The plant that could be used as a psychostimulant could also be converted to biofuel that would be eco-friendly. It could be used to line the walls of the exhaust pipe of a motor bike which would spew less carbon. It could be converted to wood as an alternative to timber, to fabric. Karan said, “There are more than 50,000 uses of this amazing plant that incidentally has its origins in India.”

So, in tune with his fascination of hemp, he made a serious commitment and set up the Awega Green Technologies LLP. As is customary for every startup founder, he went around the country and the world showcasing the products that he had developed. But his fascination was being slowly nibbled at by reality. “We had licenced our fuel-making technology to an American company SRS Biodiesels, our exhaust pipes were earning us just ₹500 each so we understood that these were commodities that had low profit margins,” he said.

The pivoting moment

But he found other opportunities from hemp. “We were at an exhibition in Bharat Tex 2024, New Delhi, when Helen Lee visited our stall where we showcased our biofuel, exhaust pipe and the wood alternative. Lee was from South Korea and she told us how hemp was used in cosmetics too. She explained how we could explore all such possibilities in collaboration with Yuhan Care Corporation, a South Korean Company.”

Karan once again felt the excitement he did when he watched that TV show in 2012! And again, he did studies on cosmetics and skincare. The results were not just encouraging, but stupendous!

“The cosmetics industry is expected to grow as globally the natural care cosmetics market is on an increase from ₹2,69,507 crore in 2022 to ₹4,23,787 cr by 2027 at CAGR growth of 9.5%. Moreover, it is an industry that will never have demand problems. Women will use skin care products and cosmetics, no matter what. And importantly South Korea is pioneer in this industry,” he said.

And, specifically, Yuhan Care Corporation, the company that Helen was talking about, has a valuation of ₹72,927cr !”

Lower returns on the commodities that he had launched as well as the prospects of an industry that would not see the sunset made Karan pivot to hemp-based cosmetics and skin care products. But the question is why a ₹73,000-crore company would get into a joint venture with a tiny little startup whose current evaluation is ₹16-crore and had so far invested ₹42 lakh on its various hemp-based products? What’s in it for Yuhan Care?

Reason the elephant chose to partner with the flea

Karan said, “As it happens, labour in South Korea is very expensive. In addition, they have several hurdles to accessing the raw material for their hemp-based products. Cultivation of hemp is permitted only in Andong, an island in South Korean. The rules there are so severe that when one leaves Andong city, you have to dust off every speck of the hemp plant. If even a tiny bit is there on your person, then you face a jail term!”

In India, hemp cultivation follows the different rules laid down by the states. It is grown in Uttarakhand, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Sikkim and Jammu and Kashmir. In 2017, Uttarakhand became the first state in the country to legalise industrial hemp cultivation. “Our joint venture (JV) will invest ₹300 crore for the cultivation, processing and product manufacturing in India. This should also boost employment under Make in India scheme,” he said.

So, labour and procurement of raw material was a serious issue. But then Yuhan could tie up with any large cosmetic manufacturing company, couldn’t it? Why Awega? Karan said, “Our skills lie in our understanding of the entire hemp ecosystem. Perhaps our work in biodiesel, wood, etc made us understand very clearly how the procurement of hemp which, by the way is also strictly regulated here, works. We understand the value of the plant, its behaviour and have some experience with the markets as well. This is something most large companies, in my opinion, may lack because they have not yet opened up to the possibilities of hemp. Given this, we at Awega signed a memorandum of understanding (MoU) with Yuhan Care Corporation manufacture and market hemp-based beauty care products in India and export. This and another very important factor that helps is trust. Yuhan trusts us to not misuse their intellectual property (IP) rights and technology.”

Scaling up

Up until now, Awega either sold its technology or had outsourced the manufacture of their other products. Their capability in large-scale manufacturing is nil. How will the startup manage to swing this humungous task? Karan is rather optimistic.

“We will have to invest ₹300 crore to set up our manufacturing unit. Yuhan Care and Awega will both invest fifty per cent each. The plan is to set up the manufacturing unit in Himachal and packaging plant in Mumbai or Pune. But we will have to do our procuring from Himachal Pradesh. The government there has understood the possibilities that hemp offers and allows cultivation only to licencees,” he said.

According to Karan, Yuhan Care’s hemp-based skin care products under the brand name Hevoir are superior to any other similar skin product. “There are some that market hemp-based skin care products and cosmetics. However, they outsource their manufacturing. Hevoir has an in-house R&D team that has spent years in developing these products and six years in just doing clinical trials at KFDA (Korean Food & Drug) approved unit.

We aim to offer our clients the superior benefits of hemp as well as their innovative research that aligns with the global demand for environmentally responsible products. In fact, our other venture before we pivoted to this industry can help Hevoir with respect to packaging as we will produce packaging material too based on hemp.”

How will he raise the funds he has to invest as a JV partner? How will he market the products are not issues that cause too much worry. Karan said, “I have already spoken to some investors, and those based in Dubai are keen to invest in the new opportunity.”

Regards marketing? “We did an initial market survey and asked distributors of such products about Hevoir. They cannot seem to wait for it to reach India, basically because South Korea is well known for its beauty products and cosmetics,” he said.

Looks like he will successfully ride this wave of enthusiasm for Korean products made in India globally.