Agrim founders (L-R): Avi Jain, Mukul Garg
Agri-inputs
Agri-inputs is a $44B industry in India. The supply chain for Agri-inputs is long and fragmented as inputs change hands many times, leading to delays, loss in quality, adulterated products and higher prices. If the input supply chain is optimised, there is an opportunity to redefine Agri-input distribution and achieve savings of 30-40%.
There are close to 3 lakh active Agri-input retailers in India. These retailers sell an assortment of inputs like seeds, fertilizers, pesticides and tools to farmers. A typical retailer serves anywhere between 500 and 800 farmers in his area every month. The retailer is a trusted community member and also acts as the first source of information for the farmer. Despite their critical role in the ecosystem, Agri-input retailers often face constraints such as limited assortment of goods, poor availability, opaque pricing, poor product quality, and high costs of working capital. In recent years, while some AgriTech players have tried to optimise the supply chain, Agri-input retailers who control a large portion of the trade, remain largely untouched by technology or digitisation.
Apart from the large MNCs and national manufacturers, India is also home to thousands of Agri-input manufacturers who control a major chunk of the inputs supplied. These are often regional and legacy family-run SMEs who have turnover between 5-100 Cr annually. These manufacturers face unique challenges as they are unable to expand beyond select geographies and their margins are squeezed by different stockists and wholesalers. The requirement to invest capital upfront on ordering also hampers their ability to scale and rotate working capital faster.
Why Kalaari Invested in Agrim
Agrim is building a B2B marketplace to solve these issues via a simple digital interface, a robust fulfilment process, and embedded fintech solutions. It aims to connect the manufacturers of Agri-inputs to retailers across the country.
B2B marketplaces need to solve the twin challenges of access and efficiency in SME-driven industries and we were impressed by the clarity of thought of the founding team and the exceptional growth achieved over a short period of time.
Impressive Growth
Agrim’s monthly revenues have grown 4x over the last three quarters as they continue to unlock new geographies and products. What was even more impressive to us, was the increasing engagement and strong retention rates of retailers on the platform. Agrim has onboarded over 2,000 manufacturers and has become a key channel of revenue and growth for these producers.
New growth avenues with FinTech and Private Labels
Agrim reaches over 170,000 retailers on through platform and continues to grow. As the retailers forge a long-term relationship with Agrim, the company can build a strong retailer-focussed fintech offering that can free up tied up capital and further accelerate the Agri-revolution. With this infusion of capital, Agrim will expand aggressively across target geographies and also aims to launch its own private labels that will provide an additional revenue stream with strong margins.
Remarkable Feedback from Manufacturers and Retailers
As part of our diligence conversations, we spoke to multiple manufacturers of seeds and tools. We heard the same glowing feedback on how Agrim helped them scale and unlock value in new geographies. One manufacturer mentioned how Agrim was fast becoming their #1 sales channel within 3 quarters of working with the team and how it simplified various logistical challenges faced by them. Agrim also provides these manufacturers with unique data points on sales that were not available to them earlier, and are now helping the manufacturers to ideate and develop better products. Similarly, retailers were delighted with the prospect of doorstep deliveries and the ability to pay via cash on delivery for large orders as well.
Experienced Founding Team
The founders of Agrim, Mukul and Avi are repeat entrepreneurs with mix of startup, corporate and family business experience.
Mukul was born and brought up in a business family in Hisar, Haryana. From an early age, he has been immersed in the farm inputs ecosystem as he saw his father build a seed company. Mukul joined Blackbuck in its early days and ended up leading growth for the company till 2019, where the company saw phenomenal scale. Avi was an investment banker in New York, following which he founded a successful travel startup. When we first met them, their unique mix of experience and authentic way of solving the problem and scaling Agrim stood out for us.
Partner, Vamshi Krishna Reddy writes
“We, at Kalaari, are excited about playing a role in Agrim’s vision of transforming the Agri-input retail market in India. The founding team’s deep expertise and clarity of thought, along with their strong focus on unit level profitability, resonated with me. Agrim’s goal of building a strong, scalable ecosystem for small retailers of crucial agricultural supplies can transform the way Agri-inputs are sourced, while ensuring better quality and access to products for Agri-based communities. Thank you — Mukul and Avi; we are proud to support you in creating an outstanding platform that will aid thousands of Agri-input retailers and manufacturers across India.“
Kalaari Capital is an early-stage, technology-focused venture capital firm based out of Bengaluru, India. Since 2006, Kalaari has empowered visionary entrepreneurs building unique solutions that reshape the way Indians live, work, consume and transact. The firm’s ethos is to partner early with founders and work with them to navigate the inevitable challenges of fostering ideas into successful businesses. At its core, Kalaari believes in building long-term relationships based on trust, transparency, authenticity, and respect.
If you are an entrepreneur (or know an entrepreneur) building a company in the AgriTech space, please write to us at agritech@kalaari.com