Doodhwala, a Bengaluru-based startup founded in 2015, aimed to revolutionize the traditional milk delivery system in India by leveraging technology to deliver fresh, unadulterated milk and daily essentials directly to customers’ doorsteps. Founded by Aakash Agrawal and Ebrahim Akbari, with Suchitra Agrawal also listed as a co-founder in some sources, Doodhwala quickly gained traction as India’s largest subscription-based e-grocer. Despite its promising start, innovative business model, and significant funding, the startup faced insurmountable challenges, leading to its closure in 2019. This article explores Doodhwala’s journey, its founders, and the lessons learned from its rise and tragic downfall.
The Founders
Aakash Agrawal
Aakash Agrawal, a young entrepreneur with a background in operations and sales, co-founded Doodhwala after identifying a gap in the milk delivery market. In 2010, he helped establish a steel production company in Odisha, showcasing his entrepreneurial spirit early on. His vision for Doodhwala was to create a seamless, technology-driven solution for delivering fresh milk and groceries, making daily essentials accessible with a subscription-based model. Aakash played a key role in scaling Doodhwala’s operations, growing the company from a five-member team to a 400-member organization in just three years.
Ebrahim Akbari
Ebrahim Akbari, an engineer by training and a serial entrepreneur, brought a wealth of experience to Doodhwala. Before founding the startup, he managed a 20-year-old family business in industrial field supplies in Oman, focusing on scaling operations and exploring new markets. Ebrahim’s expertise in supply chain management and business strategy was instrumental in shaping Doodhwala’s innovative approach to milk delivery. He emphasized the importance of maintaining a lean operating model and retaining significant equity, which made Doodhwala attractive to investors.
Suchitra Agrawal
Some sources, such as Tracxn, list Suchitra Agrawal as a co-founder of Doodhwala. However, limited information is available about her specific contributions to the company. Her involvement suggests a collaborative founding team, though Aakash Agrawal and Ebrahim Akbari were the primary figures driving the startup’s vision and operations.
The Birth of Doodhwala
The idea for Doodhwala was born in 2014 when Aakash and Ebrahim, working late on a business project, realized they had run out of milk. At the time, Bengaluru was buzzing with apps for various services—laundry, food delivery, and groceries—but none specifically addressed milk delivery. Recognizing the universal demand for milk in Indian households, the duo saw an opportunity to modernize the traditional “doodhwala” (milkman) system. After weeks of research and surveys, they launched a beta version of the Doodhwala app, which was met with overwhelming customer enthusiasm. This validated their idea of a subscription-based platform for hassle-free delivery of fresh milk and daily essentials.
Doodhwala’s mission was to provide high-quality, unadulterated milk sourced directly from local farms and dairies. The startup offered over 70 types of milk, including A2, organic, goat, and camel milk, catering to diverse dietary needs. Beyond milk, the platform expanded to deliver dairy products, fruits, vegetables, groceries, and personal care items, positioning itself as a one-stop solution for urban consumers seeking convenience and quality.
Business Model and Growth
Doodhwala’s business model was built on a subscription-based, early-morning delivery platform, ensuring fresh products reached customers before 7 a.m. The company connected with local milkmen and suppliers to streamline the supply chain, leveraging technology to optimize logistics and reduce costs. By 2018, Doodhwala was delivering 30,000 liters of milk daily, with 60% of its orders coming from Bengaluru alone. The startup expanded to Pune and Hyderabad, reaching 4 million orders and establishing itself as a household name in these cities.
The company’s lean operating model was a key strength, boasting a last-mile delivery cost of just ₹3.3 and an operational cost of 5%, among the lowest in the industry. Doodhwala raised a total of $14.5 million over three funding rounds, including a $2.2 million seed round from Omnivore Partners in February 2018 and earlier angel funding from Thomas Varkey of Stonehill Capital. The founders’ philosophy of raising funds only when necessary helped them retain over 80% of the company’s equity, making it an attractive prospect for investors.
