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Asel has backed $2.6 million in Indian startup Produce, which is trying to help local agri producers sell to global retailers, the latest in a series of bets as investors and entrepreneurs seek to increase efficiency at one of the world’s largest agri producers.
“It’s helping agri-producers securely access global markets where they can generate more profit for their produce,” said Ben Mathew, formerly of Ninjacart, a Flipkart-backed startup that operates a business-to-business platform to connect farmers. , manufacturers and brands for retailers.
Mathew teamed up with former colleague Gaurav Agrawal, entrepreneur Rakesh Sasidharan and Y Combinator alum Emil Soman to launch Produce earlier this year.
Produce is similarly ‘Amazon-powered’ and offers a digital supply chain infrastructure that includes customer acquisition, last-mile distribution, port operations and source logistics.
In a traditional arrangement, farmers deliver their produce to a farmer-collector and deliver it to another trader who then forwards the goods to an exporter. Then the product reaches the retailer through the importer and distributor. The exporter then takes the product to the destination countries.
Producers Ben Mathew, Gaurav Agrawal, Emil Soman and Rakesh Sasidharan (left to right)
All this makes the export of agricultural products a difficult process: retailers involved in traditional arrangements often receive products of poor quality. The intermediaries charge up to 5% margin for payment default risk, quality risk, inventory loss risk and taking into account inflation, he said.
“This will lead to a price efficiency of 25 to 30%, the burden of which will be borne by the agri-producer, where the retailers who pay more to buy will get less profit,” he said.
There are also inefficiencies in their communication as suppliers use email or messaging apps to place and track orders.
These challenges are restricting farmers in India from exporting their produce, he said. “Typically, only 0.5% of farmers have an export channel. So they have a hard time producing what they can sell locally… They don’t focus on all crops.” [or the quality of their crops] It is exportable,” the executive told TechCrunch.
In some ways, Produce works like Flipkart-backed Ninjacart, although there are many differences. Produce is targeting international customers, he said. “We go deeper on the demand-side in certain markets, in certain countries, that Ninjacart doesn’t. Ninjacart mostly focuses on the local market,” Matthew said.
Produce is also involved in building export and import operations as well as arranging last mile distribution in destination countries. The startup said it has already set up an office in Dubai and plans to open offices in Europe and the US in the next two months.
The startup – whose seed funding also saw participation from All in Capital and Ninjacart founder and CEO Thirukumaran Nagarajan and CEO Kartheeswaran KK – recently started taking applications from retailers and agri producers and said the response volume was overwhelming.
“We feel that our produce technology and supply chain capabilities will help customers make better choices by providing fresh farm produce at affordable prices and fairly compensating producers,” said Prateek Agarwal, principal of Asil, in a statement.
Asel is also an investor in Chennai-based NBFC Semunnathi, agri-input supplier Agrostar and Ninjakart.
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