Investment Needed for Dairy Tech Setup Against 30% Stake With 55% ROI

A dairy Set up to sell Raw Milk and Products along with Hydroponically grown vegetable & salads through Mobile App in Mumbai and other metro cities. It's a virgin area.

• Products/services: To start with, Raw milk would be the core product. However, to make this process successful and to ensure healthy start we will provide Kefir as sample for at least a week to all new customers in the welcome kit. Cow fat (Ghee) & Cottage Cheese (Made out of Raw Milk) would be the de-risking elements. Other organic food as Hydroponically grown vegetables and salads along with extra virgin edible oils(Mustard, Peanut, coconut oil etc.)
• Target market: All tier one and tier two cities in India starting with Greater Mumbai (Mumbai, Mumbai Suburbs, Navi Mumbai and neatly connected cities. Our target customers are top and middle consumers of the consumer pyramid. As per the statistics, the population of Greater Mumbai is more than 20 million (as per 2011 census). If we assume there are 5 million families (Considering 4 members per family consuming one litre of milk daily), our target customer is only 2% to 3% of the total population (around 50 thousand to 150 thousand families will be targeted). In the first year we are targeting only 0.15% of the total population. Apparently, we will not face the rigorous competition issues because 97% population would still be consuming the regular milk (hopeful for this statement)
• Revenue generation model: Prepaid subscriptions (B2C) for Raw Milk and Market place for Raw Milk products, vegetables and salads.
• Business goals and expected outcomes: The goal is to be the trusted brand in Raw Milk segment and make manifold ROI for the investment
• Progress on the project/business: First 6 months will go in to creation of infrastructure, marketing Sampling and proof of concept, hence no revenue. From 7th month onwards through subscription things will roll out and achieve breakeven in next 6 months.
• Project timeline and key milestones: Phase 1: creation of Infrastructure(IT & Non IT)-4 Months, Phase 2:Marketing and sampling to acquire customer base-2 months, Phase 3: Production-targeting to have 10000 active customer base in Raw milk segment and equal penetration in terms of Products and vegetables.
• Funding needs and offering to the investor: We need at $140 as seed funding to create the basic infra and $1.5 million to launch the full fledge production. For all these investment we can offer 30% equity against the 50% of the investment amount and rest 50% will be debt.

This is the right time to implement because the consumer behaviour is getting moulded towards the Raw Milk consumption and there are no such big players for this. New ventures are emerging but for the regular milk supply. This is going to be a bold endeavour and this can be successful by making everyone aware of the pros of Raw Milk & its benefits. We are going use latest technology to develop powerful tools which will help us spread awareness of our products and enable consumers to subscribe, spread referrals, track consumptions, pause or stop subscriptions. Also the suppliers’ app shall help them track quantity quality of supplied, Amount payable & Receipt, etc. The entire process is going to be absolutely secured since these applications will be used for financial transactions
1. The Milk is going to be 100% Untouched by hands and with 0% Adulteration
2. Barns and Plants are going to be extremely hygienic. This shall be open for all customers to verify
3. Our technology intervention is going to be robust. We will ensure timely delivery of products with utmost quality
4. Our animals are going to be mostly grass-fed and tested for all type of tuberculosis to ensure safe & healthy milk
5. Our products are a bit costly but this is worth paying for the kind of quality the consumer will get
6. Competitors are not that Tech savvy
7. Our focus on distribution will be utmost
8. We will be 100% online and will sell under controlled ecosystem. As a result we will not fall prey of false commitments both in terms of distribution and services
9. We will try to cover the maximum possible area in Greater Mumbai
Competitors
we are not competing with the regular Milk Industry, there is not point of mentioning their names explicitly. However there are few players who are running their shows. Few of them are:
1. Keshariya Farms, Ghatkoper- Supplies only A2 products (Indigenous cow milk & milk products). Does not have much effective technology intervention. Mostly offline selling.
2. Provilac, Mumbai: Supplies Farm to Home milk within 12 hours, but zero visibility of the company. Applications are not working properly, OTP is not getting generated, and no Sign up is available on the site. Sample is supplied religiously. Poor distribution systems. The milk is unpasteurized.
3. Sarda Farms, Nashik- This Company is not supplying Raw Milk. They supply variants of Milk such as Pasteurized, Skimmed etc. along with other milk product like Curd. They had started selling by invitation only. Recently they have opened up for regular sales.
4. Pride of Cows, Pune (Part of Parag Milk Food) - Parag milk food is one of the large players in the generic milk business having brands like Gowardhan Milk, ghee, Go Cheese etc. They have started “Pride of Cows” as a different brand under Farm to Home segment but this milk cannot be called as Raw Milk for the obvious reasons pertaining to the process.
Common Issues
a. Their system is very poor. Application is non-responsive. Sign up is not allowed
b. No detail information about the product available on, the app
c. Farm visit is not allowed
d. Visibility is very low
e. Area of operation is very limited
f. Poor distribution system

