How Gramik Is Addressing Last-Mile Procurement Woes Of India’s 15 Cr+ Farmers

The son of a landless farmer from Uttar Pradesh’s Jaunpur, Raj Yadav grew up supporting his family in the fields and running a tea stall to help his parents sustain their livelihood. He would often travel for miles with his father to buy crop inputs that ranged from pesticides and seeds to farm equipment and animal feed.

However, Raj wanted to study and make it big for his parents whom he had seen toiling in the farms for as long as he could remember. And that’s what the protagonist of our story did. With some help from friends and family, Raj left his village for higher studies.

His career kicked off, and, as he grew up the career ladder, he landed himself a few jobs in multinational companies. Determined to make it even bigger, Jaunpur’s Raj founded an IT services company, 18Pixels, putting him on a more stable career path. 

Speaking candidly with Inc42, Raj said the days of working in the fields and walking for miles with his father just to buy farm inputs still feel like yesterday. 

“Interestingly, even though the times have changed, the situation of common Indian farmers hasn’t, and they are still seen travelling miles in search of farm inputs, especially when crores of Indians today enjoy at-home deliveries of pretty much everything,” Yadav said.    

This was probably the last straw that broke the camel’s back, and a ticked-off Yadav then took it upon  himself to resolve the issue that farmers face in procuring farm inputs, especially when they have to travel for miles in the quest to find high-quality inputs.

Yadav then shared his vision with an old friend, Gaurav Kumar, during the peak pandemic days. The duo then sat down and ironed out the details for its execution. This is how Gramik, formerly known as AgriJunction, was born in India’s highly claustrophobic and competitive agritech space. Kumar is one of the cofounders of Gramik. 

Founded in 2021, Gramik, an agritech platform, strengthens and transforms rural communities through easy access of quality farm inputs, expert knowledge, innovative farm practices, business skills for farmers, women and rural youth, according to its website. 

Still in its early stages, the startup is backed by angel investors such as Godrej Agrovet’s MD Balram Singh, Mercer Mettl’s CEO Siddarth Gupta, Zivame’s founder Richa Kar, and NBFC Western Capital.

Focussed on taking one step at a time, Gramik has largely banked on penetrating deeper into the agri ecosystem, something he has learnt from his past. 

The agritech startup boasts of a vibrant tech stack that has scalability at its core. The startup also claims to cater to all farm needs of Indian farmers. 

Operating within the ambit of the market linkages space, Gramik leverages its partnerships with manufacturers and logistics players to source products at cheaper prices and make way for prompt deliveries.

Peers To The Rescue

Despite considerable efforts by the governments over the years, there was a wide gap that needed to be addressed – crop yields were dismal and traditional farming practices still kept Indian farmers in the stone age, Yadav observes.

Even though agritech startups have pumped in millions of dollars to make supply chains more efficient, doubling farmer’s income is still a far-fetched dream. While most agritech players have a presence at the block level, the last mile challenges that are plaguing a farmer need to be handled with an iron hand.

To resolve this, Gramik decided to simply reach out to farmers through its network of representatives, also known as Peer Partners. Yadav said he created a partner model to penetrate deeper into Indian villages that were otherwise left at the mercy of government initiatives and subsidies.

Yadav said that the network of peer partners serves as a link between farmers and the startup. Based on the information collated from the peer partners on ground, Gramik builds tailor-made offerings for farmers in the area. 

“Before commencing operations in a village, we survey the village and evaluate and analyse opportunities around crop patterns, irrigation avenues, and challenges enveloping its social and political fabric. Accordingly, we onboard peer partners in every village and then train them,” the CEO and cofounder of Gramil, Raj Yadav, said elaborating on his business model.

The peer network that Gramik creates comprises mostly women who are familiar with the area (villages) and its culture. Gramik claims to have 90% women peer partners. 

Once the link is established, the agritech platform then targets just 20% of the village population and offers them a one-stop shop for buying everything farm related – pesticides, seeds, equipment and animal feed. 

On an average, the startup works with 25 villages on a block or district-level, which helps it bulk up on average order areas and offer quicker turnaround time.

With peer partners running the show on the ground, the startup focuses on effectively managing orders and strengthening operational efficiencies. 

Currently, the platform has a network of more than 200 peer partners spread across Uttar Pradesh and Maharashtra. These partners work closely with Gramik’s block sales officers and make money via commissions generated on sales made every month.

The startup also works with government agencies like the National Seed Corporation and Indian Council of Agricultural Research to organise small workshops to boost the adoption of new and innovative methods of farming. 

