- 80% average quarter-over-quarter revenue growth; $37k+ lifetime revenue (unaudited)
- Fulfilled more than 400 orders at an AOV > $70
- 25% of users have made an order with a Cost Per Acquisition of less than $13
- 56% of orders are repeat orders; 17% increase in repurchase AOV; 23% power shoppers (3+ orders)
- Total Amount Raised: US $174,322
- Total Round Size: US $750,000
- Seed :
- Minimum Investment: US $1,000 per investor
- : Preferred Equity
- US $2,500,000 :
- Side by Side Offering
Imagine devoting 3 to 5 hours a week navigating through endless aisles and standing on long lines just to buy groceries that remind you of home. Now imagine there's no in-store customer service, and varying prices with a limited selection of products forces you to visit multiple stores. No one should have to experience this much stress and difficulty shopping for groceries, but this is what Indian grocery consumers have to deal with regularly.
Indian grocery shopping has not changed much in the last 50 years, and fair-priced and high-quality Indian ingredients are not easily accessible to many of the over one million Indian households in the United States. Through key partnerships with wholesale suppliers and FedEx as our last-mile provider, Subziwalla provides a market solution for a seamless Indian grocery shopping experience.
Our service, presentation, execution, and education of our customers is the reason we’ve been growing at 80% quarterly and 56% of our orders are repeat orders. This growth and traction in our launch market of Metro-Atlanta have proven both the demand and strength of the brand through our first 10 months in operation.
Subziwalla allows shoppers to buy all of their Indian groceries quickly and in one place.
We value our shoppers' time and we have built our service from the ground up to provide them with a seamless customer journey focused on convenience. Due to our search, live chat, and intuitive UI, what used to take our shoppers a minimum of 3 hours to shop for their biweekly groceries now takes an average of 11 minutes.
WHAT WE OFFER
- Next-day delivery. Our customers order by 8pm and get their delivery by 8pm the next day.
- We receive inventory directly from wholesalers on the day of delivery, which allows our customers to receive fresh produce.
- Last mile delivery by FedEx. Our partnership with FedEx gives shoppers peace of mind as they receive FedEx notifications and the orders are delivered by uniformed drivers.
- Unique, convenient packaging. Our signature tote bags (#Subzibuddies) keep everything fresh for up to 8 hours so our shoppers don’t have to be home or rush home for their delivery.
- Environmentally-friendly. We do our part by recycling and reusing our bags, and also so that shoppers don't have to worry about discarding the packaging.
HOW WE MAKE MONEY
A minimum order of $40, a $4.99 service fee, and our current average product margins of 45% allow for profitable orders.
While our USP is offering the above features, they also help us keep costs down:
- Next-day delivery gives us the advantage of ordering the exact products from our suppliers,
- We inform FedEx ahead of time so they can plan their routes, which maintains a low cost per delivery.
- Collecting and recycling our packaging also has a two-fold benefit, as it's environmentally-friendly and lowers our CapEx.
WHO ARE OUR TARGET SHOPPERS?
30 to 45-year-old Indian couples with at least one child who:
- Are white-collar professionals
- Have an average household income of $100K
- Share household responsibilities
- Are not as price-conscious as the previous generation
- Live within an average distance of 30 minutes from the nearest large Indian grocery retailer.
WHAT OUR SHOPPERS ARE SAYING
- "Excellent packing, fresh produce and fast delivery. Liked the personal note with the delivery!" - Supriya R.
- "They did everything correct and deserves to get 5 stars. Products are reasonable, produces looks hand picked and fresh.. packaging is out of the world..Very good services.. loved it." - Pradnya N.
- "I have used their service many times and they have been exceptional every time. Great packaging (especially all the vegetables), prompt delivery and great prices. Definitely recommended. They also have a very responsive customer care." - Rakshith S.
WHO IS OUR COMPETITION?
Subziwalla is one of the only services of its kind throughout the Southern United States. While there are Indian grocery delivery services in the Northeast/Northwest, they are limited to working with stores a la Instacart. We believe they neither have the packaging, convenient delivery scheduling, nor the customer service that Subziwalla provides.
We know that grocery is a utility where competitors can easily come in and deliver the same products at a similar or lower price. This is why we have included the customer throughout the entire journey and have put a tremendous focus on building a brand transparency and communication.
