Accel has led $2.6 million funding in Produze, an Indian startup seeking to help local agri-producers sell to international retailers, the latest in a series of bets as investors and entrepreneurs look to bring efficiencies to one of the world’s to give a boost to the largest agricultural producers .
“We help agricultural producers reliably access international markets where they can make more margins on their products,” said Ben Mathew, who previously worked at Ninjacart, a Flipkart-backed startup that operates a business-to-business platform. to connect farmers. , manufacturers and brands to retailers.
Mathew co-founded entrepreneur Rakesh Sasidharan and Y Combinator alum Emil Soman Produze with former colleague Gaurav Agrawal earlier this year.
He said production operates similarly to ‘Fulfilled by Amazon’ and provides a digital supply chain infrastructure that includes customer acquisition, last-mile distribution, export-import port operations, and source logistics.
In the traditional setup, farmers deliver their produce to a farmer aggregator who delivers it to another merchant, who then forwards the goods to an exporter. The products then reach the retailer via an importer and a distributor. The export then takes the products to the destination countries.
All this makes exporting agricultural products a cumbersome process: retailers involved in the traditional setup often receive products whose quality does not meet their expectations. The intermediaries also charge a margin of up to 5% to account for default risk, quality risk, inventory loss risk and price fluctuations, he said.
“This leads to price inefficiencies of almost 25 to 30%, most 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.
There is also inefficiency in their communication as suppliers use email or messaging app to place and track orders.
These challenges prevent farmers in India from exporting their products, he said. “Normally, only 0.5% of farmers have access to export channels. So they are stupid to make the products that they can sell locally… They don’t focus on all crops [or the quality of their crops] that could potentially be exported,” the director told londonbusinessblog.com.
In some ways, Produze works similarly to the Flipkart-supported Ninjacart, although there are significant differences. Produze says it is targeting global customers. “We go deep on the demand side in specific markets, specific countries, which Ninjacart doesn’t do. Ninjacart focuses largely on the domestic market,” said Mathew.
Produze also builds up export and import activities and sets 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 US in the next two months.
The startup — whose seed funding also saw the participation of All in Capital and Ninjacart founder and CEO Thirukumaran Nagarajan and chief operating officer Kartheeswaran KK — has recently begun taking applications for retailers and agri-producers and says it has been overwhelmed by the response.
“We believe that Produze’s technology and supply chain capabilities can help improve the selection of fresh farm produce for customers at more affordable prices while compensating producers fairly,” said Pratik Agarwal, a director at Accel , in a statement.
Accel is also an investor in Chennai-based NBFC Samunnati, agri-inputs provider AgroStar and Ninjacart.