Accel has led a $2.6 million funding round in Produze, an Indian startup trying to help local agricultural producers sell to international retailers, here’s the bet The latest in a series of bets as investors and entrepreneurs seek to bring efficiency to one of the world’s largest agricultural producers.
“We are giving agricultural producers reliable access to international markets where they can generate more profits for their products,” said Ben Mathew, who previously worked at job at Ninjacart, a Launch powered by Flipkart operates a business-to-business platform to connect farmers, manufacturers and brands with retailers.
Mathew teamed up with former colleague Gaurav Agrawal, entrepreneur Rakesh Sasidharan and Y Combinator alumnus Emil Soman earlier this year to start Production.
He say Manufacturing operates similar to ‘Made by Amazon’, providing digital supply chain infrastructure including customer acquisition, last mile distribution, import and export port operations and source logistics.
In the traditional setup, farmers supply their produce to a farmer general company, who delivers the goods to another merchant, who then transfers the goods to an exporter. The product then reaches the retailer through importers and distributors. The export then takes the product to the destination countries.
Pioneering founders Ben Mathew, Gaurav Agrawal, Emil Soman and Rakesh Sasidharan (from left to right)
All of this makes the export of agricultural goods a complicated process: retailers engaged in a traditional setup often end up receiving products of a quality that is not up to their expectations. Intermediaries also charge a margin of up to 5% to account for payment default risk, quality risk, inventory loss risk and price volatility, he said.
“This leads to price inefficiencies of almost 25 to 30 per cent, the burden being borne by agricultural producers, who have lower profits because retailers have to pay higher prices to buy them,” he said. it,” he said.
Their communication is also inefficient because vendors use email or messaging apps for ordering and tracking.
These challenges are restricting Indian farmers from exporting their produce, he said. “Normally, only 0.5% of farmers have access to export channels. So they are immersed in creating products that they can sell locally… They don’t focus on all crops. [or the quality of their crops] likely to be exported,” the executive told TechCrunch.
In some ways, Produze works similarly to Flipkart-powered Ninjacart, albeit with significant differences. Produze says it is targeting global customers. “We go into demand in specific markets, specific countries, which Ninjacart doesn’t do. Ninjacart is mainly focused on the domestic market,” Mathew said.
Produze is adding to building export and import operations as well as establishing last mile distribution in destination countries. The startup says it has set up an office in Dubai and is planning to open offices in Europe and the US in the next two months.
The startup – whose funding also received participation from All in Capital founder and Ninjacart and chief executive officer Thirukumaran Nagarajan and chief executive officer Kartheeswaran KK – recently started accepting applications for retailers and agricultural producers and said they were overwhelmed by the number of responses.
Pratik Agarwal, Principal at Accel, said: “We feel the ability of technology and supply chain to produce produce can help improve the selection of fresh produce for our customers at a more affordable price. at the same time fairly compensating producers”.
Accel is also an investor in Chennai-based NBFC Samunnati, an agricultural input supplier AgroStar and Ninjacart.
