With the emergence of health issues in recent years, most people have started becoming proactive to improve their immune system and diet, rather than being reactive at a later stage when the damage has already been done. Even most doctors agree that if from an early age, we somehow get access to a preservative-free, natural source of nutrients, it might significantly boost our health in the long-run. Our guest Aarti Gill’s OZiva is India’s leading Clean, Plant Based Wellness brand. OZiva was started back in 2016 and since then the company has scaled significantly with a large base of repeat customers. During the episode, Aarti talks about how she pivoted from her first venture to OZiva, what are the major challenges she has encountered during her journey and much more. Notes – 05:38 – Initial intro about OZiva 08:40 – High-level metrics around customers and revenue 09:44 – Building an Omni-channel brand v/s a D2C brand 11:26 – Early Education & Career prior to OZiva 14:14 – Meeting her co-founder and their first venture 18:35 – Deciding the first 4 products 21:14 – Market demand of OZiva’s Prime membership 22:26 – Challenges during the early years of OZiva 24:38 – Building a 20 Cr+ revenue from 2016 to 2020 26:53 – Building online & offline distribution channels 28:03 – Nuances while building distribution channels 30:10 – Rapid scale of 5x within a year 31:37 – Ensuring repeat purchase by customers 36:46 – Funding interest while growing from 0 to 20 Cr+ 38:45 – Mental model of self-evaluating during each funding rounds 40:10 – Deepika Padukone as a brand ambassador 42:44 – Framework behind brand positioning campaigns 44:37 – Things which didn’t work out & learnings 46:19 – Why build new categories apart from nutrition Read the full transcript here: Aarti 0:02 One of the things that we said and why we decided to partner with Deepika was also that we believe in holistic health. And we think that’s the way that we’ve always talked about with our consumers, because it’s not just about your body. It’s also about your mind. If you look at somebody who has been very vocal over the last three, four years, a few years about, entirely about mental health, also, she’s a great example of physical health in general, I think that predominantly was the reason that we said, okay, that she’s the right person to partner with and could represent the brand values or ethos, and consumers have a lot of things that we can learn, in general, from the lifestyle that she’s adopted. I think the gear change from not investing in brand building to deciding to invest in brand building was also a call, which as a company, you need to take certain bets. Not all your experiments will do wonders. But eventually, as a startup, if you don’t experiment, I don’t think you’re doing the right thing, because there have to be experiments. Some of them could be large scale experiments. Some of them could be, say, experiments on a smaller scale, but it’s important to keep doing those investments. And for us, we were fortunate enough that that partnership has actually done really well for us as a brand, because we’ve done the brand awareness studies or the brand upliftment studies, which have worked really well in general that, we now place right next to the brands that have been built over the last 100 or 50 years. What do the consumers say, for example, we’ve done these studies right next to Horlicks, Protein x, Himalaya, OZiva is coming as one of the trustworthy brands, which has happened over the last four or five years and it’s an important thing. And as we look at the next decade, we believe that there’s a lot of things that we can do in India for the consumers while we’re solving for health. Siddhartha 2:13 Dear listeners, before we dive further into the podcast, I would like to thank our partners, Prime Venture Partners. Prime is the first institutional check in category creating tech startups, like Mygate, Niyo, Dozee and Mfine. Prime is now investing out of its fourth Fund, which is more than 100 million dollars. Today, I have with me Sanjay Swami, Managing Partner, Prime Venture Partners, Sanjay, congratulations on the 10th anniversary of prime. And do let us know how the next 10 years of the Indian startup ecosystem will be like. Sanjay 2:51 Thanks to Siddhartha for having us on the show, the last 10 years has just been an amazing ride in India, and it has sort of started getting exponentially more exciting as days go by, and clearly you’re in a podcast is itself an example of that. But what we’re seeing in India are the benefits of three big trends that have been foundationally laid over the last 10 years. The first one was Aadhaar, India stack and of course, UPI which has made movement of money, friction free and basically free and in real time. The second is, smartphone and internet penetration along with 4g, that is now pervasive across the country. And the third is the entrepreneurial spirit of India, as well as the aspirational youth that we have in India, that has created markets of extreme depth in India itself. This is something that was not there10 years ago, getting to 5-10 million of revenue was itself a big achievement. But now we’re seeing that happening in 12 to 18 months, in some cases. Having said that, I think we’re only getting started, the best is yet to come. And what excites us, as investors or as early stage entrepreneurs, ourselves, is really the massive opportunity. Because what we’re seeing in India is not something that’s been seen in the rest of the world, the western model, the Chinese models, the Israeli models are not what’s going to solve India’s problems. And the entrepreneurs in India have a unique opportunity to get down here, and just focus on solving India’s problems first, which may very well be solutions for other parts of the world. And we’re seeing some of that starting