Hearing care provider Hearzap has acquired a majority stake in Speech and Hearing Care for an undisclosed amount. 

Speech and Hearing Care is a renowned player in Bihar and Jharkhand. Hearzap funded the acquisition entirely through internal cash flows. The deal is expected to drive Hyderabad-based Hearzap’s revenue past ₹100 crore this fiscal year, securing a 30% market share in key regions. 

“This expansion ensures access to top-quality hearing care provided by professionally trained audiologists and supports the company’s target of expanding to 250 stores by 2026, doubling its growth by exploring more partnerships,” said the company in a press note.

Speech and Hearing Care has strong presence in cities like Patna, Ranchi, and Dhanbad. The acquisition will facilitate integration of operations of the two companies and enable Hearzap to offer services in the hearing care industry in the eastern region. 

“By combining our advanced technology with the local expertise of Speech and Hearing Care, we are set to elevate industry standards and provide even better service to our customers,” said S Raja, Founder and Managing Director of Hearzap.

 Hearzap raised around Rs 50 crore in a funding round from 360 One Asset Management Ltd. in November 2023. It operates over 130 locations nationwide.

Meat buying has traditionally been a very hands-on process. Meat eaters generally prefer to personally select the cut, inspect the freshness of the catch, and understand its procurement tactics.

The pandemic brought in a new wave of online-first meat and seafood startups looking to make their mark on the sector, riding on the surge in funding into the Indian startup ecosystem between 2020 and 2022. 

Meat distributor Licious turned into a D2C unicorn in 2021, after raising $52 million in its Series G round. It has raised $490 million in funding so far and has a valuation of $1.47 billion as on September 21, 2023, according to Tracxn. Meanwhile, its peer, FreshToHome, also raised $104 million in funding led by Amazon Sambhav Venture Fund in 2023, taking its cumulative funding to $286 million. 

However, the meat startup sector’s fortunes has since taken a turn for the worse: consumer preferences have largely reverted back, and online meat and seafood retailers have either had to wind down their operations or continue with heavy losses with zero to little gains to show for it in the topline. 

Licious clocked a 9.6% growth in its operating income to Rs 747.7 crore during FY23 from Rs 682.5 crore in FY22. It posted a loss of Rs 500 crore during the same period, marginally up from Rs 485 crore a year ago.

Meanwhile, FreshToHome recorded a revenue of Rs 110.3 crore, resulting in a loss of Rs 409.5 crore.

FreshtoHome did not respond to YourStory’s request for comment. 

Expensive cold chain solutions, too much competition in a saturated market, unpredictable pricing, and ultimately, a lack of sufficiently appealing value additions to draw in a larger consumer base are just some of the challenges that dog online-first players, and are compelling them to look at alternative methods to bolster their bottomline.

Muddy waters

One of the biggest problems faced by online-first startups in the domestic seafood and meat market has been their inability to effectively disrupt the traditional supply chain to customers.

While consumers may have moved towards online channels for the convenience of delivery, especially during a lockdown, they now seek physical touchpoints to verify product freshness and that the meat cuts are processed in clean and hygienic conditions.

Mandrita, a Bengaluru-based Product Manager, says, she prefers shopping for her fish specifically from the nearby HAL market as opposed to ordering online. 

“There is a larger variety to pick from and you get the option of choosing from a variety of sizes. While I do have to clean the meat afterwards, I know it is freshly cut and sold, moreover it is easily 20% cheaper than online alternatives,” she adds.

This consumer preference, combined with competition from FMCG brands like Godrej, Venky’s, and Nandus, makes climbing the profit peak a little too difficult for the meat startups.

Neighborhood stores do not invest in high-tech tech stack and cold chain infrastructure solutions, allowing for lower operational costs, which in turn enable them to sell at a lower price—a liberty online meat brands cannot afford.

Most players who try to reach their customers through Foodhalls and grocery marts just do it for the brand positioning, as these placements come with steep margins, explains Mark Alzawahra, MD and Founder of seafood wholesaler Catch Of Norway Seafood. Commission fees for Nature Baskets, Foodhalls, and the likes can go as high as 40% and in very rare cases it will go under 25% after hard negotiations, he adds.

Since branded cuts on grocery store shelves are too expensive, online food startups have had to go back to industry roots and set up brick and mortar shops, which come with high capex requirements and fewer neighborhoods which can absorb expensive meat outlets. 

As a dire example of this, Chennai-based meat startup Fipola was forced to cease its operations in February 2023, when it failed to raise funds after its aggressive offline expansion. 

What’s the catch?

To combat the crunch, meat players are shifting to alternatives to reach customers directly through brick and mortar outlets, including shifting customer bases to supply to businesses (B2B), or looking to export to other international markets.