The startup also has in-house agronomists, who help farmers employ scientific methods of farming so that they can boost their farm yield. 

How Gramik’s Fixing A Broken Supply Chain 

On the supply side, the agritech startup directly sources products such as farm equipment, agrochemicals, pesticides and bio-fertilizers from manufacturers and distributors like Utkarsh Agrochem, Shrinath Seeds and Geolife Agritech.

Gramik then receives orders at its warehouses located in state capitals. From there, its logistics partners move the inventory of ordered products to micro-centres that are located at block levels. Finally, a local band of transporters and individual drivers move the orders placed by its customers to their respective stations and villages.

According to Yadav, the startup, on an average, takes at least four days to deliver an order. In between, peer partners ensure that they reach out to prospective farmers to take down the latter’s requirements and pass it onto Gramik’s agents. This is done to ensure effective utilisation of spare time and ensure timely delivery of input deliveries.

“But what powers the entire system is our tech stack, which automates and optimises route mapping and navigation to ensure maximum coverage at lower costs,” Yadav said. 

Yadav told Inc42 that its tech stack has helped in slashing its logistics costs to around 7% from 14-15% when they started back in 2021.

To keep procurement costs low, the startup sources its products directly from manufacturers, which helps it save anywhere between 10-20%, compared to the wholesale or retail route, and offer high-quality products to farmers.

“Indian farmers have their dependence on local retailers. It is also the point at which 60% of adulteration happens. With quicker reach, we not only solve the problem of adulteration but also remove the middleman, helping us pass the margins saved to the end user,” the CEO added.

Responding to Inc42’s question about how it deals with returned deliveries and liquidity crunch faced by farmers, Yadav said that the company operates on zero credit basis and has also been toying with a buy-now-pay-later (BNPL) model to help farmers get quick loans, which can be paid off in small amounts.

Slow And Steady Wins The Race

The startup is currently operational in 10 districts of Uttar Pradesh and 2 districts of Maharashtra. The startup’s philosophy has been to stay away from break-neck growth and work towards slowly and steadily expanding its footprints in the states. 

Be it the vegetable belt of Uttar Pradesh’s Hardoi or the millet markets of Buldhana in Maharashtra, the startup has remained focussed on building a solid network of peer partners to establish trust among farmers on the ground and from there work its way up. It also plans to enter Madhya Pradesh in a year or two.

The strategy has worked in the favour of the startup, which has grown its revenue multifolds since the second half of FY22.

Gramik reported a revenue of INR 3.5 Cr between October 2021 and March 2022. From there on, the company has scaled up its operations and claims to be close to closing the current fiscal year (FY23) with a revenue of INR 80 Cr. Gramik also claims that it will cross the INR 100 Cr gross merchandise volume (GMV) mark by the end of this fiscal year.

“A big chunk of the company’s revenue comes from the sale of agrochemicals and biofertilizers,” the CEO said, adding that the startup largely earns its revenue from B2B commissions and selling products to farmers on its marketplace. 

While Gramik currently has a burn rate of INR 8-10 Lakh a month, the CEO said that the startup’s cash burn rate is well under control. He, however, acknowledged that the burn was a bit on a higher side because the company was steadily scaling its growth plans.

Meanwhile, Gramik has also set its eyes on raising more funds. Yadav claimed that the company is in talks with multiple investors to raise funds and could likely strike a deal later this year. 

Gramik has raised INR 17 Cr in two funding rounds since its inception. The Lucknow-based startup currently has a workforce of 75 employees. 

It is pertinent to note that Gramik operates in the highly competitive agritech space, which has spawned a host of new-age tech startups in the past few years. 

While most are still relegated to the output side of things, a broken supply chain and market linkages continue to break the backs of many players. Besides, all major agritech players are sitting on mounting losses, away from profits. 

Various industry reports estimate that the homegrown agritech sector would reach a market size of $34 Bn by 2027. This growth has largely been driven by local agritech players such as DeHaat, CropIn, Waycool, Gramophone and many others. Deploying technology, these agritech startups directly connect big B2B procurers and spruce the income of farmers all while raking in big revenue numbers.

The rapid scaling of Indian startups has not gone unnoticed by investors, Between 2014 and 2022, Indian agritech startups raised nearly $2 Bn in funding from VC and PE firms between January 2014 and June 2022. 

Home to 1,000+ startups, the Indian agritech industry is anticipated to grow to $24 Bn space by 2025. While mounting losses and a somewhat dismal performance of startups do not paint a rosy picture for the agritech industry so far, it is pertinent to note that agritech penetration in India is still below 5%, which gives ample space to these players to grow, scale and prosper.

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