to happen. And that’s where we think there is a spectacular opportunity here. So clearly for us and for this ecosystem, we are off to a great start but the best is ahead of us. Siddhartha 4:42 So listeners let’s dive straight into this week’s podcast. Today I have with me Aarti Gill, co-founder of OZiva, OZiva is a plant based completely clean wellness and nutrition brand. Aarti started her entrepreneurial journey in 2014 timeframe, along with a co-founder Mihir and at that point of time, they wanted to build something in healthcare. They started with services and soon they realized that the end solution for services was products, nutritional products, and they couldn’t find any products which could satisfy their high bar on what they wanted to deliver to the consumer. So that led them to start OZiva, a completely clean plant based nutrition brand. And now OZiva has ventured into other aspects also. Welcome Aarti to the podcast. Aarti 5:35 Thanks Siddhartha. It’s great to be here. Unknown Speaker 5:37 Aarti, would love to know from you, or to set the context for the audience: what’s OZiva, how big the brand is today in terms of revenue in terms of number of consumers? How many SKUs are there of the brand, and which are some of the top products that are very well known in the market? Aarti 5:56 So you summed it up really nicely Siddhartha, we started with nutrition as a brand OZiva is one of India’s leading clean and plant based nutrition brands. And as we move forward, we want to be the leading players in the consumer health segment. And the journey has been with a lot of failures as well as learnings over the last five, six years. The way we look at it is over the last few years, we have served more than 2.5 million people. And we’ve impacted their lives in some way. And we’ve helped them live a much better and a healthier kind of lifestyle. We’ve grown and today we are at between 150 to 180 CR is what we clock on the revenues, we have grown at 140% CAGR over the last three years. And then when I talk about some of the reasons why this growth has happened, or something that’s very unique to us is, if I talk about the word O in OZiva, it stands for originality. So it’s something that reminds us day in day out that we need to keep innovating. And innovation has been another one of the core principles or one of the core pillars of the brand. And what reflects in some of our products as well are the top products like protein & herbs women is one of our top products, which is a complete health drink, which provides macronutrients, micronutrients, at the same time it has a lot of herbal extracts, which help in hormonal balance. One of the important things that we realized through our consultation journey two years back, in the first two years of starting this company was that a lot of women had PCOS, or had PCOS. And in 2013, we realized that there was no product or a solution for that. And that’s why Protein & herbs women came as a complete solution to solve a nutrient deficiency as well as hormonal balance. The other products that stand on top, say, for skin health are hair vitamins, or biotin that are plant derived, or collagen builders which is predominantly again, derived from a plant based source. Today we’ve filed patterns and we have IP for some of these newer ingredients that we have derived, Whether it being calcium from a plant source, or iron from a plant source. And I think those would be our top three, four products. And we’ve invested a lot in r&d over the last few years. Siddhartha 8:39 So Aarti before we dive deep into the journey of yours and OZiva, could you share some high level numbers with our audience on what’s the revenue like how many consumers have used OZiva till now? And how has the journey of year on year growth rate been? Aarti 8:56 so Siddhartha, today we are predominantly sitting at between 150-280 CR. Our growth for the last three years, we’ve grown at 140% CAGR and I think over the last three or four years, 2.5 million people or 25 lakh people have used our products, which in itself is, I think health is much difficult kind of or a new space to be operating in India. And for me, I think one thing that has led to this growth also is because, one of the core pillars that we say in the company is the product. Because if the product is great, I think all other things can be built around it. So that’s been the journey so far. Siddhartha 9:43 And Aarti you’ve decided to build an omni channel brand rather than a d2c brand throughout the lifetime of the company. What has been the reason for that, because Omni channels are much harder. You need distribution, armies of Unilever or Procter and gamble to crack that. Aarti 10:01 No, I think it’s a great question. Actually I’ll tell you how the digital first approach also happened because when we launched the brand, we actually went offline initially and we were rejected by almost 90% of the retailers out there that we’ll keep your product when there will be demand, which is a typical story Even today. I think that’s where we got rejected by a lot of other channels where we said like, the digital is a channel that was doing well that we understood also well, we said let’s focus on that first. But I think as we grow the brand, important thing for anybody who’s building a business is that you need to be present where the consumers are because even today, I look at my own d2c as a fulfillment channel, e-commerce as a fulfillment channel, and also chemist as a fulfillment channel. If a person wants to buy it from a nearby chemist, he can buy it, if he wants to buy from Amazon or Flipkart, the product should be available there. I think the purpose of going to an omni channel is that you should be basically solving for what consumers are asking for. I think that’s been the goal from day one. Having said that, digital first