Interview: Kishan Karunakaran
CEO at Buyofuel
It will be good if policymakers can ensure that policies are enforced better
September 27, 2022. By Manu Tayal
In an exclusive interaction series with startup companies in the energy and mobility space, Manu Tayal, Associate Editor, Energetica India, interacted with Kishan Karunakaran, CEO, Buyofuel, a Coimbatore-based startup working as an online marketplace for biofuels. Here’re the edited excerpts from that interaction:
Que: Tell Energetica India readers in brief about Buyofuel including its vision.
Ans: Buyofuel’s vision is to ensure that we substitute a major part of India’s fossil fuel consumption with biofuels and that all types of wastes generated in India are converted into biofuels in India, ensuring that India can decrease its CO2 emissions significantly while managing its wastes’ better and decreasing its fuel imports, all of this, in turn, to ensure that our next generation has a greener and cleaner earth.
We are a team of 34 members including all co-founders. We are earning a monthly revenue of more than Rs 2 crore and growing at 75 per cent month on month.
Buyofuel was incorporated on May 13, 2020, and started onboarding external users by January 2021. Moreover, it started transactions from external users by May-June 2021.
Que: How did the idea of forming Buyofuel come into existence?
Ans: I have been in the biofuels sector for more than 14 years, as I was involved in setting up Tamil Nadu’s 1st commercial scale biodiesel plant which was also India’s 3rd commercial scale biodiesel plant.
As a biofuel manufacturer I observed that there were significant gaps in the biofuel value chain in India making it difficult for biofuel manufacturers to regularly source wastes for biofuel manufacturing at the right price and at the right quality, it was also very difficult for biofuel manufacturers to get a regular demand for their biofuels at the right price. Brokers, aggregators, and large traders made the entire sourcing and sales difficult, and less transparent.
Similarly, fuel consumers also found it very difficult to source a regular quantity of biofuels to substitute for their fuel consumption as there was a lot of quality variance among sellers and no transparency because of the brokers and traders in the supply chain, and so continued to use fossil fuels which came from large companies in an organized manner with quality assurance.
In 2018, when India banned the imports of all types of biofuels and increased duties for raw materials for biofuel manufacturing, it was a move in the right direction to increase the domestic supply of biofuels and ensure that wastes generated within India are converted into biofuels in India. Around that time, I met Venkat and Sumanth, two tech entrepreneurs through a common friend, they shared a common vision of sustainability and greener earth for our next generation, Prasad Nair was working closely with me, to set up an organized supply chain for wastes to fuels in Kerala and also came from a technical education background, and so all the four joined together to create “Buyofuel”- India’s 1st online platform for all types of biofuels and wastes.
Que: Kindly share information about the company’s current registered user base, along with the supply capacity of various kinds of biofuel.
Ans: We are having a user base of 1,100 users. We have a buyer base with a buying capacity of more than 6,00,000 MT/ month and a seller capacity of more than 2,00,000 MT/month already on our platform.
Que: Shed some light on your educational background, achievements, and experiences across sectors, along with other founders if any.
Ans: I am the Chief Executive Officer of Buyofuel and have more than 14 years of experience in the Biofuels and wastes to fuels sectors across India, South East Asia & Middle East. I have done an MBA from NUS Business School-Singapore and set up one of India’s earliest commercial-scale biodiesel manufacturing units in 2008. As an individual entrepreneur before starting up Buyofuel, I sold more than 40,000 MT of biofuels and waste.
My second partner is Venkat Selvan who is working as CTO of Buyofuel. He is an Engineering Graduate with 12+ years of entrepreneurial experience in a tech startup as CTO and chief developer developing tech products and solutions for a wide range of companies including large corporates like Greaves, Ampere electric, QpiAI, etc.
The third partner of Buyofuel is Sumanth Kumar who is working as the CMO/ Product Management. He is also an Engineering Graduate with 7+ years of Entrepreneurial experience as the founder of a tech startup, actively involved in sales of tech products, and running marketing campaigns for companies like greaves, Ampere electric, and QpiAI.
