Agritech will benefit from B2C, fintech expansion beyond top 20 Indian cities
The B2C and fintech wave will usher in more smartphone users in farming communities, noted Shashank Kumar, Co-founder and CEO of DeHaat, on Day 4 of TechSparks 2021.
Agritech will benefit from the rapid growth of B2C internet brands and the fintech boom beyond India's top 20 cities, said Shashank Kumar, Co-founder and CEO of agritech platform DeHaat, on day 4 of TechSparks 2021, India's most influential startup-tech conference, hosted by YourStory.
With the theme 'What's Next: Rethinking the future', TechSparks 2021 is providing a platform for the most defining conversations on how disruptive technology innovations can shape our lives post-pandemic.
"Agritech has an indirect overlap with the digital frontend, as B2C brands find markets beyond metros and large cities. The question then arises: can we have a reverse backend for supplies?" Shashank told Ramarko Sengupta, Senior Editor, YourStory.
DeHaat is a fast-growing agritech venture with operations in Bihar, Uttar Pradesh, Odisha, and West Bengal. It has 650,000 farmers on its service network.
Speaking on 'How the pandemic changed the agritech landscape', Shashank pointed to the migration of workers from cities to rural areas during the two COVID-19 waves.
"People, who migrated and had to go back to their villages, found agriculture to be a sustainable source of livelihood," Shashank said.
DeHaat has 1,890 centres, or franchises, which help farmers get access to agri-inputs, and that coordinate the sale of their crop-produce to institutional buyers.
During the pandemic, different stakeholders in agriculture acknowledged the value of a robust backend, Shashank said. "On the user side, because physical connectivity was not an option, everyone switched to the digital interface by default,” he added.
Shashank delved on the estimate by strategic consulting firm Bain & Co of agritech generating between $30 billion and $35 billion of value by 2025, across areas like agri-logistics, offtake, and agri-input delivery.
“By then, we are targeting a total market cap of $4 billion, and will aggregate more than 30 million farmers and their farms through technology and a digitisation-based approach,” he said.
On the agri-inputs side, DeHaat has grown to supplying 150 brands, and 4,000 stock-keeping units (SKUs), while the agritech platform aggregates 34 crops on the output side, compared to five crops three years ago. This has helped it attract more farmers to DeHaat, he said.
Shashank cited the instance of how DeHaat is demonstrating impact to reduce post-harvest losses. "Based on pre-harvest data, we are trying to aggregate the market demand before the physical or real harvesting begins," he said.
However, he rued that farmers are still unaware of market demand, and that agricultural practices need to be synchronised with market demand in terms of timing and quality.
The deeper problem is India’s splintered supply chains, he said. There are nearly five or six layers of intermediaries between farmers and retailers, most of whom operate without real-time information.
"Agritech companies are working around these issues, by offering right tech or data to reduce the problem of information asymmetry," he said.
Shashank reflected on DeHaat's journey, and why they evolved into a full-stack agritech platform.
Initially, the company began in Bihar with a mission to aggregate produce from farmers, and send it to big markets. "However, at the ground level, we saw 10 different farmers, growing six different varieties of the same crop, and following four or five different agriculture practices. How could we aggregate?”
This is when DeHaat changed its approach, moving from aggregation to creating an end-to-end solution for farmers. The founders redefined the problem-statement: to focus on the supply chain pain-points related to agri-inputs, crop advisory, financial services, and crop monitoring.
"We want to bring everything related to agriculture under one roof," he said. DeHaat is now exploring use cases in mechanisation, and spraying facilities on a pay-per-use basis.
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