approach is what we use, but over the last one year, I think the target has been to grow the offline retail outlets as well. Siddhartha 11:23 Let’s go back and start with your roots. You are an engineer by profession, and you did your bachelor’s from IIT Roorkee. So I would love to know, where did you grow up, what’s your family background like, then went to INSEAD for MBA, how decisions came up and what made you come back to India? Aarti 11:45 I’m actually a lot inspired by my mother. My mother is a healthcare professional, she used to work with the Punjab government in the healthcare department. Now retired. And growing up, I saw her serving and helping a lot of patients going out of her way to help a lot of patients. And I remember when she used to come back home and discuss with my father, he used to say this one thing only, a lot of diseases that people face today could be avoided, only if they had a better lifestyle. And that’s one of the constant questions that stuck to me, forever was that, can I build something? Can I actually do something which can help people just live healthier. I think it is very simple. I was good at math. So I went to do my engineering at IIT Roorkee, this is what used to happen earlier, if you are good at math then you can go for engineering. And I think, thereafter, I joined a startup and I was in Bangalore for a couple of years, and then moved to INSEAD to do my masters. And I think, after living outside India, I saw that the lifestyle of people and the kind of food options, the kind of things that they do for their health, it’s very different as compared to obviously back in India, and I realize it’s a huge potential, because somewhere down the line, I think India will, or the people in the country will take that journey. And if I can solve it and build it, I wanted to be here, and I wanted to do that. And that was a decision that made me come back to India. There were two segments that have always interested me: One was preventive health care or wellness as a space. And the second is the impact on the social sector. And I’ve also briefly worked with a private equity fund in the impact investment space. And the beauty of health is that while you’re building and solving for health at the same time, you create something that has a lot of social impact, because today, I believe one of the basic fundamental rights of a consumer or a person is health. And I think that’s what brings together the beauty of both the things that I’m interested in, hence, I think, came back to India. But as we speak, more about it, obviously there have been a lot of pivots in this journey, a lot of learning. And where we are today is after a lot of failures as well as learning. Siddhartha 14:14 So would like to now dive deep into that, How did you meet your co-founder? And how did you guys decided to start your first venture which was in services space, Aarti 14:23 Siddhartha As I say, when an entrepreneur starts, I think most of us have a beautiful business plan on paper and even I had one, there was this plan on paper. Everything was looking, all the numbers because if you change one formula, numbers in excel also change. And that was something that I came back to. And it was into services play where we were doing consultations, we were doing diet consultations, my co-founder, Mihir, both of us Met through a common friend, while both of us were into running and he is actually a far much better runner and he’s into marathon and running training. So one of the other services that we had on the platform was marathon training. So when we were building the services, kind of a platform where we were getting coaching around nutrition marathon or other fields within the wellness, we realized and our consumers came back to us and said that while this has a lot of helpful information and guidance, but it’s very difficult for me to actually do this, because if a nutritionist has recommended a diet plan, the consumer came back and said, from 9-7 I have a very hectic lifestyle. So it’s very difficult for me to incorporate a lot of suggestions that are given. And I think that was the time when we started thinking, can we actually build a recommendation engine. Coming from a tech background, it was always trying to think about how we can solve it via just technology and that’s where Mihir comes in and he’s from a biotechnology background. So he’s somebody who understands science, food labels, food ingredients, a lot much better at that time, the knee. And which is where, when we picked up any product, he’s like, No, this we can’t recommend. And at the end of the entire exercise, we realized that, almost all products were rejected, and which is what made made us think that if there’s something that doesn’t exist in India, which is absolutely clean, which doesn’t have these ingredients that we don’t believe in, like maltodextrins, SLP in sucralose. So can we actually create a brand or a product line that can give people the right nutrition without worrying about a lot of these ingredients that can potentially have side effects. And that was the genesis or the thought behind? OZiva, we worked for almost like one one and a half years on what the brand name would be, what the philosophy of the brand is, like, what the product formulations could be. And 2016 is when we launched OZiva with four products, and we haven’t looked back since then. So we’ve just grown in the space of nutrition as well as wellness. And further talking more about that in, how we actually evolved in that journey. We realized out of the four products, one of them actually really worked well. And it resonated with our consumers. And I think, predominantly the first TG that kind of liked the products was women between 25 to 35 age Group, Because it was the first health drink which had the macronutrients and a lot of