I have done a fair research on the competitors in terms of Product, Technology, Sales & Distribution strategy, etc. and found that all these things are in a very mediocre level. Hence, this is the time when we can invest some extra money on addressing the loop hole of the competitor companies for which the consumers are suffering in a way or other. Though the competing companies claim to sell premium milk, but that cannot be considered as Raw Milk and the benefits cannot be ensured. The premium milk is as bad as regular packaged milk though in a concentrated form. Apparently we don’t have any competitor in organized market.Our product will yield a considerable market share because, we are going to infuse knowledge and awareness about Raw Milk systematically in to brains of the customer. We are going to influence milk consumption pattern of a set of consumers who can afford to spend INR 90 for a litre of milk.
All tier 1 and tier 2 metros are going to be our areas of operation. To start with we are going to target Greater Mumbai (Includes Navi Mumbai, Thane & Mumbai Suburbs). In all these areas, our target customers are the top and middle level consumers of the consumer pyramid. In case of reachability Navi Mumbai is absolutely a virgin area. In this area availability of Raw Milk is almost nil and the demand for such product is pretty high.
As per the statistics, the population of Greater Mumbai is more than 20 million (as per 2011 census). If we assume there are 5 million families (Considering 4 members per family consuming one litre of milk daily), our target customer is only 2% to 3% of the total population (around 50 thousand to 150 thousand families will be targeted). In the first year we are targeting only 0.15% of the total population. Apparently, we will not face the rigorous competition issues because 97% population would still be consuming the regular milk (hopeful for this statement)
In the current scenario, milk is getting sold at INR 38-58 per litre depending on the brand. Such milk is adulterated through pasteurization, Homogenisation, fortification & extraction. Our milk is going to justify its cost of INR 90/litre due to availability of helpful enzymes, Omega fatty acid in its original form, Heart friendly cholesterol and other natural probiotic properties.
Summary of Marketing Approach
1. We will focus on target areas to ensure sales and smooth distribution
2. We will introduce referral program which will ensure continuity of subscription and customers will get more free units with referred subscriptions
3. We will try to focus on corporate (dealing with speciality Milk Products or supplements) as well where we can provide Raw Milk in bulk quantities
4. Customer will get the liberty of choosing the time of delivery from the available slots. This will prompt them to buy subscriptions well in advance.
5. We will use technological platforms to expand our reach to the maximum possible mass
6. We will create a powerful algorithm to facilitate all these options

I am seeking seed funding which can be divided into 2 heads
1. Fund before launch/proof of concept
2. Series A funding for Quick Expansion

The expenses are as under:
1. Infra Creation (Farm, IT & Non IT): 6.5 CR
2. Marketing & Advertising and Sampling: 0.3 CR
3. Initial Production: 1 CR
4. Salaries and advances

1. Debt investment amount: $750000
Annual Interest Rate: 14%
Loan Tenure: 120 Months
Moratorium Period: 6 months
Easy Monthly Installment: $12589.01
Total Interest Paid: $652958
2. Equity Investment: $750000
Shares offered: 30%
Dividend To be paid : 30%
Return on Investment : 40%
3. Installment of the investment to be made:
Phase one : Jan 2019
Amount: $500000
Phase Two: March 2019
Amount: $1000000
4. I would really appreciate if I have someone from the investor side in our Board of Directors. we will definitely cherish the advises of the investing company on this.