Flaer has raised $2.5 Mn in a pre-seed funding round from Singularity Ventures, the family office of Asian Paints’ vice chairman Manish Choksi, and three angel investors
Flaer will operate in the B2B2C home interior supply category and aims to establish an omnichannel presence
The founders, Vikas Dosala and Pawas Prakash, aim to use the funding to drive consumer behaviour, find the product-market fit and identify the right go-to-market strategy
Flaer, a startup founded by Vikas Dosala – the cofounder of D2C fresh food delivery startup Fraazo and Pawas Prakash – a senior executive at Fraazo, has raised $2.5 Mn in a pre-seed funding round from Singularity Ventures and the family office of Asian Paints’ vice chairman Manish Choksi.
The funding round also saw participation from three angel investors, Dosala told Inc42 in an exclusive interaction, without disclosing their names.
Dosala launched Flaer, along with cofounder Pawas Prakash, in stealth mode after Swiggy acqui-hired the supply chain and procurement team of Fraazo in October 2022. The new startup was incorporated on November 28, 2023. The founders aim to turn it into an omnichannel B2B2C home interior supply platform.
Both Prakash and Dosala are alumni of the Indian Institute of Management, Calcutta and together have an experience of almost 16+ years in Asian Paints. They played an integral role in developing Asian Paints’ digital footprint and consumer tech capability. Prakash also headed the category and brand verticals at Fraazo between November 2021 and October 2022.
The founders aim to use the funding to drive consumer behaviour, find the product-market fit and identify the right go-to-market strategy.
Flaer is expected to become fully operational in the next three months.
“Home interiors typically have nine categories. We are starting with wood and laminates and aim to add three more categories in the next 18 months,” Dosala said.
How Funding Winter Brought Fraazo’s Demise
In 2018, Dosala quit his job at Asian Paints to lay the foundation of FreshVnF, which later became Frazzo. He started FreshVnF with three other cofounders – Atul Kumar, Sumit Rai, and Aashish Krishnatre – as a B2B venture delivering fruits and vegetables to cloud kitchens and restaurants.
By the end of 2019, the startup was competing with the likes of Zomato’s Hyperpure and even became the backend operating partner for Swiggy’s restaurant supply business, Dosala claimed. However, it had to pivot amid the pandemic as restaurants shut down due to stay-at-home mandates.
“Because we had direct sourcing from 25 odd districts across Maharashtra and Karnataka, we had the supply. But since the restaurant demand was not there, we realised we had a great demand in residential houses, so we pivoted to Fraazo,” he said.
The pivot seemed to have worked wonders for the startup as Fraazo raised a Series A round of $15 Mn in 2021. Within a few months, it bagged $50 Mn in its Series B round in 2021 and scaled the business to five cities. Fraazo was backed by the likes of Sixth Sense Ventures, Nabard-backed Nabventrues, Equanimity Ventures, Apar Group and Manish Choksi.
However, the onset of the funding winter at a time when Fraazo was on an expansion spree hit the startup hard. “…we failed to get the timing of Series C funding right. We had planned it for much later. However, the market sentiment was not in our favour between 2022 and 2023. At the same time, we signed up contracts and expanded from 70 stores to 250 stores within a three-month time frame, thus depleting our chances to go for the venture debt route as well,” Prakash added.
As a result, the startup had to shut more than 50 of its dark stores and lay off 150 employees in 2022. Later, Swiggy acquihired few teams of Fraazo and the startup shut operations.
Learnings From Fraazo To Help Flaer Chart Its Path
The founders claimed they learnt some important lessons from their experience at Fraazo and these learnings will help them lead Flaer.
“We are not looking to make the same mistake again. Instead of growth and profitability, our focus will be primarily on achieving the right product-market fit in the first few years,” Prakash said.
The home interior supply market is largely unorganised and is a complex space. As such, Flaer is likely to need more time to build a sustainable venture in the fast-growing space. The Indian online home decor market is estimated to grow at a CAGR of 10.79% between 2023 and 2028 to reach a size of $4.78 Bn by the end of this period, as per a report.
Flaer will compete with traditional hardware stores and online ecommerce marketplaces catering to home decor supply needs, such as Material Depot, IndiaMART and Hippo Stores.
However, the founders of Flaer are undeterred by the challenge as they believe that the market has space for multiple players. “… we believe that this space can add at least 3-5 unicorns in the next 10-15 years,” Dosala concluded.
