Neha Khanna is the Director of the investment bank, ValPro or Value Prolific which also houses the startup advisory vertical, Enablers. Neha is a serial entrepreneur with over 13 years of extensive experience in the financial advisory ecosystem, investment banking, and startup advisory services. Her prolific academic background and comprehensive professional experience make her the ideal candidate for spearheading any new-age venture’s fundraising and economic growth journey.
In an emerging economy like India, where 58% of the population is heavily reliant on agriculture, tech disruptions could significantly impact GDP growth and steer the economy in the right direction. At a crucial juncture like this, developing as an ultramodern agrarian economy through conventional and age-old methods, just won’t work anymore.
Agriculture is a quintessential sector mired by multiple problems across the value chain. Right from the roots (what to sow, when to sow, what to do to make the produce most saleable) to getting the crop to the right hands (supply chain) and ensuring there are no financial strains in the cycle, the present-day agriculture industry calls for tech-backed initiatives to elevate its overall growth and productivity.
The evolution of the sector
The last five years have witnessed a record number of deals in the market linkages sector to form better connectivity for enhanced productivity while providing fair pay to farmers for their year-round labor. We’ve also witnessed funding and growth in businesses catering to agricultural inputs, consumer-facing agricultural businesses, and supply chain technology addressing better quality and faster reach of products to entice the end-customer.
These rapid changes are occurring at both the backend operations and the customer’s end. With the onslaught of fresh delivery in a country consisting of a young, well-informed, and progressive demographic, the customer believes in quality at a reasonable price among the myriad of options available at the doorstep today. The impendence of competition can be witnessed through positions taken by Tatas (Big Basket), Reliance (JioMart), and Amazon (Fresh) with steady balance sheets to support the market share war. High repeat rates, word-of-mouth acquisition of customers leading to lower customer acquisition costs, lower wastage, and easy and speedy access at a sweet price are the primary parameters for any customer-facing agritech business.
Adapting to the changing scenario: A few examples
The current broken and unorganized landscape of inputs, storage, supply, and financing provides ample disruption opportunities in the agriculture sector. FMCG industry giants like ITC have struggled with the e-choupal model, which showcases the difficulty of on-ground change over the years. Given the limited use of tech adoption for which farmers may or may not be willing to pay, the future lies in companies that provide integrated services catering to the various needs of stakeholders as a one-stop shop. For example, modern-day companies such as DeHaat are not only providing information on crops, fertilizers, equipment to farmers but also helping them monetize the harvest through market linkages provided through trained micro-entrepreneurs. They have also adopted the approach of initiating new journeys with selected markets and crops to build an individualistic understanding of grassroots challenges.
Another such example is Bijak. The company provides an efficient and hassle-free trading platform for buyers and sellers and gives them a more accessible market. Furthermore, Bijak also assists with bookkeeping, working capital, and payments, making it easier for customers to keep track of profile and productivity.
It is pertinent to note that supply chain alignment involves procurement and professional warehousing and offers services such as quality grading and certification and collateral management. In this context, companies like Arya and Origo have already created tremendous waves in the hitherto agriculture ecosystem.
There is also promising work being done in areas of genomics and precision agriculture to optimize crop yield. The genomics research to provide better seeds is underway and could significantly change India’s previously set agricultural landscape. Early efforts by companies such as Nu Genes and Agrigenome on genome sequencing and hybrid seeds, respectively, are certainly promising. Additionally, Companies such as Cropin are using automation tools like Artificial Intelligence (AI) and Machine Learning (ML) to analyze cropping patterns and raise alerts for pests and disease paired with real-time advice.
Summing up
While tech funding in the agriculture sector is increasing, there is immense work to be done to educate the users (customers and farmers). Furthermore, it is equally crucial to manage each state’s varied diversity and the farming landscape, culture, and techniques. After taking such painstaking steps, the winners that emerge will have experienced founding teams who understand the finer nuances of each market. These hardcore leaders will then be able to speak the stakeholder’s language to create buy-in on the offering and understand that replication of the same model in different markets may not be the solution in a country like India.