We aim to reach a million subscribers in next 5-yrs: DrinkPrime founder & CEO
Water is an important theme around which many entities have built up their business models. Despite India’s economic growth in last two decades, the provision of clean drinking water remains a far cry.
Water is an important theme around which many entities have built up their business models. Despite India's economic growth in last two decades, the provision of clean drinking water remains a far cry. In this context, water purifier industry is witnessing multi-fold growth in recent years. However, high upfront investment stands as a barrier for people to use water purifier at their homes. To resolve this problem, Bengaluru-based DrinkPrime has developed a unique subscription-based model where users can install the purifier and only pay the monthly subscription fee to the company as per their usage (number of litres consumed). Backed by marquee investors like Sequoia Surge, and Omidyar Network India, DrinkPrime's user-base now stands at more than 25,000 households. In a conversation with Bizz Buzz, company's founder & CEO, Vijender Reddy Muthyala said that the company plans to reach 10 cities in coming years with an aim to reach a million subscribers in next five years. The company is also in the process of raising funds of more than $10 million as part of series A round in coming months
What is the unique selling proposition of DrinkPrime in an intensively competitive water purifier market? How is the business during this pandemic period?
Despite Covid-related disruptions, we are rapidly scaling up. We have witnessed around 3 times growth from the first wave of the pandemic till the second wave.
Let me give a context before explaining our unique selling proposition. The water purifier industry has a penetration rate of around 10 per cent in India, where penetration of television in India is more than 70 per cent. The issue related to water purifier industry is the high upfront cost that users have to incur. That is the reason why we entered into the subscription model in which users have to pay based on their usage. We also realized that each area has its own water quality. In traditional model, 'one size fits all' kind of product is provided to all customers. The current technology used by the purifier industry comes with the assumption that any purifier will serve the purpose. What we do is that for each customer, we take into account the water quality of that area and customize & personalize the purifier. For example, if there is no need of RO in an area, we don't put an RO. If it is a highly contaminated area, we put an RO. Basically, we deploy the technology as per the requirement of the consumer and he has to pay as per his usage. In this way, we are very different from traditional purifier providing companies.
What is the motivation behind starting this venture on water?
Water as a theme is very important for India. We started this business due to the problems faced by us. Usually, people rely on water cans in metro cities, which is completely unorganized. The quality of water is always questionable. So, it's not that there was a market or there was demand, we started this to solve a personal problem, which was faced by many. The idea behind our subscription model is that people should use it like electricity. Users only pay for the units they use. The same concept is used here where people only pay for the litres for used. We have a clear vision of providing clean drinking water. For the last seven years, we are very much focused and dedicated on providing clean drinking water to people.
How many cities are you currently operating and how many subscribers are using your solution?
We are currently operating in Bengaluru and Hyderabad. We have more than 25,000 households, which is equivalent to one lakh subscribers.
Is the technology completely proprietary? How do you manufacture the hardware components for the purifier?
The technology is owned by it. Whatever moulds are required for manufacturing, we get it from our contract manufacturer. We have invested in designing of the moulds for the water purifier. Then, we give it to the contract manufacturers across India. Our product also has a small IoT (Internet of Things) element, we import those chips from outside. Otherwise, more than 90 per cent of our product is made in India.
The business model of DrinkPrime requires many support staff who will visit customers' houses and install the purifiers. How do you manage that kind of manpower as a startup?
We are a technology-focussed startup as we both the founders come from tech background. So, we have designed a system where technology is used to the fullest. We have developed a system where our manpower is utilized very optimally. Our technology platform automates a lot of operational matters.
Are you adequately funded for your future business growth? Do you have any fundraising plans?
We are backed by marquee investors like Sequoia Surge, and Omidyar Network India. We have already raised Rs21 crore from investors in a pre-series A round. We have so far raised more than $8 million comprising both debt and equity. We are in the process of raising a series A round which is likely to be more than $10 million. These VCs like our business model and therefore, we have marquee investors funding us.
Is DrinkPrime open to partner with any established player in the purifier industry? What are your thoughts on this aspect?
We are open to partnership with entities which fulfil our vision of providing clean drinking water to everyone. So, it could be government or any other bigger organisation.
What are your growth plans for coming years in terms of subscribers and cities? What are your breakeven plans?
In the next two years, we are looking to reach 10 more cities across India. We want to reach a million subscribers in the next five years. As far as being breakeven is concerned, we are about to reach that point. We are now rapidly scaling up and we have got the best team who can support us in this journey. So, our expenses are a little high. In the next 6-8 months, we are hopeful to be breakeven.