In 2018, the Indian government came up with The National Policy of Biofuels. It was started to focus on the reduction of import of biofuels and to promote a cleaner environment. This meant a space had opened up in the country for companies focusing on biofuels to start up.
Seizing this opportunity, Kishan Karunakaran, who already had a background in the biofuel industry, started Buyofuel in 2020 along with Prasad P Nair, Sumanth Kumar Selvarasu, and Venkatesan Selvam.
Based in Coimbatore, the company worked as an online business to business marketplace to trade biofuel-based commodities. The platform allows various stakeholders like raw material aggregators, waste generators, manufacturers, and consumers to connect with each other.
Currently, it has around 1500 users out of which 30-40 are large corporate companies as consumers. Companies like Seshasayee Paper & Board, TVS Group, Thermax, ITC, UltraTech Cement, Dalmia Group, JSW Steel, etc. are among its corporate client base. The platform offers products such as sawdust, coffee husk, cashew shell, bagasse, woodchips, groundnut shell, rice husk, biomass briquettes, pellets, biodiesel, plastic oil, and bio furnace oil.
The biofuel marketplace has three main stakeholders- wave generators, biofuel manufacturers, and fuel consumers. A wave generator could be a farmer, agro processing industry, or any producers of organic biomass that can be converted into fuel.
These wave generators are small and fragmented; Buyofuel’s sourcing team locates and connects these organic biomass producers to the manufacturers. The company sales team then connects with consumers of fuel seeing if they are interested in switching current fossil fuels to biofuel. They then connect the biofuel manufacturers producing biofuels to the consumers and thereby supply.
Most of these products are manufactured on demand thus omitting the storage process from the company’s side. It primarily operates from seven different states- Tamil Nadu, Karnataka, AP, Telangana, Maharashtra, Goa, and Punjab NCR. A major part of the market is based in Maharashtra and Tamil Nadu.
Explaining the success particularly in the two states, CEO and spokesperson of the company, Karunakaran said, “I previously had my biofuel manufacturing company in Tamil Nadu, so it was easy to get clients there. Maharashtra is easily the largest biofuel market in India but Punjab NCR has also been a revelation.”
Currently, Buyofuel’s primary revenue stream is solely derived from the sale of biofuels, but it is looking at introducing carbon credits as another stream of revenue. In its first year, the company recorded a revenue of Rs 78,000, in FY21 it grew to Rs 56 lakhs, and last financial year it clocked in a revenue of around Rs 20 crore.
With plans of hitting exports in the next six months to be a cross border marketplace and carbon credits generator, it is looking at Europe as a suitable marketplace because of the large market interest for biofuels and its policies.