Agritech startups .. train wreck in slowmo …
Imploding after investors turned off the taps a year so ago.. investors spoilt the ecosystem chasing growth with weak business models.. disintermediation doesn’t always work.. neither does setting up models that impose costs and ignore risks … the chickens come home to roost..
What is the value they are adding ? Are they increasing productivity of farmers or increasing quality of produce? Or filling any inefficiencies in the system? Is it all fluff?
There’s a lot of fluff.. In most cases they’re not making impact on productivity or quality.. and it’s not easy.. what will a bunch of city slickers do that 10s of input cos, agri universities, extension workers have not been doing for decades? The issues at the farm level are around small land holdings, small to medium farmers who are reluctant to invest (to raise yields or improve quality) as they face high risks on account of the weather, price volatility. Farming is a business, highly risky business at that. So they’re stuck in a trap of sorts.. and many customers won’t pay higher prices either if there are cheaper options out there as they have their own preferences and constraints.. nothing much a start up can do for all this..
@TepidFanny11 they made ppts and showed how India is growing. And soon farming and it's supply chain would be 1000 trillion dollar business.
@DesiAgritechGuy having interacted with Agri tech firms - agree on this. Most become whollsellers themselves
In your pov - are there any agritech firms doing well?
Not really to be blunt.. they’re all basically doing business the traditional way or trying too many too things..
Any pov on export plays for agri?
There is opportunity for startups alright ! There is a huge demand for organic products which are not laced with harmful pesticides and adulteration free ! All they need to do is source raw materials from source and then market those products in budget prices in mass ! This is easier said than done but it is a pretty solvable problem and the profits won't be that impressive for initial years !
What profits? :)
There is need for poison free food alright.. but demand? I’m not sure, if that were the case the stuff would be flying off the shelves.. unfortunate but true..
Besides, shouldn’t all food be safe? Why just organic? Incidentally much of what sold as organic is not truly herbicide n pesticide free..
This is in the b2b context.. Farmers want better prices, customers won’t pay for the higher cost.. the Indian agri supply chain is a broken one but it’s frugal and efficient in its own ways.. loading costs on it that don’t pay for themselves quickly aren’t sustainable no matter what the consultants say on their decks.. EVERY product has existing entrenched players who have tried much of what the startup’s are doing or are doing what the startups are doing.. if the existing players aren’t doing something then there’s probably a reason for it.. how are the start ups better? Poor understanding of risks - credit, quality, storage, adverse price movements, employee fidelity. Weak systems due to lack of people who are from the industry.. lack of controls, whatever are there are set by people who don’t understand or have never worked in agri biz. auditors who depute 20 something year old kids who haven’t worked in real life businesses to evaluate determine processes and existing trade practices, copy paste retail processes on bulk commodity businesses, customers and vendors protestations be damned.. investors relentlessly pushed for unreasonable growth rates that no traditional business would ever push for because they know that sensible checks and balances would be thrown to the winds if they did so.. issues with revenue recognition and quality of debtor balances on books; poor provisioning practices .. investors themselves incentivised such practices by way of higher valuations..
and so it goes on..
Agriculture is a highly govt regulated and subsidised system , and govt does a lot of technology support and upskilling farmers . Inspite of that , we all know how much a farmer makes on average . Startups founders who knows nothing about dynamics of farming , farmers problems wants to change their income . It’s just funny . If Indian Startups wants to do anything in this category , their focus should be in making seeds or cold storage . These are 2 categories which has Indian farmers struggling
Seed companies are there already.. there’s a whole ecosystem in place.. it has its issues but it’s there.. seeds are all about genetics and hard core science and investments, if startups can do it, why not?
Yes it does . I believe farmers or even govt is always ready to buy good quality seeds even at premium price if yield is higher . And not a great deal of research has been done by Agriculture council of India over time . Specially for products outside of paddy and wheat . A premium high quality seed bank has a high potential of scalability