Approaching end of 2018, Blume launched a series of thematic events called ‘Chai & Chatter’, where founders, investors, and the startup ecosystem can come together to discuss and exchange notes on topical sectors, once a month. Our first Chai & Chatter event – ‘India2: VCs, Vernacular & Video’ – was influenced by opportunities of building and innovating for the next 100 mn users of India. Manish Rathi of Railyatri (an online travel concierge), Sachin Bhatia of TrulyMadly (a matchmaking platform), Rajat Garg of MyUpchar (telemedicine for tier 2 & 3 India), and Mandeep Manocha of Cashify (exchange and after sales repair platform for second-hand gadgets) were the panelists. Sajith Pai, Director at Blume, moderated the panel discussion.
On 17th January 2019, the second edition of Chai & Chatter: ‘Opportunities in Agritech’ was hosted, where we wove a panel of venture capital executives and agripreneurs. The panel included Anu Meena (Founder, Agrowave), Arjun Ahluwalia (Co-founder, Jai Kisan), Swati Pandey (Co-founder, Arboreal), Varun Khurana (Co-founder, Crofarm), and Mark Kahn (Partner, Omnivore). Hemendra Mathur (Partner, Bharat Innovation Fund) moderated the entire discussion.
Hemendra Mathur teed off the panel discussion by posing a key question to the panelists, “Why are you doing an agribusiness as opposed to a traditional (consumer-tech) business?” Among other reasons, agricultural family background, drive to create impact, and deep-seated belief in ‘agricultural as the next big thing’ stood out. Arjun from Jai Kisan put forth an interesting point of view – “To me the key disparity was that the farmer is always treated as another consumer and not a business. I also find it puzzling that he (the farmer) buys at retail and sells at wholesale. There is an obvious gap there.”
While the evening covered a host of interesting views on the sector, we’ve curated the following key takeaways to summarize the discussion:
(1) Hiring quality talent for core Agri Businesses face both quality and attrition related challenges.
Swati (CEO, Arboreal) said “while agriculture is getting glamorous, it will continue to have a large offline component. Anyone coming from a typical corporate mindset might find it difficult to stick around. Historically, we have found IRMA to be a good source of hiring.”
Notably, all entrepreneurs agreed on the following:
- People who come from farming families have a more nuanced understanding of agriculture and often perform far better than those who only have a formal education in agriculture.
- Workforce that has been long exposed to businesses and environments where subsidy, price controls or some excessive regulation exists, often struggles to adapt to newer and more competitive environments.
(2) In a last mile business like Agriculture, Heavy investment in tech will only make sense after the use case has been established.
With broadly concurring views, panelists agreed that selective deployment of technology can help you build both, frugally and effectively. Drawing from her personal experience, Anu of Agrowave shared, “Until you hit a certain scale, you should resist from investing large sums of money in tech. Continuously, we come across areas where technology can improve cost efficiencies such as reduction of wastage. We then go ahead and add those components to our offering.”
Varun (CEO, Crofarm) also added saying, “Technology helps us build efficiencies. For example, we leverage technology to aggregate demand. Eventually, we plan to extend it to predictive modelling for a leaner supply chain.” Crofarm is a ‘farmer-to-retailer’ commerce platform that manages supply chain for fresh produce (fruits and vegetables).Blume’s take is that the need for technology can be high or low depending on the part of the agri value chain one is operating in.
(3) In midst of Policy changes & regulatory uncertainties, building an agile business is the best bet for an agripreneur.
The Swaminathan report (2006), that continues to be relevant even today, changed the way policy makers viewed agriculture in India. MSP, loan waivers, access to technology, credit and water, were all identified as key drivers to change. Over the last decade, a few of these interventions were actioned by the Centre and the State. However, their impact on streamlining agriculture has remained subpar at best. In our view, technology has disproportionately helped the medium / large landholders whereas small / marginal landholding farmers continue to cope with poverty.
Against this backdrop, the aspiring entrepreneurs in the audience were curious to know how these sinusoidal (policy-related) waves impact growth-stage ventures. Addressing this particular point, Mark Kahn from Omnivore said, “The most impactful interventions come from the State government (as opposed to the Centre). Consider the ‘Rythu Bandhu scheme’ by the Telangana government where both, government as well as the farmer benefit by providing the latter a small grant to cultivate over two seasons. Agriculture is a complex problem, but favourable policies will keep simplifying it. I am hopeful that five years from now, the sector will become more conducive.”
At Blume, we do believe that entrepreneurs, especially in highly regulated sectors (such as agriculture and healthcare), continue to face newer obstacles and barriers to scale. However, the idea is to keep hustling and building.
On that note, we concluded the sequel to chai & chatter. The next Chai & Chatter event will be hosted in February where we’ll do a deep dive on an interesting application of AI. Follow @BlumeVentures for more updates.