We believe Indian grocery shopping has not changed much in the past 50 years, and that Subziwalla is evolving the experience and changing expectations one shopper at a time.
Our consumers deserve better, and we're here for them.
*The above individuals were not compensated in exchange for their testimonials. In addition, their testimonials should not be construed as and/or considered investment advice.
It all started with an onion.
Subziwalla was founded over a dinner while talking about our mutual love of onions with Indian dishes! We vented about how there wasn't a store near us that provided easy access to fair-priced, high-quality Indian ingredients, including our onions. The conversation quickly moved onto how unorganized and time-consuming it was to shop at Indian grocery stores. We knew there had to be a better way to shop for Indian groceries.
We spent the next year understanding the market, researching customer insights, and surveying thousands of customers, three-quarters of whom wanted Indian grocery delivery. We knew we were the ones who had to make it happen, and so we worked to secure a distributor for our products, a warehouse and fulfillment center, and a last-mile delivery service.
We launched in April 2018, working directly with a large wholesaler in the Southeast and delivering through FedEx.
We're uniquely equipped to solve this problem.
Our careers and past experiences range from finance and supply chain to management and customer experience, complementary skills that have allowed us to optimize every touchpoint in our operations and customer journey.
Subziwalla is an e-commerce website selling ethnic Indian grocery. Our customers browse our site as they would their brick and mortar grocery store, through the same product categories they are used to. They add products to their cart or reorder from previous orders, choose their preferred day of delivery and checkout in 11 minutes on average. We have also found that, since customers’ carts don’t expire when signed in, many customers are using their cart as a shopping list.
Our website is fully operational and we are planning to work towards building an app.
We have about 750 signups with 185 active customers.
We estimate that our target audience spends an average of 2% of their household income on Indian groceries. Based on our calculations, and combined with YoY household growth of 5.7%, this equals a TAM of $5.1B by 2021.
Our typical customer is an ex-pat or first generation of South Asian descent, predominantly Indian couples between the ages of 30-45 with an average household income of $100K+.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
US $29,322 (under Reg CF only)
Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
All non-Major Purchasers will be subject to an Investment Proxy Agreement (“IPA”). The IPA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IPA included with Company's offering materials for additional details.
ThumsUpwalla: Investors of $1,000 or more will receive a thank you note from the Founders and a signature #Subzibuddy insulated tote including a can of delicious Thums Up.
Chaiwalla: Investors of $5,000 or more will receive ThumsUpwalla perks plus a #Subzibuddy filled with swag and some of our favorite Indian snacks and sweets.
Chaatwalla: Investors of $10,000 or more will receive Chaiwalla perks plus a personal thank you call from the Founders.
Tiffinwalla: Investors of $25,000 or more will receive Chaatwalla perks plus an invite to a dinner with the Founders.
Thaliwalla: Investors of $50,000 or more will receive Tiffinwalla perks plus exclusive access to engage with the Founders through invite-only email and WhatsApp groups.
Daavatwalla: Investors of $100,000 or more will receive Thaliwalla perks plus quarterly 1-on-1 conference sessions with the Founders.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
The graph below illustrates theor the of Subziwalla's prior rounds by year.
The grocery retail industry is in a state of transformation, and the pressure is on for retailers to cater to individual shopper preferences.
Ethnic grocery (Indian and otherwise) is a rapidly growing segment of the $600B+ grocery retail market in the US.
- The ethnic grocery segment is valued at $37B.
- 80% of American households eat at least one ethnic item per month
- Ethnic food is a growing section of traditional retail offerings
Big box and traditional supermarkets are starting to carry a larger variety of ethnic foods and brands and will be in direct competition with independent ethnic stores.
Patel Brothers has 55 stores nationally. Smaller shops have cornered the market due to the lack of availability, resting on their high-product margins due to the demand of smaller local markets.
Consumers are expecting more convenience and are willing to pay for it. These shoppers are looking for price, quality, and convenience and we believe there is no Indian grocery store providing that combination nationally.
- There are over 1 million Indian households in the US
- Average household income is over $100,000
- Consumers spend 7% of their income on food
We estimate that Indian consumers do 60% to 70% of their shopping at Indian grocery stores. Due to the difficulty of obtaining Indian groceries nationally, we are assuming that only 50% of their grocery spend is at Indian stores.
