding of the industry. Vivek gained a deep understanding of the industry by his experience with family/relatives who run multiple businesses in the pharma industry. This is a huge advantage for Saveo since pharma industry is very complex in India and not so many people have such deep understanding (so, we feel the industry complexity itself is a moat). Other three co-founders (Amit, Anurag, and Shivansh)also have massive experience in relevant fields such as tech, operation, and customer acquisition so the team can productize and marketize the deep understanding of the industry by themselves. We got great feedbacks for all of four co-founders from their ex-employers, ex-colleagues, or successful entrepreneurs who know them very well. We believe Saveo team is currently the #1 team for disrupting the pharma industry in India.

Huge pain point, scalable+profitable business model, and a strong founder-market-fit are three pillars for evaluating any seed stage startups for us. Saveo gave us check-marks for all of these three points so we could made our decision quickly (within a few days).

We invested along with very strong investors such as Matrix Partners, RTP Global, India Quotient, and prominent angels. Now Saveo got a great set of supporters. We are so much excited to create a big success together with founders, investors, and all the other stake holders of the company! Onwards and upwards!!

Founder & General Partner, Incubate Fund India (https://www.incubatefund.in/)