Surendra Prasad, 52, a cauliflower farmer from a village in the North Indian state of Bihar, usually travels 50 km to procure seeds and pesticides from the city market. Last year, when India was under months of lockdown to curb the rising infections of COVID-19, he had no way of going to the market to buy farming ingredients.
His teenage son discovered multiple online platforms that could help his father get hold of the products he needed to farm. A proud father, Prasad asks his son to show this reporter how it takes him only a few minutes to buy seeds and other products right from his phone using an online company called BigHaat.
“It takes ten days for them to deliver, but at least I am sure I will get what I need,” Prasad told KrASIA.
Agritech companies such as Agrostar, BigHaat, DeHaat, and Gramophone, among others, have been seeing a rise in demand since last year. Although these agritech companies sell farm inputs like pesticides, fertilizers, seeds, and farming equipment online, they had to employ salespeople who would visit these farmers to help them place orders from their phones.
But when these sales executives couldn’t travel to the farms due to the lockdown, agritech companies started seeing farmers like Prasad placing orders themselves, albeit with some help.
“Earlier, we had to push farmers to place online orders, but now they have learned how to do it and realized its benefits,” said Tauseef Khan, CEO and co-founder of Gramophone.
Lockdown that changed everything
Khan said that during the lockdown, farmers realized the potential of e-commerce as they could easily source agricultural products to farm the land. Farmers also learned the price difference between offline and online markets, which was another factor that drew them towards e-commerce platforms. Gramophone offers discounts between ten and 20% on farm input products.
“Due to lockdown, when farmers’ access to local retailers was limited, they started looking up online, discovered BigHaat, and started placing orders themselves,” Sachin Nandwana, CEO and founder of BigHaat. The Bengaluru-based online commerce platform sells farm inputs.
Along with an alternative channel of sourcing, they also provide information on weather, soil, and crops, which benefit the farmer hugely.
“During May last year, we witnessed 80% growth in our business. Compared to 2019, our growth quadrupled,” added Nandwana. The company’s presence is across the country and has over half a million farmers who visit the platform every month.
Due to COVID-19, the USD 370 billion agriculture sector has observed a complete transformation that is expected to continue in the coming years.
“We saw phenomenal growth in the following months of May 2020 when there was more clarity on lockdown rules and functioning of agritech businesses. In one month, the business grew 6x,” said Khan.
Knowledge inputs
The agritech sector in the country has been growing exponentially and is projected to grow to a USD 30 billion–USD 35 billion market by 2025, according to a study by Bain & Company. The report said online sales of produce, farming inputs, and logistics are going to be the key enablers to drive the sector.
BigHaat is planning to go into a full-stack model to provide inputs to farmers, guide them throughout their farming process, and buy back crops in the end.
Apart from e-commerce, BigHaat provides farmers with value-added services such as agri-news, a communication forum called Kisan Vedika, and a platform called crop doctor, which allows farmers to upload the photo of their infected crops to seek help from experts and peers.
“Of half a million monthly visitors, most of them use features like crop doctor and Kisan Vedika. We aim to make farmers realize the importance of technology and how it can be easily harnessed to directly benefit them,” Nandwana said.
Launched in 2019, Krishify, a social networking and knowledge-sharing platform for farmers witnessed a sudden rise in activity as farmers started engaging more on the platform.
“Local seed and fertilizer shops are a big source of information for farmers. They get a lot of guidance from them in respect to sowing and cultivation of land. But, when everything was entirely shut last year, they turned to online platforms to find relevant information and seek guidance,” said Rajesh Ranjan, CEO and founder of Krishify.
The Gurugram-based company is majorly active in the states of Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar, Maharashtra, Punjab, and Haryana. It claims to have 3.5 million active users, of which 95% are farmers, while the rest are sellers, traders, and distributors. The average monthly transaction on the app is around INR 300 crore (USD 40.46 million).
Read this: Hydroponics startups are slowly growing on Indian consumers
Farmers use Krishify’s community to discuss crop issues with peers who either face similar issues or grow the same crops. They also get answers for anything related to agriculture from Krishify’s in-house pool of experts who teach farmers the best practices for growing contemporary crops.
Ranjan said that during the lockdown, the company gained more than 500,000 users and touched the 1 million mark between March and July 2020.
Witnessing the surge in transactions, the company added more categories within the agriculture segment. Now, sellers, traders, distributors, farmer input companies, and lenders frequent the platform.
Besides e-commerce, other agriculture-related categories like supply chain, agri-fintech, and warehousing, have also gained interest from farmers and other stakeholders.
Bhopal-based AgriGator provides a full-stack solution for the supply chain of agricultural produce, especially grains. It’s developing a marketplace that will help buyers and sellers trade in a wider network with the assurance of quality sourcing.
Looking for cash in soil
“The year 2020 was a roller-coaster ride for us. When the lockdown was announced last year, we were in the middle of a [funding] deal, which got delayed. We either needed more customers or funding to sustain the business. With a countrywide lockdown and no money in the bank, we had no clue what would happen next,” Nandwana of BigHaat said.
To his relief, the government soon included agritech startups in its list of essential services, allowing such businesses and their couriers to work. This helped the company grow and eventually survive the pandemic.
Similarly, Charu Chaturvedi, founder of AgriGator, said her six-month-old business came to a standstill when the lockdown was imposed in March 2020. But the business saw immense growth when the supply chain was added to essential services and allowed to operate.
Venture capital investment in agritech startups in 2020 fell to USD 136.46 million from a year earlier, with total funding of USD 244.6 million, according to a report by local media Inc42.
Ninjacart, a fresh produce supply chain startup, which raised USD 30 million from Flipkart and its US-based parent Walmart last year, received USD 9.5 million from Sygneta Ventures at a valuation of USD 502 million in May 2021. WayCool raised about USD 7.8 million from investors like Lightbox, LGT Lightstone, and others. DeHaat, an agricultural services platform, raised USD 30 million in Series C funding, led by Prosus Ventures.
“Indian agriculture is a massive USD 350 billion opportunity that is not being utilized efficiently and needs a major transformation that can be brought through the use of technology,” said Dr. Apoorva Ranjan Sharma, founder of Venture Catalyst. The VC firm has invested in many agritech startups such as AgriGator, Humus, and QZense.
Sharma said that while there are around 100 million farmers in the country, most of them use traditional farming methods, which leads to poor yields. The farming sector needs technology that can help improve crop forecasts, as well as improved and mechanized equipment for better production, organized and streamlined supply chain processes, and tech-based finance, so farmers don’t fall prey to greedy moneylenders.
