SUMMARY
Launched in 2016, AgriBolo offers 360-degree solutions to farmers, right from agricultural inputs to farming best practices to sustainable pricing
The company is currently working with farmers in Haryana and Rajasthan
India’s addressable agritech market opportunity is expected to reach $24.1 Bn by 2025, out of which agritech startups have only tapped $204 Mn
Recently, the Economic Survey revealed that agriculture and allied sectors were the least impacted by the pandemic even when the economy as a whole struggled to cope and the sector is expected to grow by 3.9% in 2021-22. In spite of farming’s potential to pivot from a rural livelihood sector to a tech-powered, modern enterprise — and the number of agritech startups in India — farmers across the country continue to suffer and losing to climate vagaries, pest attacks and poor quality agricultural inputs.
Add to that lower price realisation due to a broken supply chain ruled by middlemen, and one can easily understand how the ecosystem is systematically pushed into a vicious cycle of debt and low growth. According to an NSO (National Statistical Office) report, more than 50% of agricultural households in the country are in debt.
Growing up in a farming household in Rajasthan’s Sri Ganganagar, brothers Arvind and Ajeet Godara were aware that few people from the farming community had full information regarding the crops in demand and best farming practices.
The duo decided to set up a comprehensive platform to guide farmers through the entire agricultural lifecycle, from crop selection to procuring seeds and input purchase to farming and selling at the right price. And thus was born the agritech startup, AgriBolo in 2016, with limited farmers on board. Today, more than 3 lakh are registered on the platform, while the company mostly operates in northern and central Rajasthan and south Haryana.
Sowing The Seed Of Tech-Led Agriculture
According to Arvind Godara, co-founder and managing director of AgriBolo, building a direct link between the farm and the end consumer is in the best interest of the farmers.
“The mandi system (Indian farmers’ market) adds costs to the commodities instead of adding value. When farmers sell their produce there, they have to pay the middlemen, bear labour charges and transportation costs. This reduces their profit margin by 6-10%,” he explained.
Keen to weed out the intermediaries and transform Indian farmers into ‘agripreneurs’, the brothers created a phygital model to bundle all agri services under one roof. AgriBolo app available in Hindi & English to create a market linkage between farmers and traders to facilitate online agro-trading. The app also features information and advisory videos on weather updates, fertiliser usage, commodity prices and more.
A key offering is to help farmers with suitable agricultural inputs for maximum crop yield. To bring farming essentials, including seeds, fertilisers and pesticides, besides renting agricultural machinery to the farmers, AgriBolo has tied up with many seed and agrochemical firms such as UPL, Tata Agrico, and Godrej Agrovet on the AgriBolo app
However, the biggest challenge was the slow adoption of technology by farmers with limited digital literacy. But the brothers were determined to counter it by promoting awareness and ensuring easy access to products and services. “So we created multiple touchpoints, including call centres and a ground team for physical service centres,” said Arvind Godara. “Farmers can call the toll-free service number for farming assistance or get their queries resolved. The call centres also act as independent order fulfilment centres and are responsible for tracking every single delivery and fulfilment.”
Farmers can buy farming essentials either through AgriBolo’s Agrimart, a digital marketplace on the app, or through Agri-Seva Kendras, on-ground farmer assistance centres and the most crucial component of the ecosystem. These service centres act as one-stop shops for agricultural inputs and are conveniently located within the villages, making them easily accessible. These are set up with partner companies on a profit-sharing basis and typically cost INR 2.5 Lakh each. Of this, INR 50K is a refundable deposit, and the rest is the working capital requirement for inventory building. All sales are directly billed by franchises as they act as local sellers, order booking and delivery agents.
“This model enables a payback in about 1.5 years. The main tenet of this partnership is sharing risks, rewards and responsibility. The delivery costs are shared, and our franchises get 2/3rd of the gross margin available.” said Arvind.
Inside AgriBolo’s Farm Assist
When farmers reach out to AgriBolo through its three touchpoints — the mobile app, the Seva Kendras or the call centre — the startup caters to their farming needs at every level.
