[Matrix Moments] DeHaat, Ninjacart, WayCool, and VeGrow founders reveal how to grow an agritech startup
In this episode of Matrix Moments, the founders of agritech startups DeHaat, Ninjacart, VeGrow, and WayCool discuss what it takes to build an agritech startup with Tarun Davda, Managing Director, Matrix Partners India.
“Most of you know we had over $250 million of growth capital that has been invested into agritech startups in 2019 alone. Most recipients of that capital are on this panel. Several agritech business models have seen a rapid scale-up over the last few years in India, which highlights the vast opportunity and further strengthens our thesis on investing in this space,” said Tarun Davda, Managing Director, Matrix Partners India.
India is a largely agrarian nation, with the agriculture sector accounting for more than 15 percent of the country’s gross domestic product (GDP) and providing employment to 50 percent of its workforce.
“So, not only is it a financially important part of our economy; it’s also a very strategically important part of our economy,” said Sanjot Malhi, Director, Matrix Partners India.
However, the space has been riddled with inefficiencies and a broken supply chain. But now, everyone from the farmer to the distributor to the retailer and the end customer - is now connected.
The stage seems set for a digital revolution in agriculture.
Understand the core problem
Shashank Kumar, Co-founder,, believes it is important to “bound the problem a little”. He says there are areas like product category specialisation, channel or end consumer specialisation, or a geographic specialisation.
“We’ve chosen to be geographically focused. It’s very important to bind the problem because we’re talking about multiple hundred supply chains and it’s not one size fits all. Some access needs to be bound to get a better PMF and use money more effectively,” he explains.
Shashank was earlier consulting in the supply chain and had some exposure of one end of the food chain while Karthik Jayaraman worked with mainly retail chain and FMCG players.
“I come from a rural background so always had exposure to the other end of food chain - the farmer’s side. Somehow I could not understand the gap between the value chain; that was the trigger point,” he says.
The team at DeHaat worked from ground zero, going to villages - this changed their perspective.
Avoid working like an engineer
Shashank says the problem for any individual farmer in India begins at the start of the season. ”If you’re planning to aggregate any vegetable or rice, you will realise that 10 different farmers in the same village are growing six different varieties of the same crop and following five varied agricultural practices. So how you will aggregate? That’s how our journey started,” he says.
Shobhit Jain, Co-founder,, says working at ITC Agri gave them a good opportunity to work on the ground. Like most engineers, Shobhit explains they worked on seeing what equation worked. But, agriculture is different.
“That kind of teaches you that you really need to trim down and focus. I got that experience and it helped us trim our scope,” Shobhit says. He adds that one of the decisions they made was they would not be a big portfolio company.
“So, we will not have 200 SKUs ; we’ll work with a few SKUs. What this means for us is we can never play in the field where some of the biggies are playing. We can never sell to end consumers, end retail, or the end pushcart segment because all of them want a portfolio and I cannot deliver,” Shobhit says.
Focus your vision
Thirukumaran Nagarajan, Co-founder,, says the startup began by being everywhere - serving a local kirana, a restaurant, a big chain of hotels, and more.
“We figured out that serving every customer segment needed a very special supply chain and that we were all over the place. We had to take a very difficult call to cut down 40-50 percent of our demand at that time. We grew by 50 percent by focusing on only one supply chain,” Thiru says.
That helped the team to scale. He adds Ninjacart is customer segment bound, in the sense that what is the value proposition it could offer local kiranas? The team then started building its supply chain for that.
“To give you an example, say onion is priced at Rs 10 per kg. Even if you get 40 percent margin, I make only Rs 4 per kg. It doesn’t make sense if I had to transport it all the way from x to y.
“We felt that absolute margin is what matters. Absolute margin per kilogram is what matters and not the gross margin per sales value” Thiru explains. “It doesn’t stop there; it’s also extending into how we can collaborate to make sure the full loop is addressed.”
Karthik Jayaraman, founding team member of WayCool, explains that in the last year they started working with many startups to help the farmer with inputs and advisory rather than doing everything on their own.
“We’re working with a startup that does soil health testing and another that does optical grading of produce. It doesn’t make sense for us to introduce soil health or lending as a feature equivalent.
"What we’re doing is hard enough and we need to pick which part of the supply chain we choose to operate in. We have chosen the demand connection space; we do have extensions in the back but orchestrate those rather than operate them,” Karthik says.
Edited by Teja Lele