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Will DeHaat’s Full-Stack Model Overcome The Challenge Of Low Margins In The Agritech Sector?

Will DeHaat’s Full-Stack Model Overcome The Challenge Of Low Margins In The Agritech Sector?

In India, the most reliable channels for input and output are quite far from villages, and that is where farmers lose efficiency. Through its last-mile network of 1,362 local micro-entrepreneurs, DeHaat is trying to bring all agri-services under one roof

The startup saw a 3.5 times jump in revenue, from INR 43 crore in FY2018-19 to INR 135 Cr in FY2019-20

Apart from the market-linkage startups which have gained investors’ interest, many startups operating in agri-inputs, FaaS, financing and other segments are aiming to build full-stack platforms to make the unit economics work. Can DeHaat's unique ‘micro-entrepreneur model’ give it an edge?

India has more than 100 Mn farmers who are still struggling to access essential services such as agri-finance, the supply of agri inputs like seeds, fertilisers and farm equipment, and easy market access, mostly provided by agricultural value chains. On the other hand, several agribusinesses are unable to sell their inputs directly to farmers or procure farm produce from them without going through multiple agents due to a complex, multilayer supply chain. The lack of market access is one of the key reasons why farmers, who constitute 60% of the Indian population and contribute nearly 18% to the country’s GDP, are still miles away from ‘sustainable agriculture’.

Shashank Kumar, cofounder and CEO of DeHaat (registered as Green Agrevolution) who hails from a farmer’s family, had been exposed to these business gaps all too often when he was growing up. And the outcomes deeply disturbed him. After graduating from IIT-Delhi, he joined a management consulting firm where he worked in the supply chain space. But after some time, Kumar decided to leverage his knowledge of technology and supply chain to mend and strengthen a broken format.

So, DeHaat was built in 2012 in a bid to offer full-stack agricultural services.

It did not remain a solo venture for long. Kumar was joined by other founding members, Shyam Sundar Singh (executive director), Amrendra Singh (director, input services), Adarsh Srivastava (director, fruits and vegetables) and Abhishek Dokania (director, output operations). They all had one common goal: They wanted to streamline the fragmented agricultural inputs channels (read retail shops and co-operatives); bring to farmer quality agri-inputs such as seeds, fertilisers, crop protection chemicals and equipment, at a reasonable price; provide market access to them; act as advisors and offer multiple services as the company grew.