Typically, in the food industry, clients of a B2B business include restaurants, hotels, caterers, or other marketplaces that place orders.

An increasing number of online meat startups are pivoting to this model to keep revenue up, as is the case for online seafood firm Captain Fresh, which sources directly from farms and fishermen and distributes to other retailers. 

“This industry doesn’t need a B2C channel or a brand, because there is already a lot of real estate that the world has allocated for this product. If you walk into a retail chain across US or Europe, close to 30-35% of the overall floor space is allocated for meat, seafood,” says Utham Gowda, Founder, Captain Fresh. 

Early on, Captain Fresh realised that a B2B channel was the only scope for growth in this industry. It later shifted its focus entirely to a B2B model outside of India. 

Meanwhile, Gurugram-based ZappFresh sees a nearly 50-50 distribution in its B2B and direct-to-consumer (D2C) channels. It plans to clock a revenue of Rs 160 crore in FY24-FY25 with a significant jump in profit after tax, something its peers are yet to manage. 

“While offline may look very promising and lucrative, it is extremely complex to crack that as well. And running and owning a store may not be the right format to build a profitable business in this space,” notes Deepanshu Manchanda, Co-founder and CEO of Zappfresh.

“As a business, you would want to liquidate the stock in time, it is a challenge to hold the inventory for a long period especially when the product is perishable. A B2B channel allows us to liquidate unsold inventory and bring more equilibrium across the board,” he adds.

Moreover, while seafood is a price-sensitive commodity, the industry, however, works on a mostly fixed-price basis. Therefore it is crucial for distributors to have a large enough base to mitigate any fluctuations in the distribution chain on the retail level.

Fluctuating market prices is a concern, especially for premium seafood like salmon, where market prices update every week globally. 

“In India, domestic seafood prices are subject to daily or weekly fluctuations, largely influenced by seasonality, weather conditions, and availability of appropriate sizes to be caught and sold. Since hotels and restaurants update their menus quarterly or semi-annually, they prefer to enter into contracts to maintain price stability and stay competitive,” Alzawahra says.

A large base requires an even larger logistics channel. It is particularly difficult when the commodity is prone to spoilage if not stored properly and has a short shelf life. 

Industry executives believe that a fragmented cold chain is one of the biggest challenges that needs to be addressed, as it allows companies to establish equilibrium with fluctuations in pricing and food inflation. 

Long way from home

With the domestic market fraught with so many challenges, seafood players are looking towards thicker wallets across the sea. 

Seafood is one of the biggest categories of export in the country. India exported 17,81,602 metric tonnes of seafood worth Rs 60,523.89 crore ($7.38 billion) during 2023-24; and exports improved 2.67% in quantity terms during the same period. The USA and China are the major importers of India’s seafood, according to the Indian Ministry of Commerce & Industry.

Online startups are vying to cash in on this significant revenue stream. The Indian market accounts for less than 10% of Captain Fresh’s total revenue. Its peer, FreshToHome, which picked up its latest bag of funds to expand its GCC and international operation, is also relying heavily on its global businesses. 

“The take rates, the margin profile that you have in the international markets is very different compared to what you have in the Indian market. And if you have access to supply, you are better off chasing markets where monetisations are higher compared to markets like India,” adds Captain Fresh’s Gowda. 

Meanwhile, Zappfresh, which recently acquired Mumbai-based Bonsaro and Bengaluru native Dr. Meat to expand its operation across Western and Southern regions, respectively, is now looking to expand to the Middle East in a format similar to its domestic markets. 

Most of the biggest buyers globally in the meat sector are hotels and restaurants, and this provides the bulk of the volume for imported meat and seafood.

“The feasibility of online models in global markets depends on several factors. For one, the ability to adapt to diverse regulatory requirements and establish a reliable cold chain infrastructure is crucial,” says Prateek Toshniwal, Partner–MICS International & Co-founder, IVY Growth, and an investor in Zappfresh. 

“Additionally, leveraging online platforms allows for efficient market entry with lower overhead compared to traditional retail setups,” he notes.

AI legaltech startups are turning on the heads of the process-centric, traditional legal industry that was established in the past. These companies are using artificial intelligence (AI) to take some legal processes into auto-mode and enhance others, fundamentally changing the nature of practice and lawyers.

With the integration of AI technologies into legal workflows, the roles, skills, and areas of focus for lawyers start to change in some unprecedented ways.

The rise of AI legaltech startups

AI legaltech startups have come into the forefront with a host of innovations that automate tasks customarily done by lawyers. They are powered by technologies such as machine learning, NLP, and data analytics, which help with the creation of tools in a variety of segments such as legal research and contract analysis, due diligence, and compliance management, etc. In most cases, innovations in this direction increase efficiency, reduce costs, and add to the accuracy of legal work.