Our fourth partner is Prasad Nair. He is working as a Product Integrations & Product Manager. Nair is an Engineering Graduate with Ample 360 degrees of experience in the biofuels sector right from user onboarding to sales to sourcing. He is also having 4+ years of experience in technology integrations and web development for MSMEs.
Que: In the initial phase, do you face any challenges being a startup entrepreneur?
Ans: As a startup Entrepreneur there are many challenges in the Initial phase. However, we as a team have significant experience in biofuels and waste to fuels and so were able to acquire users more smoothly than most startups, two of our main challenges were getting good talent in the initial days as a lot of talent are still skeptical about joining early stage startups and if they are keen to join have abnormally high expectations based on benchmarks from unicorn startups, and the 2nd one was about to getting the “not-so” tech-friendly sellers of wastes and biofuel manufacturers to adopt to a tech platform and use the tech platform for their transactions.
Que: What are your views on government support for the start-up ecosystem in the country? Any suggestions?
Ans: The government support for the Startup ecosystem currently is fabulous. We are an AIC incubated startup, we are incubated and even currently have our office at AIC Raise in Coimbatore, which is India’s 1st UND SDG Goals-based incubator. Such initiatives like the AIC, AIM, Tinker labs, etc driven by the Niti Aayog are helping startups significantly and ensuring that there are more startups across all types of cities and towns. The Seed-fund India initiative and various other initiatives have also made seed funds and grants readily available for startups across India.
Even the Startup India website also assists the registered startups in multiple ways, today it is much easier for a startup to commence operations and the whole process is much smoother and faster.
Que: In your view, what are the various bottlenecks in the Biofuel industry in India?
Ans: The biofuel industry has significant bottlenecks in the supply chain, as it is very difficult for biofuel manufacturers to source regular quantities of wastes of the required quality for their biofuel manufacturing in a transparent manner and at the right price.
Similarly, fuel consumers avoid switching to biofuels as they are unable to source regular bulk quantities of quality biofuels for their fuel requirements at the right price. This in turn ensures that biofuel manufacturers also struggle for a stable and regular demand. Brokers, aggregators, and traders in the waste and biofuel sectors are the primary reason for these bottlenecks.
Que: What will be your key suggestions to policymakers for boosting the share of biofuels in the country’s energy mix?
Ans: Policymakers have made many policies that are very favourable for the biofuels and wastes sector over the past 5 years such as completely opening up trading and retailing of all types of biofuels, setting up mandates to substitute 10% of
various types of fossil fuels like coal, petrol, diesel, LPG, etc with equivalent biofuels. However, it will be good if policymakers can ensure that these policies are enforced better by mandating digital traceability and tracking of emission reductions and mandating carbon credits and RECs for various types of industries like cement, steel, paper, tyre, pharma, chemicals, infrastructure, etc which are large consumers of fossil fuels.
Policymakers should also look at the possibility of decreasing or waiving off GST for various types of waste that are used in biofuel manufacturing. Policymakers should also give more clarity and should centralize the procedure for retailing biodiesel as many states are creating roadblocks to this. Also, policymakers should launch the flex fuels policy at the earliest as the growth of some liquid biofuels is being restricted by engine manufacturers.
Que: Kindly share details about Buyofuel’s investment and funding. Any new funding plans?
Ans: Buyofuel raised Rs 1.65 crore from IPV by November 2021 and our current incubator AIC Raise which is India’s 1st UN SDG goals incubator also co-invested Rs 15 Lakhs with IPV, so Buyofuel raised a total of Rs 1.8 crore. We are actively looking to raise funds and are in active discussion with multiple investors for the same.
Que: What will be the company’s growth plans for the next five years?
Ans: By 2027, Buyofuel aims to replace at least 1% of India’s fossil fuels consumption with biofuels and 1% of India’s wastes will be transacted through the ‘Buyofuel’ platform thereby ensuring that about 20 million tonnes of biofuels and wastes will be transacted through the platform in a single year. This will ensure that Buyofuel will earn annual revenue of about Rs 4,800 crore by 2027. Also, the company is looking to foray into other interesting markets for biofuels and wastes as a cross-border marketplace in the next 5 years.
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