Father-son agritech startup EM3 grabs $10 million from Global Innovation Fund
EM3 AgriServices, the farming-as-a-service (FaaS) startup, based out of Madhya Pradesh and Gujarat, has raised Series B funding of $10 million from London-based Global Innovation Fund (GIF) and existing investor Aspada.
Rohtash Mal was 63 years old and had retired after 37 years in the corporate world when the idea for a startup struck him. His US-educated son Adwitya Mal working in Hong Kong asked him a simple question, "Would you be interested in doing something meaningful after your retirement?"
“Usually, after you complete 37 years in the corporate world, you think you have had enough. But then there is always the opportunity to do something bigger, meaningful and impactful,” says Rohtash. The idea for a startup evolved from Rohtash’s stint in the farm equipment industry, which was a high cap intensive business.
He found that small farmers could barely afford high-cap equipment and often took loans to buy them. A small farm generally has a small P&L, which makes it difficult for people to repay their loans.
“The idea initially was to help farmers rent equipment. But with time, we realised that an Uber-like model where modern, affordable farm technology services are provided on a pay-per-use basis and on demand works better, ” explains Rohtash.
Cashing in on this demand, the father and son duo started EM3 in 2014. It provides farm services for the entire cultivation cycle on a pay-per-use basis. Their central agenda is to increase farmer prosperity by offering farm mechanisation and agricultural services that are easily accessible and affordable.
EM3 offers its services under the brand name ‘Samadhan’ in Madhya Pradesh and is in the process of setting up its franchise model in state and Rajasthan to bring its solutions to every step of the farming process – from soil preparation to harvest, for the entire year.
However, the task wasn’t easy. The duo was venturing into a new and different sector. Explaining this, Adwitya says:
“Coming back to India wasn’t a problem. It was something I was looking forward to. For me the fundamental shift was the change in my professional lifestyle. It was a big leap from boardroom strategies to understanding the needs of farmers. Living in urban India you don’t realise how the rest of India lives. It isn’t better or worse, just different. You get to learn more about life, professionally and personally.”
EM3 offers an entire range of global farm equipment — from the laser-levelling machine, which levels the ground with precision; the MB Plough for deep ploughing; to the power harrow to make seed beds. Adwitya adds that for the past six to eight months, working with different governments has helped them work better with the farmers.
The platform leverages technology, mobile telecom services, financial services and cloud technologies to increase its reach of farm mechanisation and therefore enable true digital empowerment of the farmers.
The farmer-facing dedicated App allows for an intuitive, convenient and easy way for farmers to order farm equipment and services, along with a built-in option of paying online. Once its franchise centres are operational, the digital platform will enable orders to pass on to the nearest franchise, through location-based mapping.
With this current funding round, EM3 is looking at expanding across the country. The focus will be to boost ecosystem capacity and invest in building technology. The company has also partnered with the Rajasthan government to provide services to farmers across the state. This is the second round of funding for EM3, the agritech company. The company had earlier raised a $3.3 million Series A from Aspada in June 2015.
With two-thirds of India's farms smaller than a hectare, most of the small-hold farmers rely on manual labour as they cannot afford capital equipment such as advanced farm implements, tractors and harvesters.
Solving the larger problem
EM3 provides a solution to this problem by offering an entire range of interventions, from soil preparation to harvesting, where farmers pay a service fee on a per hour or per acre basis. These services are cheaper than hiring manual labour, with service levels guaranteed by the company.
Rohtash adds that in India, where average farm holding is under three acres, farm labour is scarce and wages are on the rise, EM3's pay per use affordable, transparent, efficient and on-demand model, enables farmers to deploy the latest in mechanisation technology without any investments in the asset.
Agriculture still accounts for 22 percent of India’s GDP. According to an IBEF report, several players have invested in the agricultural sector in India, mainly driven by the government’s initiatives and schemes.
Agritech startups like BigHaat, Truce and CropIn, have raised funds from Ankur Capital and Agrostar has received funding from Aavishkar. There is also BigHaat, an agritech e-commerce company and the Accel backed Ninjacart.
Alix Peterson Zwane, CEO, Global Innovation Fund says that he sees EM3 as a market leader in the Indian agricultural space. Kartik Srivatsa, co-founder and managing partner, Aspada adds:
"Over the last two years, EM3 AgriServices has emerged as a leading independent farm services player in India. We are now embarking on the next phase to rapidly scale the FaaS model as well as our mobile platform for small-hold farmers to access services across the agriculture value chain. The company's proprietary access to farm level data through its operations places it in a unique position to become a canonical leader in the sector."