Dharaksha Eco Solutions is a startup featured on Shark Tank Season 3 for creating eco-friendly alternatives to thermacol, a harmful plastic material that takes thousands of years to decompose.
The founders presented their vision of turning crop waste into sustainable packaging materials. They had an unusual offer of the Sharks and asked for Rs. 1250/- in exchange for 1% of the company.
The ask definitely surprised the sharks as much as it surprised us, and on clarification, the founders added a catch to the deal. Continue reading for the full pitch details.
Dharaksha Eco Solutions: Company Overview
Dharaksha Eco Solutions is a biotech-driven R&D company that makes alternative sustainable material that directly replaces thermacol.
Thermacol is a petroleum-based product that takes around 2000 years to degrade, meaning the first thermacol ever produced still exists in the environment. It is a bigger problem than plastic because its recallability is less than 2%.
Dharaksha’s innovative solution tackles this problem by using paddy straw waste. Every year, 3-4 crore tons of paddy straw waste is burnt in the states around Delhi, which is equivalent to the annual emission of 12 Cr Vehicles.
The Startup aims to create a sustainable future, replacing thermacol with their eco-friendly solution and contributing to cleaner air and water.
Founder of Dharaksha Eco-Solution:
- Arpit Dhupar: He is from Delhi and founded Dharaksha Eco-solution. He was brought up in Delhi and completed his Mechanical engineering from Maharaja Agrasen Institute of Technology (IP University) and Masters in Design of Machine Elements from IIT Delhi.
- Anand Bodh: He is from Jaipur and co-founded Dharaksha Eco-Solution. He has pursued psychology.
The founders of Dharaksha want to solve the serious problem of pollution in India. To emphasize the seriousness of the problem, the founders noted that 15 of the world’s 20 most polluted cities are located in India.
According to an article by Economic Times, stubble burning amounts to 25-30% of air quality issues in Delhi.
Dharaksha aims to solve two problems with their solution. They want to eradicate the use of thermacol and provide an environment friendly solution to burning of crop waste. Through their solution, they want to create a sustainable future with clean air and water.
Dharaksha Product Details and Production Process:
Dharaksha’s main product is a green alternative to thermacol. This eco-friendly material is made from crop waste, specifically leftover paddy straw.
Dharaksha solves this problem by adding specially engineered mushroom strains to the crop waste. These mushrooms grow and spread their mycelium roots throughout the waste material.
The mycelium acts like a natural glue, binding the waste into a strong, moldable substance. This substance can be shaped into different products, providing a natural replacement for thermacol that is biodegradable and good for the environment.
Production Process:
- Farmers gather grains and leave behind crop waste known as “parali.”
- The crop waste is collected and transported to Dharaksha’s facility and transferred to bags.
- An engineered mushroom strain is then added to the crop waste. Mushrooms then feed on crop waste, and grows and spread their roots (called mycelium) throughout the waste material.
- Once the mycelium has grown completely, they form a dough-like texture.
- The bags are then broken down and filled in moulds of desired shapes and stored for 4 days.
- After 4 days, the mycelium takes shapes of the mould. It is then taken out and baked in ovens to kill the mycelium and stabilize the material.
- After baking, the eco-friendly products are complete and ready to be used, and it provides a sustainable alternative to thermacol.
Dharaksha’s process not only helps reduce environmental pollution caused by burning crop waste but also addresses the global issue of air pollution.
Their products are biodegradable, environmentally safe, and economically practical, offering a green solution to modern packaging needs.
Challenges & Solutions for Dharaksha EcoSolution:
This new startup has some sort of challenges in terms of cost and manufacturing. Here is a list of challenges and solutions that the startup is facing:
Challenges:
- Products like Thermacol & paper based solutions are cheaper compared to the Dharaksha’s Product.
- Due to a lack of automation, Dharaksha products are 2-3 times more expensive than thermacol.
Advantages:
- Thermacol is harmful to the environment, and paper based packaging solutions are not moisture proof and have problems in export.