herbal extracts, which helped you in balancing hormones, which at that time we realized that PCOS is a growing concern in the country today. Because a lot of women came on our platform and consulted with us, one out of four said, I have PCOS. And we realize that there is no solution that is talking to them. And I think that’s the first health that we created. Over a period of time we launched obviously, we just listened to our consumers, we said, what are they asking for? What are the problems or the gaps that we need to solve for, and we kept on launching products for them. So we evolved from Women’s Health to beauty and skin and hair nutrition, because we said that even if you go to a doctor or a college, you’re recommended a lot of these micronutrients. These are not medicines, these are supplements. But people take it thinking they are medicines. That is where we said can we actually create ingredients or nutrients that are derived from plant sources? And that was the skin and hair nutrition coming up, we’ve expanded our men’s health portfolio. So I think that’s been a journey over the last four years. Siddhartha 18:36 How did you decide what were your first four products? And then my next question would be which was the product that worked out really well among the four and why do you think is the reason for that? Aarti 18:47 We launched four health drinks initially, one was protein & herbs men one was protein & herbs women. And today also it’s one of the top sellers for us. It is in our top 10 product list, both these two products having said that, I think because it was built based on the consumer insight, as I said that, it was the first health drink which had no ingredients or artificial ingredients in general. And also it was not just providing protein which is a major macronutrient, it also had micronutrients all at the same time. As I said earlier, it had a lot of herbal extracts which helped in balancing hormones and I think that’s where the first product worked very well, our NPS of the product was very high, it was the protein and herbs women. Also globally, what we realized was that clean eating as a concept is a lot first adopted by women and in the global or in the western market as well. Which is where we saw the same kind of trend in India as well. More health conscious, looking at the food labels or ingredients, and okay to pay a bit premium because the products were not the cheapest one. I think its value for money is what we believe in. And I think that was the first product that came up. And I think gradually over the period of time obviously, we learned from that consumer, and we had zero FMCG experience. We keep joking internally, because the first product that we launched was we put everything that is good for a human body in one product and the product pricing turned out to be, say 1000 rupees plus, so it is at 1400 rupees. And that’s where we realized that for every price point, there is a certain kind of TG or people that can afford that product. And thereafter the product lines that we built with each problem became a separate solution, rather than trying to merge these three four kinds of problems together, because the price points became too expensive. So hence, our next price points came at around 800 to 900. The next price points came up at 500-600. So one of the important learnings for our focus has been, if we want 100 million people to be adopting and using our products, how do we actually keep innovating and bring the price points to a level that consumers can put it as a part of their monthly basket. I think that’s been the thought process. Siddhartha 21:14 And the first two years of the services business, do they still continue to be a part of OZiva? Aarti 21:19 So yes, so what we’ve done is interesting because we built this platform, we knew that there’s a value in the service. Also, if I look at health or wellness as a space, people don’t buy boxes. People want somebody that they can trust that a person or a brand can help them solve for their health. So for the entire service, we move to the backend, and it’s called today OZiva prime, where a prime customer can get unlimited access to your nutritionist and nutritionist help them with lifestyle coaching, as well as guidance around what are the other changes that they need to make in their life. Because I don’t think it’s about you eat it and everything gets solved. These are not magic pills or magic solutions ideally and it’s not a medicine, as I say. So there are a lot of other changes that a consumer needs to make in their life, and which is where the coaches help them make that transition to help them. And I think that’s the service today, which we’ve focused on how we do it and it has helped us to improve our retention rates and our LTVs. And we move that service to the backend. Siddhartha 22:27 And if you could share during the first two years, what were the challenges faced? Did you approach VCs during that point of time when you were only building services and how did that journey pan out? Aarti 22:40 So I think we raised almost like 15 lakhs 20 lakh angel investment. When we began the initial journey of the fit circle, Within six months, we realized that the money is getting over, it’s difficult. And also, the business model was raising questions for us about whether we can grow it or not. And both Mihir and I believe that we should take capital when our business problems are solved and we have product market fit, because that’s when you will be able to do justice to that capital. Otherwise, it’s just going to go, it would be wasted. And capital also comes with a lot of expectations around growth. So I don’t think so product market fit was there, and which is where we decided that there’s no point of raising capital now, and then we pooled in our own internal family, and we put