The untapped opportunities in agritech

Matrix Team
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Welcome back to episode 5, the last episode of this series. In today’s episode, we talk about the unsolved opportunities in the agri-tech space. We have with us Thirukumaran Nagarajan, co-founder of Ninjacart, Shashank Kumar, Founder & CEO, DeHaat, Karthik Jayaraman, Co-founder of WayCool and Shobhit, Co-founder of VeGrow. The conversation was moderated by Ankush Goyal, Sanjot Malhi & Tarun Davda who look over the investments in the agri-tech sector for Matrix Partners India.

Sanjot:

Guys, I have a more open-ended question sort of forward looking if you will and whoever wants to answer it please do. Shashank earlier mentioned that one of the blessings and the curse in agri is how much you can actually do. So if you guys were to startup today and this is for –- some of the founders that are watching, what would be the one problem other than yours that you’re solving, would you pick and where would you want to build a business, where do you see an opportunity that’s not been solved in agri?

Shashank:

Maybe I can tell you. So again if I just extend the question if you’re trying to ask, Sanjot, that even in India when there are more than 200 or 300 agri-tech startups working but still what are the key areas where people should still aspire. So having a common thought that still lending, insurance, all these things are still quite early in India and you will not find many people working or having a tailor made model for farmers be it the model related to vegetable aggregation or agri input selling or contract farming for that matter. In a way this credit part or getting access to capital for farmer that’s an important aspect.

So that is one area where definitely there is a gap and most of the people including us whenever we think about adding or integrating financial services but still it’s a kind of a more like a bundling thing. So, yeah,-- I think model around credit, insurance, some sort of deep tech to monitor even land parcel of small farmers I think that is one area where there is a gap. We do have technology where you can monitor the crops spatially but still in terms of accuracy and when you especially talk about small holder where probably your farm size will be as small or as large as a cricket pitch I think accuracy is still missing.

Shobhit:

So for us I think honestly we just started so I think we’re very clear on this aspect of the supply chain but I agree with Shashank that financing at farm end is very critical and to be honest we initially thought that that could be one of the hooks to start this business but the only challenge that we saw in that aspect to start with is that the organized output sale is very limited.

So what happens is you end up selling to farmers and unless and until obviously which is a very unorganized market today and you end up giving credit to farmers and recovery becoming such a difficult aspect for such huge customer base, the profiling, credit score and all the details is just not available. That was the key challenge and this I thought I must say three, four years back when I was at ITC looking at financing the farmers and we were working with banks at that point of time. And I thought why shouldn’t I do it myself - getting insurance and then obviously get the hook and then we sell the produce. My challenge at that point of time and I think now that more organization is coming in at the output space the people who can guarantee or assure you obviously your back sale or kind of commitment and that would become very, very attractive.

At that point of time obviously I felt that it’s too unorganized as a market for recovery to happen and the effort would be too high for the recovery and the economics would not work, just have to spend too much money there. But I also align with Shashank that’s an unsolved problem and that more organization coming in contract farming or output, something very interesting is called for.

Ankush:

Thiru, you were saying something? Please go ahead.

Thiru:

Actually to answer the question like if you had to do it again how do you position yourself, what would you do kind of question actually we never chose the space and we entered. So we were doing something and then that modified into something and then finally two years down the line we were looking okay, we’re solving an agri supply chain problem.

So it was like how did we land up in this sector. We were doing something and suddenly we found we had landed on this sector. So when I look back and see like okay what could I have done better or what I want to do better I largely felt that the sector needed organization we’re just trying to bring in efficiency to our supply chain which already exists and even what is the contribution on that part, okay, we build an alternate supply chain which is maybe efficient in the future, maybe a little more efficient and add more money to the farmer, bring in more transparency.

But we believe that we’ve not brought in any fundamental shift to the sector as such. So that’s a constant question we should keep asking. Tomorrow if Ninjacart doesn’t exist okay no one will feel pain from its absence, maybe some of the farmers that we work might feel we have to work with little more middlemen to solve my problems or let’s say possibly say maybe his sleep would have been occupied for an hour or two and then maybe he has to go buy stuff from the market. So that’s the dent we’re causing and the dent is so small. So then we asked ourselves on a larger spectrum, you can definitely create value, you can take this up but is it a fundamentally – is it bringing some shift into the eco system or like say how do we make yourselves so valuable, this is a larger question you keep asking.

So if I had to start something and start doing something new the first question will probably be is how do I get into solving a problem which brings in a fundamental shift to the way things were and make yourselves so relevant that people feel the pain of you being nonexistent.

Right now we might do 1000 tonnes and then go on to do 10,000 tonnes of vegetables and fruits but the fact is like if you don’t exist still people will be happy, maybe they will feel a little bit of pain but our overall question which you keep asking ourselves continuously is if you don’t have answer for it or you’re pursuing some small portion of it then like how do you make yourself so relevant to the sector or ecosystem that the mere absence of you is felt. If I had to start something I have to think through and see this something that’s a question I’ve always wanted to answer before I started but it’s also vice versa, if I keep thinking about that I will never get to do anything. So it’s always like you keep doing, you start building something and suddenly something becomes relevant and we scale it but being a process it’s also important to keep asking yourself like how do you differentiate yourself and make yourself relevant to the current ecosystem stakeholders etcetera

Sanjot:

Now I think that’s super interesting and some excellent points there. With that, guys, I’ll wrap up the discussion. We can keep on going endlessly, I think all of your journeys are super unique and if I may use the term I think you’re pioneers in what you’re building globally. So it’s very, very inspirational despite the challenges of the sector what you guys have achieved and will go on to achieve. So, thank you, for taking the time, I know it’s a very, very busy time for all of you. We really appreciate it and would love to continue the dialogue.

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