Indeed, the most astounding fact about AI legaltech is that it churns out reams of data at impervious speeds—unthinkable in earlier times. For instance, AI legal research tools that enhance the old keyword search in large legal databases seeking relevant case law and statutes significantly reduce the amount of time clients pay for. Likewise, contract analysis tools can automatically read through and parse legal documents for key clauses and hidden risks, thereby taking hours of work out of the process.

AI redefining traditional legal roles

The intervention of artificial intelligence in legal practice transforms the traditional role of lawyers in various ways:

1.    Automation of routine tasks: The first and most direct impact from AI legaltech startups is the automation of routine repetitive work. Document review, due diligence, and legal research are the typical areas rocked by AI tools. This shift in time use enables lawyers to focus much more on the activities requiring critical thinking, such as the formulation of legal arguments, counseling of clients, and development of case strategies.

2.    Better decision-making: Through data analytics, AI legaltech startups have offered tools to ensure better decision-making through appropriate data analytics. Predictive analytics help in scoring the potential results of litigation, for example, from past cases. This ability empowers attorneys to advise clients on the best course of action and manage their expectations. Access to this kind of data allows one to draw trends or patterns from case law that would be better suited for the making of legal strategies and advising the client with better quality counsel.

3.    Transforming into strategic advisors: With AI taking over most of the day-to-day drudgery that is legal work, lawyers are increasingly transforming into strategic advisors. Most of the administrative tasks diminish, and hence the lawyers come to be giving high-level advice concerning the legal and business arena. This transition can best be described in the field of corporate law, which expects lawyers to make out complex business environments and be able to deliver insights going beyond the basis of the law’s mere compliance. Such data, in addition, is further empowered by AI tools that analyse market trends, regulatory changes, and financial data to be used by lawyers to better advise their clients.

4.    Greater client focus: Automating the laborious jobs allows attorneys to spend more time developing and nurturing the client relationship. In people-driven industry, where trust and communication are key, the ability to interact with clients in greater detail is a great advantage. More personalised services can be offered to reach the client at their specific need, with more attention and responsiveness. This change is a catalyst for much-improved client satisfaction and long-term collaborative relationships.

5.    New skill-sets and expertise: Yet another major change taking place because of the proliferation of AI legaltech startups is that of a set of new skills for the legal profession. There is a rising demand for attorneys who are competent both in technology and data analysis. The skills in comprehending how best to utilise AI tools are now considered a skill, so are the skills in interpreting data analytics. Also, quickly becoming a critical need is familiarity with information security, data protection regulations, and technology legislations, attributed to the increasing pace of digital transformation. This shift in the bar raises about the prospect of what has been identified as the hybrid of legal practitioners who, on the one hand, possess the legal craft and on the other hand, have technical know-how.

Opportunities and challenges

While the benefits of AI legal tech are clear, the transition also presents challenges. One concern is that their excessive reliance on technology will make them lose some of the most essential legal skills, including critical thinking and judgment. The use of AI tools calls for lawyers to strike a balance in utilisation between core competencies. The other ethical concerns that need to be managed with care include data privacy as well as algorithmic bias for AI applications to be kept within the professional and ethical standards of the law.

A further problem arises with the likely effect on the legal job market. One worries that demand for some kinds of legal work will decrease as AI tools become capable of doing what has traditionally been done by a junior associate or a partner in a smaller firm. But AI, far from displacing workers, is more likely to shift the nature of legal work in ways that will create new opportunities for lawyers to specialize in areas where human judgment and creativity are necessary.

The future of the legal profession

As long as these AI legaltech startups continue to innovate, the legal profession is, beyond any doubt, further bound to change. Collaboration of lawyers with the assistance of AI systems will increasingly become the norm, and these systems will continue to be seen as their augmentation tools, not replacements for them. This way, the future of law seems to be a blend between human expertise and machine intelligence for a more efficient and effective approach to legal practice.

Legal practitioners under such a dynamic environment require lifelong learning too and adaptability. Keeping up with the trends and advancement in technologies will equip them for survival under such fast-changing environments. Infusion of AI in the legal space is far bigger than simple technological change; it is a sociocultural one that requires an entire reorientation in the delivery of professional legal services and of the value that lawyers offer their clients.

Finally, AI legaltech startups are giving leverage to lawyers to be more efficient at work, better decision-makers, and lay more emphasis on strategic advisory tasks that are valuable to the clients. Apart from the challenges that exist, the potential for AI in law is humongous, giving away big capabilities for greater efficiencies in a more accurate and smoother manner of service to the client. The best part can be taken by any future lawyer with the harnessed change in the area of legal technology.

(Anushita SP Karunakaram, Co-founder & CEO at Lawyer Desk)