We estimate that this will equal a TAM of over $5 billion by the year 2021.
The reviewing CPA has included a “going concern” note in the reviewed financials. The Company’s ability to continue as a going concern or to achieve management’s objectives may be dependent on the outcome of the offering or management’s other efforts to raise operating capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company has not yet formed a Board. Although the Company is not legally required to have a board to conduct operations, boards play a critical role in effective risk oversight. A board helps ensure that management’s actions are consistent with corporate strategy, reflective of the culture of the business, and in line with the organization’s risk tolerance. There is no guarantee that a Board will be put in place.
The Company has not filed a Form D for its prior offering of securities. The SEC rules require a Form D to be filed by companies within 15 days after the first sale of securities in the offering relying on Regulation D. Failing to register with the SEC or get an exemption may lead to fines, the right of investors to get their investments back, and even criminal charges. There is a risk that a late penalty could apply.
We have not prepared any audited financial statements. Therefore, you have no audited financial information regarding the Company’s capitalization or assets or liabilities on which to make your investment decision. If you feel the information provided is insufficient, you should not invest in the Company.
The Company’s cash position is relatively weak. The Company currently has approximately $24,000 in cash on hand as of January 31, 2019. The Company could be harmed if it is unable to meet its cash demands, and the Company may not be able to continue operations if they are not able to raise additional funds.
The Company forecasts project 330% growth in revenue from 2018 to 2019. If its assumptions are wrong, and its projections regarding market penetration are too aggressive, its financial projections may overstate its viability. In addition, the forward-looking statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Existing investors have not waived their pre-emptive rights and currently plan on exercising those rights. The pre-emptive right entitles those investors to participate in this securities issuance on a pro rata basis. If those investors choose to exercise their pre-emptive right, it could dilute shareholders in this round. This dilution could reduce the economic value of the investment, the relative ownership resulting from the investment, or both.
The Company’s business model is capital intensive. The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If the Company are not able to raise sufficient capital in the future, it will not be able to execute its business plan, its continued operations will be in jeopardy and it may be forced to cease operations and sell or otherwise transfer all or substantially all of its remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
The Company’s success is dependent on consumer adoption of the Indian grocery delivery, a new and relatively unproven market. The Company may incur substantial operating costs, particularly in sales and marketing and research and development, in attempting to develop these markets. If the market for the Company’s products develops more slowly than it expects, its growth may slow or stall, and its operating results would be harmed. The market for Indian grocery delivery is still evolving, and the Company depends on continued growth of this market. It is uncertain whether the trend of adoption of Indian grocery delivery that the Company has experienced in the past will continue in the future.
The Company’s expenses will significantly increase as they seek to execute their current business model. Although the Company estimates that it has enough runway until end of year, they will be ramping up cash burn to promote revenue growth, increase payroll, further develop R&D, and fund other Company operations after the raise. Doing so could require significant effort and expense or may not be feasible.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Sajal Rohatgi and Manav Thakar. There can be no assurance that they will continue to be employed by the Company for a particular period of time. The loss of our key employees or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
Cyclical and seasonal fluctuations in the economy, in internet usage and in traditional retail shopping may have an effect on our business. Both cyclical and seasonal fluctuations in internet usage and traditional retail seasonality may affect our business. Internet usage generally slows during the summer months, and queries typically increase significantly in the fourth quarter of each year. These seasonal trends may cause fluctuations in our quarterly results, including fluctuations in revenues.
The Company has engaged in Related Party Transactions. In 2017, the company borrowed $2,483 from its founders for formation costs (the “Related Party Loan”). The Related Party Loan is non‐interest bearing and carries no fixed repayment schedule.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC (“SI Advisors”). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. (“SI Selections Fund”). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive securities, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Subziwalla. Once Subziwalla accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Subziwalla in exchange for your securities. At that point, you will be a proud owner in Subziwalla.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or passport
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, Subziwalla has set a minimum investment amount of US $1,000.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own securities after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these securities. Right now Subziwalla does not plan to list these securities on a national exchange or another secondary market. At some point Subziwalla may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Subziwalla either lists their securities on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is Subziwalla's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the Subziwalla's Form C. The Form C includes important details about Subziwalla's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your securities have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.