Why We Partnered

Building the most loved plants & gardening brand

November 12, 2024
|
Listen Time
Why We Partnered

Building the most loved plants & gardening brand

Listen Time
Building the most loved plants & gardening brand
Also available on


Mission-driven founders doing their life’s work produce the most extraordinary outcomes. Siddhant Bhalinge has embodied Ugaoo’s mission from a very early age given his family’s business was in seeds over multiple generations. DSGCP invested in Ugaoo in 2021 and it has been an amazing experience working with the deeply passionate team led by Siddhant and Saurabh Sameer. The care and attention to detail in building the brand has translated to phenomenal customer love. Ugaoo offers a comprehensive portfolio of products, supported by cutting-edge innovations, proprietary product development capabilities and advanced packaging techniques. The brand has scaled well on multiple channels including their website, own stores, digital marketplaces and B2B. The gardening category is poised for explosive growth, and we are excited to double down on Ugaoo as they revolutionize how people purchase plants and gardening products!

 

We first partnered with Siddhant in November 2021, in the thick of COVID, when Ugaoo sold plants, primarily on their D2C channel. Since then, Ugaoo has shifted to an omnichannel approach– expanding on marketplaces, offline, and now quick commerce with an array of products ranging from indoor plants, seeds, pots & planters, and plant care materials (fertilizers, manure, soil mixes, etc.). The business has grown >4x since our investment and achieved full year profitability with phenomenal customer satisfaction metrics. Siddhant and team are very aligned with the DSGCP playbook for building brands Brick by Brick in a sustainable manner.

 

Ugaoo’s biggest competitive advantage is its strong backward integrated supply chain: the company operates a 25-acre farm in Talegaon (on the outskirts of Pune, where it is headquartered), leveraging state-of-the-art greenhouses and horticulture specialists to cultivate all of its plants in-house. This approach guarantees consistency in the vigour, structure, and growth of its plants, along with rigorous quality control through every stage, from packing to dispatch. Ugaoo was also the first brand to launch an innovative packaging that allows for plants to be protected during rough transit journeys, and provide an excellent unboxing experience, whether it is for personal consumption or thoughtful gifting.

Why are We Excited about Plants & Gardening?

 

Pets are the new children and Plants are the new Pets

 

We invest in themes, not categories. We’re bullish on 2 consumer themes playing out: (1) Healthy Living and (2) Evolution of the family & home. We’re noticing a secular global trend of younger consumers, who’ve grown up in urban jungles, seeking connection with nature. They value the positive impact that greenery has on their well-being, and accordingly find ways to incorporate it in their day to day lives. These millennial and Gen Z consumers also believe that plants have aesthetic décor value and often begin their journey with indoor plants. As with any act of caregiving and nurturing, plant parenting helps grow the grower. Plants are the new pets. Like parenting children and pets, who also require care and attention, plant parenting is also a transformative personal journey!

 

Large Market – Ripe for Disruption:

 

The Indian market for plants & gardening is worth USD 11 billion[1] in FY24. It is split as follows: (1) Landscaping (B2B): 45% share, (2) Home Gardening (B2C): 41% share and (3) Corporate gifting (B2B): 14% share.

 

Home Gardening Market:

 

In recent years, there has been a surge in demand for houseplants amongst urban millennials. They are used for décor, gifting, air-purification and overall well-being. The online market (Amazon, Flipkart, Quick commerce) is worth INR 20,000 million (USD 250 million) and had 7% market penetration in FY24. This is expected to grow at 30%[2] CAGR until FY29 to reach INR 74,250 million (USD 900 million).

 

However, the market is fragmented and the current customer experience is broken.

 

1. No Credible Brands: Today, the home gardening market is dominated by unorganized sellers on streets and carts.

2. Lack of Innovation: Given the unorganized supply side, it is unsurprising that there is no innovation or differentiation in the product offerings.

3. Issues with Product QC and Consistency: Local players are unable to provide consistency in quality (longevity, appearance, health) of plants and cannot equip consumers with the information required to take care of them.

There is a massive opportunity to build a category defining brand with world class customer experience.

 

Why is Ugaoo Special?

 

They Control the Customer Experience through Backend Integration and Own Distribution Channels

 

Ugaoo operates a state-of-the-art centralized facility on a 25-acres land parcel in Talegaon, India. It has multiple semi-automated, temperature-controlled greenhouse and poly-house nurseries which employ expert consultants and industry best practices to ensure superior plant quality in terms of freshness and durability.

 

·       Ugaoo employs 210 farmers at their Talegaon farm, with 52% female majority in the workforce. Their primary revenue contributor SKUs are grown in house at this facility.

·       Ugaoo also has 11 partner local nurseries.They work with local farmers to procure plants and plant-care products.

·       The website and own-stores are strong growth drivers for Ugaoo and enable the brand to control the customer experience at the point of purchase– including educating consumers about plant care.

Product & Packaging Innovation in a Commoditized Market

 

Ugaoo has truly innovated the shopping experience for a plant parent. They focused on packaging innovation to enable transportation of plants whilst maintaining high product quality standards.

