◊ By Pure & Eco India

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Pune-based A2 milk and organic food brand, Humpy A2 (the company is called The Organic Carbon), which was founded in 2017 by Malvika Gaekwad and Jaywant Patil, on January 26, received a promise of Rs 1 crore in funding on the television programme, Shark Tank India, which airs on weekdays at 9 pm on Sony TV and Sony LIV.

The duo, along with Co Founder and Chief Business Officer, Vishal Chaudhari, featured in episode 28 of Season 1 of the show.

The promoters had asked the ‘sharks’ for Rs 75 lac in return for 4% equity but closed the deal at Rs 1 crore funding in return for 15% of their business, at a 6.67-crore valuation.

The funding will be equally contributed by Peyush Bansal, Co Founder, Lenskart; Vineeta Singh, CEO, Sugar Cosmetics; and Ghazal Alagh, Co Founder, Mama Earth, with a contribution of Rs 33.33 lac each for 5% equity each.

Humpy A2 primarily offers certified A2 milk and A2 milk products like ghee, cheese, paneer, curd and butter made of A2 milk. But the brand has diversified into certified organic staples and groceries as well, offering organic rice, flour, spices, etc. Currently, the brand caters for Pune only.

Humpy A2 claims to test its A2 milk against 120 parameters and boasts a 93% customer retention rate. The brand sources its milk from the landless Bharwad community, which herds livestock, mainly indigenous Gir cows. The brand has been christened ‘Humpy A2’ after the hump on the Gir cow’s back.

In its first financial year, the brand clocked revenue of Rs 65 lac, and expects to close FY 21-22 with Rs 4 crore.

The owners divulged on Shark Tank that on average the brand enjoys a gross margin of 44%, with a 65% gross margin in its non-milk products and 42% in dairy items.

Whereas, till now A2 milk has been Humpy A2’s flagship product, contributing to 80% of its revenue, the team envisages laying more emphasis on its non-dairy items in the next 2-5 years in pursuit of wider margins.

“Milk is our hero product. It is getting us subscriptions. However, we enjoy better margins in our other products. Therefore, in the next 2-5 years, we see 60% of our revenue coming from our non-dairy products and 40% from milk and related products,” said Chaudhari, to the sharks, who expressed concern over the slimmer margins delivered by dairy products and the fact that dairy made up 80% of Humpy A2’s revenue.

Anupam Mittal, the owner of Shaadi.com opted out for fear that the brand was headed towards expansion of its non milk category, thereby diluting its core identity — that of being an A2 milk brand.

Humpy A2 will use the investment to expand to Bengaluru, Ahmedabad, Chennai and Delhi NCR and says it has already located farmer networks in these regions to allow for seamless amplification of operations.