This agritech startup’s farming-as-a-service is impacting 25,000 farmers
The shortage of labour in the agriculture sector in the past few years in India has been a rising cause of worry. While the percentage of people working in the sector is declining, it remains the main sector of employment in the country.
According to a report by Statista, about 41.49 percent of the workforce in India was employed in agriculture in 2020.
Apart from battling labour shortage, the farming community also finds it tough to source machinery from agents.
It was to help farmers access labour and machinery in a timely manner to make farming viable that Dashmanth Reddy, Mithil Gandhi, and Nitin Razdan started Ujjay in late 2016. The Hyderabad-based startup has created a technology platform to enable farmers by providing a one-stop solution for all their farming needs.
“We came up with FaaS (farming as a service) to help farmers. We work with farmers by providing land preparation equipment. We have started adding services across the value chain, and are mainly focused on pre-harvest services,” Dashmanth says.
As of now, the startup offers crop advisory, product (tractors and tillers) services, and mechanisation services to farmers.
The three co-founders are MBA batchmates from SP Jain Institute of management and Research (SPJIMR), Mumbai. The trio worked in the software industry and the corporate world for 10 years before starting up.
According to the founders, rural folks are using smartphones, but have no access to services that can help them prepare their land for harvest.
Between 2015 and 2016, the trio began spending time in rural Telangana to understand the real challenges of farmers, and came up with the idea of building a platform.
Ujjay approaches farmers in a phygital way. Farmers can get in touch with the startup through a mobile app/call centre and partner networks, which act as their last-mile service partners.
“Companies have tried to do FaaS with mechanisation and failed because of scalability issues, limited value addition, and failure to ring fence the farmer. We have arrived at a narrow thesis for the selection of crop-specific assets, which are adding value across the value chain and, when combined with an institute (say an NBFC or Channel Partner) willing to own the asset, gives attractive returns to the pre-harvest machine or asset owner as and adds to the realisation for the farmer,” Mithil says.
Farmers are onboarded onto the platform by accounting for acreage and type of crops grown. Once onboarded, they can map asset utilisation, line up evacuation/processing of their produce, and input application.
Currently, the agritech startup operates in Telangana, Andhra Pradesh, and Maharashtra, with 25,000 farmers in their service network. Farmers in these states can avail solutions for their entire crop life cycle with a simple “missed call” or through their Android app.
The business and challenges
The farmers have to pay an advance fee to Ujjay, which is less than Rs 150 per month, to get access to pre-harvest services on time. The startup also makes money by selling farm produce, and providing products and services to the farmers.
The founders bootstrapped and started up by investing Rs 25 lakh, and claim their top line reached Rs 2.8 crore in FY20.
“While there are several ways to add value to the farmer across the value chain, scalability and market size for each opportunity must be kept in mind while venturing further than a pilot. We faced these challenges first hand and overcame them; this reflects in our numbers as well.
"We grew 1.5X from FY18 to FY19 while growing organically; we grew 6X the following year by introducing channel partners and technology in the ecosystem," Nitin says.
“Our model creates value for farmers to grow crops others than cereals. We see farmers growing fruits and vegetables to increase their revenues; this gives us an opportunity to give them better realisation of produce,” he adds.
Going forward, the startup wishes to add more value in post-harvest processes to further increase realisation for the farmer.
Plans for the future
By 2025, the startup aims to bring services to five million farmers, with access to financial services along with its existing offerings.
In the next 18 months, the startup also plans to raise its first round of funding and expand in crop-specific geographies in southern India and Maharashtra, with a focus on adding value in the processes after the harvest of the produce. It also wants to increase its financial services to farmers in association with an NBFC.
The company, which competes with BigHaat, DeHaat, and PEAT, is hoping to close its revenue at Rs 6 crore.