in more money into the business and we’ve done a lot of different kinds of odd kind of works to ensure that we sustain those two years initially, and thereafter, after two years, we decided to go for debt. So once Ziva was launched, we raised 20 lakh. 10 lakh from SBI and 10 lakh from HDFC. We keep joking internally, if we had raised equity at that time, its ROI would have been a lot. But ideally we went ahead with debt. And I think for the first two years after OZiva, we were consumer funded. So consumers believed in our products, they were buying our products. So we were growing by reinvesting internal accruals into the business. I think that was a growth. And I think thereafter, when matrix came in 2020, like two years back, it was the first institutional round thereafter, I think in 2021 last year, Eight Roads came in and we partnered with them. So it’s been a journey from debt first to 10 equity. Siddhartha 24:39 And when matrix came in at that point of time, the revenue was 20 crores. So how did you build that revenue from 2016 to 2020, first starting with four products and then if you could share how many SKUs you launched during that course of time. Aarti 24:57 I think for us even today, 70% of our revenues come from top 10-12 products. Because it’s all a sub product to me, it’s almost like each product is like a sub brand, for example, how Liv.52 is for Himalaya. For me HerBalance PCOS is a similar kind of a product for PCOS, which is a 550 Crore market. Ideally, I think the first three, four years, we were understanding digital also because it was a new insight. We also had rejections, as I was told by the retail outlets. We went to the retail centers, they said we can’t keep this, so during the first few years, that was a learning that was happening. And we were working, the first office was from my home. There was this, if you’ve ever lived in Mumbai, Mumbai has the small houses and imagine within that small house, a hall was converted into our office space, So we were operating with five, six people working from my home in the initial two, three years, through the limited capital that we had, we weren’t growing based on that and we were profitable in the first obviously, few years of our initial journey. So that’s been the case so far, like Journey of the first two years. Reinvesting listening to the consumers. What is the same consumer asking for? Similar consumers asked for that because of the concept, as in the first few years we focused on women as a TG. And it was a concept of I want to feel good, I want to look good. And the whole concept of hair and skin nutrition came from there. So we launched that portfolio. And then we decided, can we actually expedite this journey because we believe now that there is a strong product market fit that exists. Our ethos are very strong, we’ve not compromised on them. And I think that’s the time we decided to scale up. Siddhartha 26:53 And if you could share, how did you build your distribution channels, what were the investments required in both online and offline distribution channels, during the initial four to five building years. Aarti 27:04 We’ve been very strong, digital first for the first five years of our journey as well. And where the distribution was happening mainly through our own platform, which was contributing around 40-45, or 50% of our sales. And the rest was coming from E-commerce platforms. But one of the things that we used to see was that even if people are buying on the E-commerce platforms they were searching for, say 90% of them are searching for OZiva brand name keywords. So people are looking for OZiva HerBalance, OZiva protein. I think those were the kind of, we were leveraging all these distribution platforms as a fulfillment partner in general. And I think the next growth where we are growing is offline retail. A very traditional model of Superstock is distributors, retailers and investing in a lot of trade marketing and BTL. Siddhartha 28:03 And if you could share some nuances of building the both channels, were you heavily reliant on Facebook ads, Google ads during the initial years to get traffic on your website or how did you go about that? And similarly, for the offline part. Aarti 28:18 I think that my learning has been that marketing strategy should keep evolving. And I think every two years or I think today, things are moving very fast. So there needs to be an evolution every two years. So there was a time when Facebook and Google were extremely cheap, when you go to Marketing. So I think a lot of brands would have leveraged that as a source there also a lot of investment into content marketing, Collaboration with different people, different stakeholders, this is something I would say two years back, if you asked me Would the same thing work today for a brand which is say 20 crores. And if they use the same strategy, I would say it might not, because there is an evolution that has happened: the pricings have become much more expensive for certain channels. So as a marketeer, the important thing is to understand what is the new thing that you can jump on first and figure out that new source before the other people replicate the same strategy? Because then the ROI of that strategy will decrease. Another thing I think there was a gradual shift for us between people who come from D to C background will understand this is performance marketing and brand marketing spends, because I think in the initial days, it’s a lot skewed towards performance marketing. And as the company or the stage involves a lot of chips go towards building that brand and the power of the brand and investing in that is much higher as compared to doing performance marketing, and hence there is a gradual shift. Having said that, from day zero, should you do brand marketing? I think I still have questions on that. So it has