This agritech startup helps commodity farmers grow profits by 200 pc, and directly sell to Reliance, BigBasket, Grofers, others
During the Union Budget this year, ‘agriculture’ and ‘agritech’ were in focus, uttered quite a few times by Finance Minister Nirmala Sitharaman in her speech. It is hardly surprising given that agriculture continues to drive the Indian economy, with close to 60 percent of the country’s livelihoods dependent on it.
Agritech, meanwhile, is the new darling, and the government wants to foster the growth of startups (about 450 of them) in the sector with various initiatives.
Investors are also interested in the sector, having pumped in over $248 million in agritech startups in H1 2019 alone, according to a recent report by Nasscom. That is a 300 percent growth over last year. The report adds that average incomes of farmers have grown 1.7X in the last decade.
Now, that is impressive, but not enough.
Or so believe Akash Sharma and Abhishek Agarwal, Co-founders of TechnifyBiz, a B2B agritech startup, that promises to increase farmer incomes by 200-300 percent. That may be an audacious claim, but not an impossible one.
Akash and Abhishek, both IIT alumni, run a team of 16, are working with tens of thousands of farmers to make this a reality.
How TechnifyBiz helps commodity farmers
The founders launched TechnifyBiz in mid-2017 to organise the agri supply chain so that the processing of non-perishable commodities could be done directly by farmers. After that, they are provided with forward market linkages that allow them to bypass middlemen and sell directly to the likes of supermarket chains, processed food manufacturers, and confectioneries, and eventually, increase their incomes.
In two years, the Delhi-based startup claims to have increased farmers’ profit margins by 200 percent. At present, TechnifyBiz offers 10 commodities: makhana, cashews, almonds, raisins, walnut, quinoa, chia, pista, sunflower seed, and watermelon seeds.
“We have plans to take it up to 50-60 commodities in the next two years with about 100,000 suppliers,” Co-founder and CEO Akash tells YourStory. “But we’ll stick to non-perishables because that sector is most fragmented,” he adds.
The middlemen that TechnifyBiz eliminates include brokers, wholesalers, and mandi traders. Farmers can work out the daily rates of commodities themselves and input them on the web-based platform created by the startup.
Customers can view these rates in real-time, and place wholesale orders, which are then delivered to their doorstep by the startup.
Operations, revenues, and partnerships
TechnifyBiz claims its customers include food industry heavyweights like Big Bazar, Metro Cash & Carry, Reliance Retail, Haldirams, Grofers, BigBasket, and Flipkart. Farmers can sell directly, in bulk, to these companies, and earn the best profit margins on every commodity.
“Our initial idea was to build a farm-to-fork venture. But then, we thought we could help farmers with their post-harvest commodities. We have had our fair share of learning in the past two years and are now looking to achieve three things: better utilisation of food processors, improved farmer incomes, and a well-distributed commodity ecosystem.”
TechnifyBiz claims a monthly run rate of Rs 7 crore and says it has grown at 70 percent in the last four to five months. “We’re targeting Rs 1,000 crore in two to three years,” reveals the co-founder.
The B2B startup is operational in six to seven agri clusters in Bihar, Karnataka, Rajasthan, Andhra Pradesh, impacting over 15,000 farmer-lives. Over 1,500 large orders have been processed on its platform so far.
Not only has the company helped improve farmer incomes, but it has also partnered with undisclosed NBFCs and banks for commodity financing.
Additionally, by roping in local, route-specific transporters and logistics providers, it has ensured timely deliveries for the end customer.
“We do not want to create the [commodity] market, we are just organising it so that everyone is paying the right price for what they are getting,” Akash says.
Overcoming challenges, and ecosystem support
Surely, organising an “asymmetrical” market doesn’t come easy. “Reaching out to the right set of farmer groups has been our biggest challenge,” says Akash, adding, “But, once you have certain use cases for even one commodity, the story gets circulated very quickly as it is a very small ecosystem.”
For TechnifyBiz, that commodity was makhana that helped establish its value to both farmers as well as buyers. “Now, almost all makhana farmers approach us,” Akash notes.
The startup began operations out of a modest flat in Delhi’s Malviya Nagar. However, once the founders moved into the incubation space of Indigram Labs in August 2018, it scaled quickly. Besides gaining from Indigram’s vast experience in agritech, TechnifyBiz was also mentored and backed by R Narayan, Founder of Power2SME, and Rajneesh Gupta, Director at Aakash Namkeen (wholesaler of snacks and savouries).
It is looking to close a Pre-Series A round of Rs 15 crore “shortly”. The startup plans to utilise the capital by investing in technology, getting into newer commodities, adding suppliers, and improving market linkages for farmers.
Talk about competition, Akash asserts, “In the organised market, there is no one. In the unorganised sector, competition comes from kiranas.”
But, for a company that wants to transform India from an agri economy to an “organised agri economy”, that is hardly a deterrent!
(Edited by Saheli Sen Gupta)