- Dharaksha’s packaging boxes are naturally hydrophobic and can reduce box size by 15-20%
During the pitch, Arpit Dhupar emphasized that their high cost of production can be significantly reduced by investing in tech and automation. They believe they can match the market price of thermacol in 3-4 years.
Production Capacity and Team
Dharaksha currently produces 20,000 pieces per month, which generates a revenue of ₹500,000 per month.
The company has a team of 40 individuals, including 20 engineers, biotech administrators, and 20 laborers, with a total monthly burn of approximately ₹15 Lakhs.
Dharaksha’s Market Analysis:
With increasing global awareness of environmental issues and stricter regulations on plastic use, there is a growing demand for eco-friendly solutions.
The global market for Thermacol will be 14.98 billion in 2022 and is predicted to grow to around USD 24.03 billion by 2030.
Dharaksha’s innovative approach using agricultural waste appeals to industries seeking sustainable packaging options, such as cosmetics and consumer electronics packing, which is scheduled to reach $46 billion by 2030
However, challenges include competition from alternatives like paper-based products and the need for further technological advancements to match traditional materials in cost-effectiveness and performance.
Dharaksha’s Financial Performance:
In January 2022, Dharaksha raised ₹4 crores in its first investment round, valuing the company at ₹22 crores. Currently, Dharaksha produces 20,000 pieces per month, generating a monthly revenue of ₹5,00,000.
But the company employs 40 people, including engineers, biotech administrators, and laborers, with a monthly burn rate of approximately ₹15 lakhs.
Dharaksha aims to match the price of paper-based products soon and achieve cost parity with thermacol packaging within 3-4 years. The company expects an EBITDA of 30-40% once these goals are met.
Dharaksha’s Future Plans:
Dharaksha is dedicated to positively impacting the environment while growing its business and making its products more affordable. The startup aims:
- Reduce production costs to compete with paper-based packaging solutions in the near term.
- Achieve cost parity with thermacol packaging within 3-4 years.
- Invest in developing and deploying a special-purpose mould-filling machine to enhance automation and reduce costs.
- Continue to innovate and expand their product line to provide eco-friendly alternatives that help reduce pollution and promote sustainability.
- Target an EBITDA of 30-40% by improving production efficiency and scaling operations.
SWOT Analysis of Dharaksha Eco Solutions as of 2024:
- Strengths: Unique eco-friendly alternative to thermacol made from agricultural waste. The startup has a solid research and development foundation focusing on biotechnology.
- Weakness: Limited automation makes Current costs 2-3 times higher than thermacol. The startup needs further automation and technological improvements to reduce costs, as the founders mentioned, and they have a limited runway of 6-8 months. The company requires continuous investment to sustain operations.
- Opportunities: The stricter regulations on plastic use may drive demand for alternatives. It has the potential to expand into new industries and international markets.
- Threats: Existing alternatives like paper-based products and their cost may hamper the company’s sales. The startup must convince consumers and industries to switch from traditional thermal to new material.
Read More at:
- Jewel Box: A Leading Lab Grown Diamond Brand in India 2024
- The Story of P-Tal: An Ayurvedic Kitchenware Brand from Shark Tank India Season 3
- Analysis of Shark Tank Canvaloop: Converting Agri-Waste into Fiber
Conclusion on Dharaksha’s Eco Solutions:
Dharaksha Eco Solutions is making great strides in creating a greener future with its innovative, eco-friendly packaging materials. Turning crop waste into a useful product addresses significant environmental issues like air pollution from burning straw and the long-term pollution caused by thermal.
Despite facing challenges like higher production costs and the need for better technology, Dharaksha is on the right path. They have strong support from investors and a clear plan to reduce costs and increase production.
With growing awareness and stricter laws about plastic use, Dharaksha is well-positioned to meet the increasing demand for sustainable products. Their commitment to innovation and sustainability makes them a promising player in the green packaging industry, working towards a cleaner, healthier planet.
