A decade ago, few bothered about the agriculture sector. It was the era of consumer facing businesses like Flipkart - fueled by a hyper-active consumer base equipped with the latest tech, deep pockets, and fickle purchasing power. VCs focused their attention on the top 20% of the Indian population, creating opportunities and amenities for them. How food ended up on one’s table night after night was a mystery to just about everyone.
Of course, there were other reasons for the agritech sector being nascent. Back then, sustainable business models did not exist. Much of rural India was disconnected due to archaic communication technology. The sector was highly fragmented, prey to opaque and anti-competitive practices, regulated heavily by the government, and risky for investment due to the seasonal nature of crop yields.
Over the last few years, however, the story of the agricultural sector has changed almost entirely. From being avoided by investors, it is now seen as a massive, largely untapped market that can be transformed with the right interventions and funding. Further, with strong COVID-19 induced tailwinds, the agritech sector is poised to create radical change in the years to come. One such startup disrupting the agritech sector in India is AgriGator, funded by 100X.VC as part of its Class 01.
Read on to know more about how AgriGator is revolutionizing the way food reaches your home.
55% of the Indian population relies on agriculture as their primary source of income. The sector contributes 18% to the national GDP. The agricultural exports market stands at a whopping USD 38.54 billion. Between 2000-19, according to DPIIT, the agricultural sector witnessed an FDI influx to the tune of USD 9.08 billion. These numbers indicate a massive market opportunity that agritech offers enterprising founders and investors.
The agriculture sector is populated by multiple stakeholders that together make up a complex ecosystem. On one end of the supply chain are India’s 130 crore farmers, and the other end are the millions of consumers, both in India and abroad. In the middle lie the processors, retailers, traders, and wholesalers that comprise different parts of the agricultural supply chain. The crop grown in the field changes many hands before it reaches the consumer’s plate.
Owing to the non-formalized nature of the sector, there are many inefficiencies across the supply chain. The farmers often are unaware of prevalent market conditions and are highly susceptible to not only fluctuating weather conditions, but also corrupt practices that reduce their margins to mere slivers. The supply chain itself is marred with inefficient practices, leading to loss of grain, contamination, price fluctuations, and imbalanced supply. On the consumer side, there is very little knowledge of where the food comes from, its quality and efficacy. Across the spectrum, there are numerous challenges due to a fundamental lack of transparency in the supply chain - a problem that has bred decades of losses for every stakeholder involved. And that’s where AgriGator comes into the picture.
AgriGator’s USP lies in its high fulfillment rate for on-spot truck requirement. The start-up aggregates all the stakeholders of the agri-supply chain and charges a commission fee against their services. They also integrate banks and NBFCs into their ecosystem to reduce the working capital requirement for its users. The result is a highly-dependable, complex network of trucking that can be relied upon to transfer grain from farm to table.
Till date, AgriGator has witnessed 30% MoM growth, with 1200 on-boarded traders and 1800 carrier providers. They have a presence in over 40 micro markets in Bhopal and have completed 1000 trips as of August 2020.
COVID-19’s mega-tailwinds propelled AgriGator’s steep growth curve. While the lockdown initially hampered communication channels and travel routes, it caused a rapid shift toward online payment - a change long overdue in the agriculture industry. As the lockdown slowly eased up, they began ramping up operations once again. During the lockdown period, they shipped over 5000 metric tonnes of grain pan-India. Pre-COVID, they primarily dealt with rice and wheat. Post-COVID, they have expanded to commodities like soybean, masoor, and gram. Further, they also expanded their reach to 30 mandis and on-boarded some more industry partners too.
Charu Chaturvedi and Udit Sangwan, co-founders at AgriGator, hail from IIM-A and have relentlessly pursued their vision since day 01. Their vision of streamlining the agricultural supply chain resonated deeply with the 100X.VC team. So did their subject-matter expertise and sound growth plan. The decision of 100X.VC to invest in AgriGator was borne off of these decisions - to enable Charu and Udit as they went headfirst into an industry ripe for disruption.
The months and years to come have fundamentally changed on account of COVID-19. As our economy continues to slump further, everybody is looking at the agriculture industry to help it stay afloat. It took a pandemic for us to care about where our food comes from. Good luck Charu and Udit, as you build AgriGator and pursue your dream!