Retail biz will give us brand identity and recall: Infra.Market co-founder

Infra.Market's co-founder talks about the company's future plans, including retail ambitions, plans to look at the capital markets and more

Infra.Market, a business-to-business (B2B) platform for construction material, came into the limelight early this month after it raised $125 million from Tiger Global at a post-funding valuation of $2.5 billion. This was hardly five months after the company became a unicorn. Infra.Market’s co-founder Aaditya Sharda talks about the firm’s future plans including retail ambitions, and proposed entry into the capital markets, in an interview with Shine Jacob. Edited excerpts:

1. What are your plans after the fresh round of fundraising?

From my angle, I look at it as three different projects. One is our standard B2B business, which is akin to being on autopilot. The next big thing we're betting upon is the retail story. In the western Indian market, especially Maharashtra, we have a distribution network of around 600 now. Our next step is to hit the mark of 2,000 distributors in the west and south together.

I don’t want to be only known as a B2B company. We want to be there on the project management side, retail side, and eventually on the e-commerce side of the business. We are spreading our wings on the retail side a lot because our procurement and supply chain is sorted to a great level since we are in B2B, which we want to capitalise on.

The next big thing we are betting on is the private label part. An asset-light manufacturing company is how we look at ourselves. Today, concrete is completely a private label, we no longer sell other brands. Volume solutions are also completely private-labeled. Eventually, we are looking at eight product categories, where we will be selling our own brands. These include concrete, walling solutions, steel, tiles, bath fittings, electricals, paint, and plumbing. B2C will give us brand identity and recall. We want our presence felt.

2. How are you working towards this asset-light manufacturing model?

Inside the company, there are different teams working on each of these projects, which is what is helping our growth. We don’t want to put our own manufacturing units. What we are going to do is tap small and medium enterprises (SMEs) that are under utilised, with not much sales. We will tie up with these under-utilised units so that they can opt for full capacity utilisation. This becomes a win-win situation for both of us, we don’t have to put up the entire factory set up and will get a ready-made product line. For SMEs, it will be better utilisation of their factories that will help them reduce the operation cost. I do not just want to create a demand by going for the aggregator model, but also would like to fulfill that demand through our private label.

As of now, it will be completely under the Infra.market brand. Going forward, if the demand calls for it or we acquire some existing brands in these segments, we may think about a separate brand name.

3. How come you are present only in 10 states and focusing more on south India?

We have a pan-India presence–we are in the National Capital Region (NCR), Chandigarh, Kolkata, Odisha and about to start in Indore and Lucknow too. But our larger focus is on the west and south, since we started in these markets and our supply chain is much better. The south also has a cluster of top cities coming up, but in the north, all major cities are physically far away from each other. Hence, the proximity between various cities helped us develop the supply chain. In addition, infrastructure, retail potential and high tech adoption in the region are what we are looking at as a test market.

4. What was the impact of Covid on your business?

Our business is growing 4-5 times a year. In March 2020 we had posted a turnover of Rs 350 crore and by March 2021 it touched Rs 1,100 crore. There was a spurt in the volume after the first wave. We were focusing a lot on supply chain.

We will maintain profitability. Our first milestone is to achieve $1 billion in revenue by March 2022 and $3 billion by March 2023. We are targeting 5x growth year-on-year. We would like to look at capital markets by 2024, once our business grows more. It is a milestone that we want to achieve.

5. What are your investment plans going ahead?

We are going to keep adding to the leadership level highly. Will go for massive hiring at various product categories. We are also going to spend on technology built up. We have constantly kept capital for acquisitions. Inorganic will be part of it as we have to build eight product categories at a national level, building wholesale, retail and e-commerce. In addition, having in-house logistics and warehousing also definitely need inorganic growth. There are a lot of stressed assets available, we are looking at acquisitions on all the product categories.

6. You mentioned project management. What will the nature of this business be like?

Servicing and fulfillment are something that we are looking at. We want to build technologies that can help contractors and EPC companies. I want to be a tech-enabled platform for them integrated with our current portfolio of products. At present, we have around 700 staff strength and will close the year with around 1,000 people.