Startup Street: Getting Farmers The Right Value For Their Crops
On Startup Street this week, find out how TechnifyBiz is helping boost farm incomes and U.K.’s hunt for Indian startups.
This week on Startup Street, a New-Delhi based startup wants to solve India’s agrarian crisis by helping farmers process their produce and become part of an organised supply chain. The U.K. government comes to India hunting for cutting-edge and innovative startups. And a Mumbai-based venture capital firm sets up its second startup fund. Here’s what went on:
Integrating Farmers In The Formal Supply Chain
The Narendra Modi administration said the answer to India’s agrarian crisis lies in doubling farmer incomes. While implementation of Modi’s promise remains unfulfilled, a New Delhi-based startup thinks it can be achieved by integrating farmers in the formal supply chain and organising procurement of their produce.
“The current market scenario is very dysfunctional, fragmented and inefficient,” Akash Sharma, co-founder of TechnifyBiz, an agri-tech startup, told BloombergQuint. “There are multiple middlemen, brokers, wholesalers, aadatis (mandi traders) who bring in the financial trust layer, quality grading and processing and year-long distribution capabilities.”
“This is a potential hotbed of asymmetries.”
TechnifyBiz is trying to change that. The business-to-business startup enables farmer groups to process their produce and then procure for an end-customer, typically a supermarket chain or a processed food manufacturer. Daily rates of commodities are worked out through an algorithm and shown on TechnifyBiz’s platform, from where a customer can place a wholesale order.
Sharma illustrates how this may boost farmer incomes. “The cost of raw cashew nut that the Indian farmer gets is Rs 400 per kilogram, whereas the average price of processed cashew is Rs 500 per kg. There is a Rs 35 processing and interest costs of the processor in this,” he said. “By helping farmer groups process their outputs through the existing infrastructure we are able to increase their profits, whereas at the same time improving asset utilisation of the existing processors.”
It’s a win-win situation for farmers as selling on TechnifyBiz directly increases their profit margins as till now they had no understanding of processed goods quality or market linkages. More and more farmer groups approach us in interest of selling on our platform.Akash Sharma, Co-Founder, TechnifyBiz
The startup also helps farmers get commodity financing through banks and non-banking financial firms.
Sharma said he had a “long-standing interest” in the agrarian problem being from a small town in Rajasthan. But the idea for TechnifyBiz “germinated” when he met co-founder Abhishek Agarwal in 2017. The duo moved into the incubation space of Indigram Labs in the national capital in 2018 and the startup was born.
The startup has a monthly turnover of Rs 7 crore, growing at 70 percent sequentially, Sharma claimed. It’s backed by angel investors such as R Narayan, founder of power2Sme, Rajneesh Gupta, director of Aakash Namkeen and Sunil Khairnar, founder of Indigram Group.
Some of TechnifyBiz’s marquee customers are Big Bazaar, Reliance, Haldirams, Metro Cash & Carry, Grofers, Big basket, Flipkart, Vadilal and Havmor.
The startup offers more than 10 commodities, including foxnut, almond, and walnuts, in seven states. The company, Sharma said, will soon raise its pre-series A funding to expand further and add suppliers.
“We are planning to launch 60 commodities in the next two years with at least a 100,000 supplier base. We are also looking to get into commodity financing, working capital financing, targeting more horeca and wholesale customers.”
U.K. Brings Its ‘Go Global’ Programme To India
The U.K. government has expanded its ‘Go Global’ initiative to India for helping some of the country’s most innovative and cutting-edge startups to grow their businesses and pave the way for future economic partnerships.
The new programme will focus on tech firms in India’s “tech for good” sector. The U.K.’s Department for Digital, Culture, Media and Sport, in a statement, described the ‘Go Global’ initiative as a successful innovation scheme supporting startups to work with the U.K. expertise to take themselves to the next level.
Successful Indian startups will be allowed to share the skills they learned with other firms across the country.
“Not only will the programme help startups in India, but will also play a vital part in making links for U.K. startups in emerging hotspots such as Delhi, Hyderabad, Mumbai and Bengaluru,” DCMS said.
The India launch follows the first successful Go Global Africa programme where 18 ambitious tech startups from Kenya, Nigeria and South Africa visited London.
Applications for Go Global India will open in the coming weeks as part of a wider plan to strengthen the U.K.-India Tech Partnership. The partnership was announced by outgoing British Prime Minister Theresa May and Narendra Modi in April last year.
“India is home to a rapidly growing tech sector and with thriving fintech, e-commerce and telecommunications industries,” PTI reported quoting Jeremy Wright, U.K.’s digital secretary, as saying. “Through the newly expanded Go Global programme, we are giving Indian tech entrepreneurs the opportunity to hone their skills so they can compete on the global stage.”
This will also help to build connections for U.K. startups in new markets, highlight Britain as the place to develop new technology and pave the way for future economic partnerships.Jeremy Wright, Digital Secretary, U.K.
The U.K. DCMS said India is home to a thriving digital sector worth about $200 billion and is a growing hub for technologies such as artificial intelligence, cybersecurity, data analytics and a leading manufacturer of internet-connected devices and services.
Unicorn India Ventures To Set Up Rs 400-Crore Fund
Mumbai-based Unicorn India Ventures will launch a Rs 400-crore equity fund to invest in early-stage startups across fintech, health-tech, robotics and gaming.
The fund expects to close deals worth Rs 150 crore by the end of 2019, UIV said in a statement. The Fund II will look to invest in pre-series A and series A rounds in sectors like B2B, SaaS, fintech, health-tech, robotics, gaming and digital content, it said.
The venture capital firm will be raising capital for Fund II from institutional and large family offices in India and overseas and start deploying it by end-2019.
“We launched our first fund in 2015 and since then invested in a variety of startups ranging from consumer internet to on-demand to media tech. Around late 2017, we actively started scouting for investment opportunities in more tech heavy sectors like artificial intelligence, robotics, internet of things, 3D cybersecurity and fintech,” Anil Joshi, managing partner at UIV, said.
In the first fund, UIV invested in 18 companies, including VLCC VanityCube, Inc42, Sequretek, Pharmarack, GrabonRent, Inntot, Genrobotic, SectorQube, Perfit, NeuroEquilibrium, SmartCoin, Open Bank, Boxx.ai, Clootrack and Openapp.
In the second fund, UIV plans to enter at an early stage with an average investment size of Rs 3-5 crore and follow up to series A and B by backing high-potential startups.