to be a journey. Siddhartha 30:10 And you’re able to scale very rapidly from 20 crores after raising the first round of metrics to when you raised around 12 million rounds from Eight Roads. At that point of time, we were at 100 crores of revenue, what brought that rapid scale of 5x, within a year’s span of time? Aarti 30:29 I think two things which are there, because imagine that it was also the first institutional raise where we did have the luxury to invest into the business, which we didn’t have, obviously the first three, four years. And things that were working well for us, we just ensured that we invested far more higher on those higher ROI channels or strategies. I think that’s one of the things Another thing, if you remember that has happened was the last two years have been very different. There has been an accelerated adoption of digital in the last two years, there have also been an inclination towards health that has increased because of COVID. I think during the first impact, we’ve seen the baseline going up in general, and then baseline while it has reduced to a certain extent. So I have known brands which grew 5x, but stay even at the baseline going down, they would still be 2x of their initial numbers. And hence, I think that’s also an important macroeconomic change that has happened to how consumers are thinking or are they willing to invest in their health. So that’s also one of the reasons Siddhartha 31:37 How do you ensure repeat purchases by consumers? Aarti 31:42 I don’t think so. A lot of companies I have spoken to have different brands at scale up level or even MNCs that exist within the adult nutrition space. And dark nutrition for me is one of the toughest categories in the country. I think for kids nutrition, there are a lot of brands, but there’s another thing, when we are between 30s and 50s, that’s the least time when people are thinking about their health, they will start thinking about a lot of other things, which now is changing for good. But also 55 plus then when you start getting those diseases or the doctor recommends you, you come back and then take your products very religiously kind of a story. And I think the age group between I would say 25 to 45 or 50, which is where the retention rates are not that great. Where you even scaled up brands have seen a maximum of two boxes in a year being picked up. The way we cater to it is we said that we have a lot of categories that we operate in, one of the reasons for that also is because people buy these products as a problem solution sometimes and at a given time say for example for one or two months, you might be thinking about here or as a challenge, then after three months they might thinking about their gut health or your bone health. So as a brand ,they bought into the brand no matter when it started trusting the brand if their problem one was solved, and if they are now thinking about the problem two, they should come back to me, is the way we look and solve for it which is predominantly, one word for that is cross selling that is there. Another way that we have solved it is OZiva prime, which we spoke about because this is the place where we realize people need a lot of nudges, Inspirations, stories, to be on that journey. And I think that’s where we’ve been investing in and we will continue investing in that. Siddhartha 33:38 And today Aarti, what’s the focus of OZiva, let’s say from 180 crores to 500 crores, What is required to take you there? Aarti 33:50 Focus is predominantly from a leading nutrition brand in the country to become a leading consumer health brand in the country. I think that’s how we look at it. For me my competition is pharma players. I think a lot of this market today is by pharma players. We don’t have a billion dollars central in the country today. When there are a lot of scaled up brands globally that exist, it’s a non branded play. For example, you would go to a pharmacy you would say Give me vitamin D, now you don’t check for the veg, non-veg symbol on Vitamin D, people forget where did that D come from, they don’t talk about its sourcing, they don’t talk about it’s bioavailability. And I think those are the things that we are investing in as a company, how do we create new innovative products because I think in the last 10 years, there has been zero innovation in the OTC space. Either people have started focusing on advanced diseases like cancer and preparing drugs for that which is one strategy or in the OTC is just changing the package label, change some micronutrients and a new product is formed. Because your channel is fixed, you’ve to give margin, and then the product starts flowing in that margin. I think that’s where we believe that the first thing that you have to do is come up with new products. So for example, we filed a pattern for how you derive calcium from a plant source. How do you derive iron from a plant source. We’re talking about bioavailability absorption of these ingredients. Because the simple thing is in the place of 4000 mcg, give 8000 mcg. But it’s not about the quantity that you consume, it’s about whether it gets absorbed in your body or not. And I think that’s where we are doing more consumer trials, real world evidence studies. And the first thing is to keep innovating. Second, how do we grow to that number? I think it would be predominantly a play of growing the channels that we have. I think we’ll keep scaling the digital, but at the same time, there are different things that we are doing. We saw that 20% of people drop out because they go to a SCP and they ask if I can take it regularly or not. And the SCP says I’m not sure. So we realized, well we’ve done a lot of consumer awareness. But we’ve not talked about science with SCPs. And that’s one of the things that we would be continuing to invest in so that we don’t need a prescription. But