Farmers can buy seeds and crop protection measures either through the Seva Kendras or through AgroBolo’s Agrimart, a digital marketplace on the app. The startup gets the farm inputs delivered at a farmer’s doorstep free of charge.
The ground team assists farmers throughout the crop lifecycle by providing expert advice and helping them rent and use agricultural machinery like tractors or irrigation equipment. Once the yield is ready for the market, AgriBolo provides an alternative to the traditional mandi system and enables online agri-trading via its app.
After assessing the quality of the produce for various parameters such as moisture, lustre and the presence of foreign matter (in food grains), initial prices are set for trading. The bidders generally include edible oil industries, agro-processing mills, exporters and large retailers.
In spite of online trading, farmers have the option to reject bidders and store their produce in AgriBolo’s warehouses. They can track market prices in real time on the app and choose to sell whenever the pricing looks good. “The company is for the farmer, by the farmer and with the farmer, and their interests are a matter of paramount importance here,” said Arvind.
Towards that goal, the startup told Inc42 that it does not charge any fee from the farmers, just a nominal commission — mutually agreed upon — from the buyers/traders/sellers.
“Farmers can reduce cultivation costs by 30-35% with the help of right inputs. This cost reduction, along with crop selling via AgriBolo, increases a farmer’s income by 10-15%,” he added.
Things were not so hunky-dory in the wake of the pandemic as stringent lockdowns meant restricted operations. In 2020, the company decided to scale down its activities and focus primarily on Rajasthan and Haryana. Additionally, it relocated its call centre from Jaipur to Sri Ganganagar to control costs and ensure close monitoring. This has helped the company achieve a positive EBITDA with a higher share of farmers’ wallets.
However, the lockdowns provided a lucrative opportunity to agritech companies like AgriBolo. “The closure of the mandis at the time meant private players could directly engage with farmers and commence trade. This raised the farmers’ confidence in us,” said Arvind.
Interestingly, the B2B agricultural market has emerged as a reliable model for fair trade only after large-scale digitalisation. Similar startups like Agrim, DeHaat and Bijak have also taken advantage of the pandemic-triggered internet boom to connect farmers with big businesses and even small retail consumers operating outside the mandi system. As a result, AgriBolo claims to have recorded more than 20% jump in sales per franchise in the past 12-24 months.
Given this scenario, the brothers now aim to expand the company’s presence in 40 districts across several states, including Uttar Pradesh, Maharashtra, Himachal Pradesh and Madhya Pradesh. It will also grow its franchise network and increase the number of Agri Seva Kendras from 30 to 1,300+ in the next three to five years, covering almost 15 Lakh farmers.
“We are in the process of raising upto USD 5 Mn in a pre-Series A round. The funds will be mainly used to set up more Agri Seva Kendras and expand the management and the tech teams,” added Arvind.
The Way Forward
New-age agritech startups like AgriBolo are on a mission to introduce cutting-edge technology to modernise low-yield traditional farming. Furthermore, they are tapping into the full potential of large-scale digitalisation across rural India by developing service platforms for farmers, B2B agri marketplaces, rural fintech businesses and farm-to-consumer (F2C) supply chains.
According to an analysis by Inc42 Plus, India’s addressable agritech market opportunity is expected to reach $24.1 Bn by 2025, out of which agritech startups have only tapped around $204 Mn.
Despite their low market share, AgriBolo and its ilk can expect significant growth in the coming years, given the government’s 2022-23 Budget announcement to fund startups in the agricultural sector.
The government has also expressed its interest in adopting a PPP (public-private partnership) model and working with private agritech players to provide farmers with digital services. It recently flagged off 100 Kisan drones across India to spray insecticides and agri nutrients. The use of drones is considered a big step towards modernising the agricultural sector at an institutional level.
It will be interesting to see how the government joins hands with agritech startups to incorporate hi-tech services to boost a traditionally low-yielding rural sector and the role AgriBolo and the like play during this transformational development.