Challenges and Controversies
Despite its early success, Doodhwala faced significant challenges that led to its downfall. The startup operated on low profit margins, relying heavily on cashback and discounts to attract customers, which strained its finances. Intense competition from established players like BigBasket, Grofers, Milkbasket, and Bbdaily further eroded its market share. Doodhwala struggled to differentiate itself in a crowded e-grocery market and failed to adapt its strategy to evolving industry dynamics.
By mid-2019, signs of financial distress emerged. Vendors reported unpaid dues, with some stopping supplies as early as September due to non-payment. Employees, including marketing head Radha Krishna and a software developer named Sunny, alleged that salaries went unpaid for months, with dues ranging from ₹1 lakh to over ₹3 lakh per individual. A vendor, Manjunatha K of Adern Creamery Pvt Ltd, claimed Doodhwala owed him ₹17.42 lakh for milk supplied between June and September 2019, with a cheque of ₹9.6 lakh bouncing. In total, the company allegedly owed ₹6-7 crore to 30-35 vendors.
In October 2019, Doodhwala announced it was discontinuing its business-to-consumer (B2C) operations and transferring its customer subscriptions to FreshToHome, a Bengaluru-based meat and seafood delivery startup. However, the closure was marred by allegations of fraud and mismanagement. Vendors and employees filed First Information Reports (FIRs) against Aakash Agrawal and Ebrahim Akbari at Ulsoor Police Station in Bengaluru, accusing them of absconding and failing to clear dues. Ebrahim Akbari denied these claims, stating that the company had not shut down entirely and was working on resolving the issues, but the damage to Doodhwala’s reputation was irreversible.
Reasons for Failure
Several factors contributed to Doodhwala’s collapse:
- Low Margins and Cash Burn: Operating on thin margins and offering heavy discounts made profitability elusive. The high costs of customer acquisition, delivery, and maintaining product quality outstripped revenue.
- Lack of Differentiation: Doodhwala failed to establish a unique competitive advantage in a market dominated by larger players with broader product offerings and deeper pockets.
- Poor Financial Management: Excessive spending without proper record-keeping led to significant unpaid dues to vendors and employees, eroding trust and triggering legal action.
- Failure to Evolve: While the founders recognized the need to evolve, Doodhwala remained focused on milk and perishables, missing opportunities to diversify or adapt to changing consumer preferences.
- Leadership and Communication Issues: The founders’ lack of transparency with stakeholders and failure to address financial woes promptly exacerbated the crisis.
Lessons Learned
Doodhwala’s journey offers valuable lessons for entrepreneurs:
- Financial Discipline: Maintain clear budgets and accounting systems to avoid cash flow issues. Timely payments to vendors and employees are critical to sustaining trust and operations.
- Sustainable Margins: Build a business model that prioritizes profitability over aggressive growth fueled by discounts. Optimize costs and focus on customer lifetime value.
- Adaptability: Stay agile and responsive to market changes. A clear long-term vision and willingness to pivot can help startups navigate competitive landscapes.
- Stakeholder Communication: Transparent and regular communication with investors, employees, vendors, and customers fosters trust and mitigates crises.
- Competitive Differentiation: Identify and maintain a unique value proposition to stand out in crowded markets.
Conclusion
Doodhwala’s story is a cautionary tale of a startup with immense potential undone by operational and strategic missteps. Aakash Agrawal and Ebrahim Akbari’s vision to modernize milk delivery resonated with urban consumers, and their lean operating model showcased the power of technology in disrupting traditional markets. However, low margins, intense competition, and financial mismanagement led to its demise. The controversies surrounding unpaid dues and FIRs against the founders highlight the importance of ethical leadership and financial responsibility. While Doodhwala’s journey ended in 2019, its lessons continue to resonate, reminding entrepreneurs that innovation must be paired with sustainability and accountability to achieve lasting success.