say if somebody does a second check, they should not say that I’m not aware. I think that’s how we’re looking at it. The demand should be still generated digitally. I think that is the second channel. And the third obviously is, in short your offline stores and outreach expands in general. Those are the ways we look at it. Siddhartha 36:40 And for our listeners, SCPs are healthcare providers, like doctors, nutritionists? Aarti 36:44 Healthcare professionals, yes. Siddhartha 36:46 And the very interesting part is when you were growing from 0 to 20 crores, did you get any funding options from the market? Or was it a choice or was it an accident that you took that journey? Aarti 37:02 So, Siddhartha Good question. In hindsight we do very little marketing, we were working well from our little space and we were innovating, but I realize very few people knew about us as a company that is doing this work. And I remember the first time we raised some money, Titan came in. Titan was the first fund to actually identify us, which was by Kunal and Rohit, when they first discovered us then they said, you’re building a rock solid kind of a thing. You’ve been profitable, you have these new kinds of products that you’ve been building. And I think from there on, the VC community is very small. So I think that’s when they discovered that there is something called OZiva, which is doing some good work in Mumbai. And I think that’s how the journey started. Siddhartha 38:08 And when was this Titan round, when did this Titan round happen? Aarti 38:10 We raised almost two to three months before the Matrix came in. So I think in India there are many such businesses who are doing well but they aren’t discovered, they don’t put the efforts to reach out themselves, that’s also a mistake, I think people should do. Do not take that as a learning from us but we were so focused on building the right product and innovating on some of these new things that we said, let’s keep building like this. And we decided that we missed that thing of reaching out to VCs. Siddhartha 38:45 And during each round, if you can share the mental model of how you value your company, let’s say, during the Titan round, during Matrix and during the Eight Road, was it always like a 4x, 5x revenue as traditional Omni channel or d2c brands are given or how did you think about that? Aarti 39:04 I think that is pretty much set by its general in the industry, it could be anywhere between, say, 4 to 7 or 8x also, which is then based on how good the unit economics of the business are, what is the potential of growth? So I think it’s more of an art and it’s as well as relationship versus like thinking about this is the number also at the same time sometimes, I think it’s also about how much do you want to partner with the other person and the person wants to partner with you because it’s just not the number of a multiple of four or five, because these are intermediate valuations, these are paper valuations, how much do they matter I think your ultimate story comes in when you actually get listed. In general, I think that’s the way to identify or say for example, if there is a strategic kind of a route that anybody decides to take. I think the focus should be on finding the right partner along with that the good thing is there are multiples set up for each industry. Siddhartha 40:11 And one interesting thing is that you brought Deepika Padukone as a brand ambassador one year ago. What was the framework mental model of building, like it requires a huge amount of investment. Until now the company was built very frugally. So How did you change those kinds of gears to investing some into branding. And how have you executed it till now? Aarti 40:38 One of the things that we said and why we decided to partner with Deepika was also that we believe in holistic health. And we think that’s the way that we’ve always talked about with our consumers, because it’s not just about your body. It’s also about your mind. If you look at somebody who has been very vocal over the last three, four years, a few years about, entirely about mental health, also, she’s a great example of physical health in general, I think that predominantly was the reason that we said, okay, that she’s the right person to partner with and could represent the brand values or ethos, and consumers have a lot of things that we can learn, in general, from the lifestyle that she’s adopted. I think the gear change from not investing in brand building to deciding to invest in brand building was also a call, which as a company, you need to take certain bets. Not all your experiments will do wonders. But eventually, as a startup, if you don’t experiment, I don’t think you’re doing the right thing, because there have to be experiments. Some of them could be large scale experiments. Some of them could be, say, experiments on a smaller scale, but it’s important to keep doing those investments. And for us, we were fortunate enough that that partnership has actually done really well for us as a brand, because we’ve done the brand awareness studies or the brand upliftment studies, which have worked really well in general that, we now place right next to the brands that have been built over the last 100 or 50 years. What do the consumers say, for example, we’ve done these studies right next to Horlicks, Protein x, Himalaya, OZiva is coming as one of the trustworthy brands, which has happened over the last four or five years and it’s an important thing. And as we look at the next decade, we believe that there’s a lot of things that we can do in India for the consumers while we’re solving for health. Siddhartha 42:45 One of the things is, how do you go about executing those campaigns because a lot of things can go wrong, and they involve a lot of capital. So what are the frameworks that you adopted, that