Agro startup Crofarm secures Rs 5 Crore in funding
Agri-tech startup Crofarm, which connects farmers with retailers, has recently secured Rs. 5 Crore in a pre-series A funding from a consortium of angel investors including Rajan Anandan, Google India MD, Jitendra Gupta, PayU India MD, and US-based Factor[e] ventures. The investment, which was made via online deal-making platform LetsVenture, will allow the startup to gain a strong foothold in India’s emerging agricultural technology industry. Founded in May 2016 by Prashant Jain and Varun Khurana, Crofarm is a farm-to-business (F2B) venture that offers a digitized supply chain for agricultural products by linking farmers and retailers on a common platform.
Supporting and guiding farmers to reach markets
The firm currently supports more than 10,000 farmers from Delhi-NCR, Haryana, UP, Bengaluru and Maharashtra. Instead of contract farming, Croma procures fresh farm produce at decent prices directly from farmers at collection points and delivers it to retailers through its multiple distribution centres. Croma has helped farmers receive full value for their produce by shipping their perishable produce to markets faster, guiding them on produce specifications with more market demands, and by eliminating middlemen and other intermediaries. Using the Croma platform, farmers are able to earn 25% more than what they would earn through sale at mandis (markets).
Providing retailers with fresh and affordable produce
Croma currently services over 100 small and medium-sized retailers through its fast and optimized distribution channel in Delhi-NCR, Mumbai and Bengaluru. The firm has not only networked with local fruit and vegetable shops, stores and mandis (unorganized sector) but also has tie-ups with BigBasket, Grofers, Big Bazaar, Metro Cash & Carry and Jubilant Food Works. Retailers receive affordable, fresh and better quality farm produce through the convenience of Croma`s mobile app and digital payments. The firm also aims to organize the unorganized retail players (constituting a staggering 90-95% of the total market) with the timely and convenient delivery of fresh farm produce.
Leveraging technology for creating efficient supply chain of agricultural produce
The Croma app empowers the firm to on-board and manage retail stores seamlessly via mobile device, as well as to track retail-ordering behavior and predict demand using machine-learning. The penetration of smart phones and government initiatives like Aadhaar and Jan Dhan accounts has caused disruptions in agricultural sector and enabled Croma to leverage technology and reach across to a younger generation of farmers. Using smart logistics, the digitized supply chain ensures there is less than 5% wastage of agricultural produce from farm to store, unlike the average wastage of 50% in fruits and vegetables in the country. According to a Hindu report, India loses 10% of its 200 million tons of crops due to inefficient supply chain and multiple handling. Preventing post-harvest loss of 20 million tons of crops will enable India to supply nourishment to an area equivalent to the whole of Australia. Catering to the $ 100 billion-plus fruits and vegetable market in India’s agricultural sector, Croma`s zero-wastage digitized supply chain has helped in solving key problems that plague Indian farmers, provide higher value to them for their harvest and offer the freshest farm produce to retailers.
Commission as firm revenue
Crofarm generates revenue through commission ranging from nearly 5% of the price in case of perishables like potato and onions, 15% of the price of green vegetables, and 20-25% in case of fruits and exotic consumables. It procures its products with a longer shelf life from national sourcing zones and perishable products from local regions.
Crofarm had previously raised Rs. 10 Crore in seed funding from Pravega Ventures and other investors in July, 2016. The firm now has plans to stabilize its operations in the current three cities and establish its presence in other cities, includingTier II markets over the next two years. Through its dependable supply chain, it aims to eventually expand to a cold supply chain. [irp]