US-based Agro.Club has raised $1.5 million led by Speedinvest with participation from Elevator Ventures, the corporate venture capital arm of Raiffeisen Bank International.
“We closed the round in January and we delayed the news because of the Covid-19 situation,” Egor Kirin, founder and CEO, told AFN. “It was very good timing. We have enough capital to expand into new geographies. Until now, we have funded the company ourselves.”
Agro.Club links main players in Russia’s global agriculture value chain including growers, crop buyers, food companies, and input suppliers through a digital ecosystem that enables members to do business more efficiently. It focuses on three main pillars: crop marketing, an ag input marketplace, and community and marketing services.
Through its mobile app, it offers 20 touchpoints for farmers, grain traders, retailers, and other players in the agriculture system. It allows users to monitor grain prices with automated logistics, obtain analytics, trade grain, obtain ag inputs, receive weather forecasts for specific fields, and share best practices with other farmers. Users can also seek advice from experts.
Since launching in Russia in August 2018, the self-described fintech startup said that 20% of farmers in the region signed up for the service within 18 months leading to millions of euros in transactions. Over 4,000 grain companies have signed on to the platform and Agro.Club reports agreements with multinationals like Cargill, Bayer, and EuroChem.
“Luckily, everyone on our team is from agriculture. We know that you have to keep it extremely simple for the farmer, grain company, retailer, etc. We try to deliver value that doesn’t require the user to change what they are doing. Also, in Russia, we have a pretty strong presence in the field. We use contractors to work with farmers to collect grain samples. It’s a balance of being offline and online to cover the gap in how people use or perceive our technology. As we go to the North American market where the ag community is more advanced, we will see how much handholding we need to do.”
Having started in Russia where agrifood tech adoption has been slower compared to other regions, Kirin anticipates steeper competition in the saturated North American markets.
“There are a couple of companies working in this space. We analyze what they do and they are all smart people but we feel the solutions they offer are all single purpose or narrow like enterprise solutions for retailers or marketplaces for grain,” Kirin explains. “When it comes to a holistic ecosystem where the farmer has many touchpoints and reasons to use the system, this is where we see our true value add. It’s something that can move the industry by breaking silos.”
Marketplaces have become an increasingly popular offering for farmers. There are many different focuses among current players like securing better prices by eliminating middlemen, obtaining greater pricing transparency for inputs, or connecting farmers to experts.
Ricult offers digital marketplace services to farmers in Pakistan and Thailand, Agrofy is an agribusiness marketplace in South America, which DeHaat, an AgFunder portfolio company, recently added financial services to its digital marketplace supporting farmers in India. In the US, Tillable offers an online farmland rental marketplace to help farmers and farmland owners find and manage leases, while Farmer Business Network offers a variety of services like a grain marketplace and access to inputs.
As the digital marketplace space evolves, startups may see adding new offerings as a way to differentiate and draw business from the competition. Whether each marketplace will be able to execute new offerings successfully while still providing the same or better value with their existing offerings will likely be the true test of these startups’ resiliency.
The startup is adding a few key players to its executive lineup to facilitate the expansion. Industry veteran Neil Arbuckle has joined as managing director for the region. Having spent over three decades as a senior business leader across the North America value chain, Arbuckle has experience with crop inputs, seeds, traits, agchem, distribution and operations. Joining the North America team as campaign strategist, Erin Romeo. Working in the industry for over 15 years as a senior marketing leader at Monsanto and Bayer
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