Like most college-goers, Shwetank Jain had an encounter with smoking when he was just in his 20s. It was the early 2000s, and hookahs had just been introduced in the high-end cafes of New Delhi. However, instead of just puffing it off, Jain decided to make it a mini-career.
He realised that there was demand for the fancy hookahs – also known as shishas – among college students, but few could afford to hang out at the high-end pubs. So Jain started sourcing shishas for small cafes in the city’s popular students hub – North Campus – to make a little pocket money.
He wouldn’t sell the shisha, but would place them in the small cafes for customers. For every order, he would give a cut to the cafe owners.
Eventually, Jain stopped the hookah venture and went on to complete his masters in the US. He returned and joined the family business, handling the export of bedsheets and curtains to Ikea and Walmart. He also started distributing tobacco products such as lighters, bidis and cigars with a friend.
Almost after a decade and a half, Jain launched his startup Hash in 2019 – life has come full circle for him.
Hash has its own brand of cigarettes, which it supplies to retailers. The manufacturing is outsourced. Next, Jain plans to start a marketplace for non-tobacco but smoking-related products.
“I wanted to do something in tobacco, like what Bira did to alcohol,” Jain told Moneycontrol, adding that there were three layers of distribution channels for cigarettes that were all unorganised and he wanted to fill that gap.
Hash recently raised $3.5 million in a fresh round of funding from Armac Investment Fund. The funding round included marquee angel investors Kunal Shah, founder of Cred; Jitendra Gupta, founder of Jupiter; Ashneer Grover, cofounder of BharatPe, and Ankur Jain, founder of Bira91.
However, in a world that’s pushing for greater environmental and social governance, a new-age consumer brand such as Hash could face moral and existential questions.
According to a report, 14.84 percent of adults aged 30-44 consume the most tobacco in the nation, followed by 14.7 percent of young adults aged 20-29. Tobacco use is a major risk factor for chronic diseases, including lung disease, and accounts for almost 1.35 million deaths in India every year.
“I do not smoke and would love for others to quit,” said Jain, adding that it is, however, a business at the end of the day. He says that’s why Hash’s product portfolio is diversified, with 68 percent of the business from non-tobacco products.
Hash sells cigarettes, hookah poles, lighters and rolling papers, among other things. The average price of a small cigarette pack starts at Rs 99. Packs come in flavours like paan and rajanigandha and claim to have the lowest nicotine content globally.
The startup plans to digitise small shop owners and paanwalas in the country. Selling paan is a cash market. Most such shopkeepers don’t have a goods and services tax number or even a bank account.
Jain understands that to sell his products, he needs to organise the layers, especially the distribution segment of the market. Hash has already started geotagging the paanwalas.Did he have difficulty convincing the investors? Not really. According to Jain, when the investors understood that the company had the potential to organise the paanwalas, they were willing to put in the money.