[Startup Bharat] This couple took inspiration from CarDekho to bootstrap a tractor-marketplace, made it profitable
In Tier II and III cities, the value chain for the purchase of farm machinery is typically opaque, with dealers often hiding the original price of the machinery. The tractor market in India now has one million used tractors sold every year, and it is expected to reach two million by 2025.
Rajat Gupta saw this as an idea he could scale. He observed that tractors were being sold at higher prices and the right information on pricing was not easily accessible by farmers, owing to issues like lack of data access. Due to rampant corruption, farmers were often cornered to cheating without their knowledge.
After doing a lot of online research, he realised there were not many marketplace aggregators for tractors. This led him to start Tractor Junction in Alwar, Rajasthan, in September 2016.
“Tractor Junction aims at revolutionising the Indian tractor industry by bringing transparency on pricing, information, and comparison of tractors, farm equipment and related financial products,” Rajat says.
How did it start?
Born in a family associated with tractors from the early 90s, Rajat was working with his family’s tractor dealership business in 2011 and 2015. Thanks to this gig, Rajat gained a deep understanding of the industry and its challenges.
With a BTech in Computer Science engineering from Amity University in Noida, he joined the family business soon after his Bachelor’s. His wife Shivani Gupta comes from a family of agri traders with deep connections in rural Rajasthan.
With Rajasthan being an agriculture-focused state with a large market for tractors, Shivani, who has done her Master’s in computer applications, helms the technology and digital marketing at Tractor Junction. She also did MCA from GECA in Ajmer.
“While working in the family (business), the idea for Tractor Junction struck, and I shared it with my friends and family. Gaon me bijli toh aati nahi, tractors kaun online dekhega (There is no electricity here, who is going to check out tractors online?),” was their response, he says.
When they launched Tractor Junction in 2016, they saw nearly 3,000 visitors on the website initially. The couple then ran the platform from a bedroom until February 2018.
They landed their first customer in January 2017, and opened the first office in February 2018. Now, Rajat, the CEO of the startup, claims they are getting five lakh visitors and 15 lakh impressions month-on-month. He further adds that they are now working with seven tractor manufacturers and over 200 tractor dealers.
The model and the market
The startup gets its revenue comes from selling insurance on new tractors and farm equipment. It also acts as an NBFC, selling credit products for new and used tractors on the website.
Rajat says that the website is full of engaging content, both technical and farming-related, and has been attracting a lot of traffic. He calls this traffic unprecedented in the farming ecosystem.
The Tractor Junction YouTube channels reports 7 million farmers visit with more than 15 minutes on each content view. The average time spent on the website is 5 minutes. Today, the startup reports to be clocking around $1.5 million in annual recurring revenue.
The startup claims to be a full-stack player in the industry offering customers new and used tractors, finance and insurance, while competitors like KhetiGaadi, Vicky.in and Mahindra-owned TractorBaazi.com focus on lead generation.
“Massey is the most preferred brand for tractors in Rajasthan, because of which the dealers sometimes take undue advantage by charging more. A typical Massey tractor in Rajasthan is sold in the range of Rs 5.75 lakh to Rs 6 lakh per tractor. We have been able to help the sale of about 700 Massey tractors in Rajasthan, and farmers have been getting benefits of up to 7 percent in each transaction, thus reducing their costs,” says Rajat.
As of today, the startup helps all players in the ecosystem - farmers, manufacturers, dealers, used tractor brokers, and also aids customers with finance and insurance.
“We now have one centre in Alwar where we did over 50 full transactions in the past five months, and we are planning to open 12 more physical centres in the next year to approach farmers directly,” Rajat adds.
Technology and way forward
Simplifying the process of buying a tractor was challenging initially as everything was done in-house using open source tools like Java, PHP, MySQL and JQuery. Of late, the startup has started to outsource specific projects to big data technology firms.
“We focused on improving and constantly updating our information database and searching for precise insights, which was a painstaking process,” he adds.
Though scalability was an issue with the initial versions of open source tools, with the use of open-source technology, the team was able to keep costs under control.
Rajat also had to convince tractor dealers, who were still driven by salesmen and mechanics through offline channels. The process of convincing them of the potential of digital technology was not easy.
“Constant engagement by Tractor Junction and falling footfalls at showrooms led many dealers to finally sign up,” he says.
Tractor Junction got accepted into accelerators like Rockstart AgriFood in Copenhagen and Indigram Labs. The company bootstrapped with a capital of around $200,000, which it is using to expand its used tractor business.
“A major focus is going to be on the used tractor business for the next two years, for which the pilot was successful. The goal is to make revenues worth $30 million in the next three years,” Rajat says.
(Edited by Suruchi Kapur Gomes)