you want to do certain kinds of things and ignore those things and what are those things? Aarti 43:03 So I think in terms of these campaigns, it was to first identify where the consumer is, we’ve always taken within those campaigns, also a very digital first approach of reaching out to the consumers.I think there are different mediums to reach out to the consumers, You have TV in one place, you have digital, like YouTube, or say Facebook Which are the other mediums, Instagram to reach out to the consumers. We said like in our first kind of campaign. We started digital first, we realize that that communication is working well. And that’s where we actually went ahead and did some TV campaigns as well. I think the digital gives you a good way to experiment on your creative comms. And then if you think that it’s working well, then you can actually take it to a much larger kind of reach. And I think TV on a large scale turns out to be a much cheaper way to actually reach out to the consumers. But within that also can you do a much more targeted approach, which is much possible, because say for example, the Hindi Bell today can be excluded like in general TV, well there can be excluded from the other regions. So you can do our campaign specifically in Tamil Nadu or say you can do it in Andhra Pradesh as a market or West Bengal. I think those are the gradual moving up strategies. But the first kind of lever for us was digital first campaigns. Siddhartha 44:38 And till now, we talked about things that worked out, what are some of the things that didn’t work out during the Oziva journey from 2016 till now and what are your learnings from them? Aarti 44:48 There are a lot of things that have not worked out. I think I have to go back to thinking about even the first business that we were in, which was the services. It was so important to understand that the call to pivot is also an important call when to take it, because it is for us at least that was a pivotal point in our life when we decided that services to products need to happen in the country. Another important decision that we had to take was going from just being nutrition, to evolving to a broader play within consumer health. Things look simple when, again, when you look in hindsight that yes it was the gradual path. But I think when you have strong equity in nutrition, there are obviously questions asked. Why are you going beyond nutrition? Is the right time to go? And we decided, as a company, that we would take that path. And I think we still have to prove that model, I don’t think so. that yet, we’ve proven that the decision that we have taken. But I think the next five years, I’m extremely sure that the way we expect us today, 90% of the revenues come from nutrition and 10 from the other categories that were operating in, at a large scale of, say 500 crore, I believe that would be say, 60%, from nutrition and 40% from the other categories that were operating in. I think that’s how I look at it. Siddhartha 46:19 And while you’re mentioning that, you could have continued in nutrition and built more categories with the same kind of investments that you are now doing in categories apart from nutrition, how was that call taken? Aarti 46:32 But I think it was an easier call, because according to me, it was predominantly I’m solving for skin health, I’m solving for hair health, So if I’m solving for skin health, it could be by what you eat, or what you apply, If you’re solving for hair health, because a consumer has walked into your store or a brand looking for that holistic solution, I think then either whether it’s a consumption or application based product, you need to have both the offerings, so that it can become easier for them to build routines in their lifestyle. Why should they go to two different brands when they believe in the brand ethos, that Hey, that this company derives a lot of its clean label, it’s clean nutrition, clean beauty, we say, It’s nutrients. So even in say, for example, our application beauty products, It’s a lot of phytonutrients that we are using for nourishment from outside and merging that natural and botanical science with say a lot of efficacy that are the clinical trials or the scientific studies. For me, that’s the best combination of the consumer can get the same thing from the same branch. And for us we always look at just the consumer, And what are they looking out for from us? And that was a decision where we say, Okay should we go deeper into say, functional foods is one category that we have not gone into. Because I believe we would not be able to add a lot of value in that category. There is little scope of science or innovation, clinical studies in that space. We love science. We love the r&d that we do. There’s a lot more play that we can value and that we can do in this space. Siddhartha 48:26 Thank you so much Aarti. It has been wonderful walking in your shoes, knowing your journey. There have been tremendous learnings listening to you. I’m glad we could bring you on the podcast and share more about how you built a brand with first principles. Thank you so much for being on the podcast. Aarti 48:45 Lovely Siddhartha, thank you so much. It was great to talk to you. **Sponsor** Prime is a high conviction, high support investor, backing star teams with differentiated ideas. All partners at Prime work actively with the entrepreneurs post-investment to accelerate building a great company. Prime focuses on building differentiating companies whose solutions are 10X better and are powered by technology and product. Prime is now investing from its fourth fund of $100M and is often the first institutional investor in category-creating tech startups such as MyGate, HackerEarth, Mfine, Wheelseye. To know more about Prime visit primevp.in

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