 

Product-level Innovation:

·       Packaging innovation: Specially designed tube ensures that transit damage is negligible

 

·       Self-watering pots: All Ugaoo plants come in self-watering pots that simplifies plant care and prevents overwatering of plants

 

·       Potting mix: Special potting mix enriched with slow-release fertilizers that keep plants hydrated

Transformational Customer experience & service

 

·       Unique Website Shopping Experience: Provides detailed information on the website on plants, benefits, location for placement in house, lighting and watering instructions, common problems, styling, and décor tips etc.

·       Premium & first of its kind shopping experience at the stores:Ugaoo stores have a premium and welcoming ambience. A disruptive experience when compared to other nurseries in India.

This has been done & done again– Our learnings from developed markets

Bloomscape

Bloomscape was founded in 2018, by Justin Mast, a fifth-generation greenhouse grower, with an aim to revolutionise how people shop house plants. The company’s vision was to enable and equip all households in America to shop fresh, healthy plants directly from greenhouse. With millennials as their primary TG, the company started with selling indoor plants online via a fully backward integrated model.

 

The company fulfils all orders from its own central nursery and the major value proposition is healthier, higher quality plants directly from greenhouse delivered at the convenience of doorstep. The company is now working to refine its regional fulfilment strategy to include localized centres and systems that will shorten transit times even further. There is a very high focus on quality – the company has innovated and filed patents on parts of packaging technology; their proprietary soil mix has a bonding agent that holds the soil together better during shipping and better protects the roots.

 

One of the biggest differentiators is the excellent service that company offers. They had very early on built a tele-assistant service to help customers seek advice on plant care from an expert. In the initial days, the founder’s mother, who has40-years of horticulture experience, single-handedly ran the service. This later expanded to a full-fledged team and Bloomscape has recently acquired a plant-care app Vera.

The Sill

Founded in 2012 by Eliza Blank,The Sill is a startup that sells potted plants online and in physical stores.The founder strongly believes that plants make people happy and thus aims to make buying and caring for houseplants easier and more affordable for new-age millennials and Gen-Z consumers.

The company takes ‘better for world’ approach and thus sources plants from local nurseries and growers, ceramic planters from women-owned pottery businesses focused on limiting environment impact. They have both online and offline presence and runs a successful subscription and corporate gifting business than ensures recurring revenues.  

They host workshops and meetups for plant parents in their offline stores to create a community and drive engagement. The content platform has multiple authored articles and CareLibrary includes specific care instructions for each plant.

The company has now evolved into a lifestyle company which also sells home décor, skincare and wellness products.

Plant delivery startup The Sill makes it easy to learn about which plants  are right for your home - here's how it works | Business Insider India

Why we love Ugaoo in a nutshell

Unparalleled founder x market fit

Ugaoo's grower, co-founder & CEO (Siddhant Bhalinge) has a special relationship with plants. Ugaoo was born out of his passion and love for green nature. Hailing from the family of India’s oldest vegetable seed business, Namdeo Umaji Agritech Pvt Ltd, Siddhant gained hands-on operational experience in supply chain before founding Ugaoo. He is a landscape architect by education and has worked across Europe and USA after graduating from California State Polytechnic University– Pomona.  

 

Leader in a fast-growing market and ability to build a category-defining brand  

The online market for plants & gardening (Amazon, Flipkart, Quick commerce) is worth INR20,000 million (USD 250 million) and had 7% market penetration in FY24. This is expected to grow at 30%[3] CAGR until FY29 to reach INR 74,250 million (USD 900 million). There is a global, secular trend for younger consumers to use plants for décor, gifting, air-purification and overall well-being.  

 

Backward integration & ownership of customers through proprietary channels

The state-of-the-art facility at Talegaon is an amazing defensibility for the business and offers proprietary product capabilities and tight quality control. The own distribution channels will be a major contributor to revenues as the brand nurtures the relationship with the customer base.

 

Deep consumer love and category-defining brand recall

Ugaoo has high brand recall in the plants & gardening category. They are category leaders in the online and offline channels. Ugaoo also has an NPS of 85, reflecting deep consumer love and appreciation for the brand.

Strong, capital efficient growth

Ugaoo has managed to deliver solid growth in a capital efficient manner. The business is at a capital efficiency of more than 4x and was full year profitable in FY24. We have a founding team that respects capital and is building an amazing business brick by brick.

We are super excited to partner the Ugaoo team as they build India's largest organized plants & gardening brand!

[1] Source: Statista https://shorturl.at/exFPT, Ugaoo management  

[2] Source: Amazon,Flipkart, Blinkit category partners

[3] Source: Amazon,Flipkart, Blinkit category partners

Stay informed with our newsletter

Discover insights, perspectives, and the latest happenings in the consumer ecosystem.

Subscribe

Stay informed with our newsletter

Discover insights, perspectives, and the latest happenings in the consumer ecosystem.

Subscribe

Related articles

Why We Partnered with Moom: The opportunity to create natural remedies for the modern Asian woman with a personalised, convenient, and transparent supplement purchasing experience.
Why We Partnered with Rosé All Day: Indonesia’s Insurgent Cosmetics and Skincare Brand
Why We Partnered with KNYA: Building a Category-Defining Brand for Medical Professionals’ Apparel Needs.