Accel backs Produze to help Indian agricultural producers export globally – TechCrunch
Accel led a $2.6 million financing into Produze, an Indian startup trying to help local agricultural producers sell to international retailers, the latest in a series of bets as investors and entrepreneurs look to bring efficiency to supercharge one of the largest agricultural producers in the world. .
“We help agricultural producers reliably access international markets where they can realize higher margins for their products,” said Ben Mathew, who previously worked at Ninjacart, a Flipkart-backed startup that operates a business-to-business platform for connect farmers. , manufacturers and brands to retailers.
Mathew teamed up with former colleague Gaurav Agrawal, entrepreneur Rakesh Sasidharan and Y Combinator alum Emil Soman earlier this year to launch Produze.
He said Produce operates similarly to “Fulfilled by Amazon”, providing a digital supply chain infrastructure that includes customer acquisition, last-mile distribution, import-export port operations, and source logistics.
In the traditional setup, farmers supply their products to a farmer aggregator who delivers them to another trader, who then passes the goods on to an exporter. The product then reaches the retailer via an importer and a distributor. The export, after that, takes the products to the destination countries.
All this makes the export of agricultural products a cumbersome process: retailers involved in traditional assembly often end up receiving products whose quality does not meet their expectations. Intermediaries also charge up to 5% margin to account for risk of default, quality risk, risk of stock loss and price fluctuation, he said.
“This leads to almost 25-30% price inefficiency, the brunt of which is borne by the agricultural producer who gets less margins from the retailers who have to pay a higher price to buy it,” he said. he declares.
There is also inefficiency in their communication as vendors use emails or messaging apps to place orders and follow up.
These challenges prevent Indian farmers from exporting their produce, he said. “Typically, only 0.5% of farmers have access to export channels. So they are reduced to making the products they can sell locally… They don’t focus on all cultures [or the quality of their crops] that can potentially be exported,” the executive told TechCrunch.
In some ways, Produze functions similarly to Flipkart-backed Ninjacart, although there are some significant differences. Produze says it targets global customers. “We dig deeper into specific markets, specific countries, which Ninjacart doesn’t. Ninjacart is very much focused on the domestic market,” Mathew said.
Produze additionally builds export and import operations as well as setting up last mile distribution in destination countries. The startup says it has already set up an office in Dubai and plans to open offices in Europe and the United States within the next two months.
The startup – whose seed funding also saw the participation of All in Capital and Ninjacart founder and managing director Thirukumaran Nagarajan and managing director Kartheeswaran KK – recently started accepting applications from retailers and agricultural producers and says it is overwhelmed. by the volume of responses.
“We believe that Produze technology and supply chain capabilities can help improve the selection of fresh agricultural products for customers at more affordable prices while compensating producers fairly,” said Pratik Agarwal, director at Accel. , in a press release.
Accel is also an investor in Chennai-based NBFC Samunnati, the agro-input supplier AgroStar and Ninjacart.