The digital marketplace is one of many new platforms designed to cut out the middlemen and promote greater transparency throughout the agricultural supply chain.
Digital marketplaces are popping up across the world to help every member of the food and farming supply chain find better deals, more buyers, and greater transparency. These marketplaces offer everything from seed and inputs to credit and financing. Many of them also focus on boosting smallholder farmers in key agricultural regions.
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 and Indigo Agriculture both offer grain marketing through online platforms.
Several food-waste startups like Full Harvest are also creating digital marketplaces to help connect growers with restaurants, food distributors, and even consumers to find homes for ugly and blemished produce that’s not pretty enough for traditional channels.
Based in Switzerland, 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, Egor Kirin, founder and CEO, told AFN.
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“The digital ecosystem provides higher market transparency, product traceability, lower transactional costs, and faster operations,” Kirin adds. He worked at EuroChem and Monsanto before throwing his hat in the entrepreneurial ring.
We chatted with Kirin to learn more about Agro.Club’s marketplace and its plans for the future.
When did you launch? Why Russia?
We launched in Russia in August 2018. Being one of the largest ag economies in the world and a key player in the global grain supply, Russia was a solid choice for us to test and polish our business model. We knew that although every market is different, seeing a strong market fit and customer acceptance in a less advanced market such as Russia would be a strong indication for global success.
In less than 10 months, we gained the trust and support of 6,000 farmers, including over 3,000 grain traders and food companies, hundreds of ag retailers and distributors, partnerships with several multinational ag leaders, including Bayer. We are also happy that these numbers convert into revenue. With three active revenue streams, we have achieved 50-100% month over month growth in 2019.
What does Agro.Club offer its members?
Agro.Club is a mobile-first company. We believe in the power and convenience of smartphones. Therefore, through Agro.Club’s mobile application (iOS and Android), we deliver value to our members while still offering a web interface for those who choose to use it. Our mobile app is a true everyday work tool with over 20 touchpoints for the farmer, grain trader, retailer, and others. One can monitor grain prices with automated logistics to one’s location, get analytics, trade grain, and ag inputs, receive weather forecasts for every field, share best practices with other farmers, or obtain immediate expert advice from multinationals and retailers.
Our solution has three main pillars: crop marketplace, ag input marketplace, community & marketing services. First, Crop marketplace brings unprecedented transparency to crop marketing, enabling the best deal to be identified in the full market at any moment in time while identity preserved crops secure price premiums. With us, the farmer can see offers from over 3,000 buyers with a high level of deal automation and analytics instead of only 10 to 20 before. Grain buyers and food companies now have efficient, direct access to thousands of farmers and a sustainable sourcing tool for millions of bushels of identity preserved crops to address increasing consumer demand for product traceability.
Ag input marketplace connects farmers with a large number of retailers ensuring the best product availability and value with the convenience of retailer relationships and services.
The community and marketing services section allows farmers to interact in an unbiased environment. At Agro.Club, we strongly believe in the power of common knowledge and the huge expertise that has been accumulated in the fields. Our app now unlocks this tremendous value by enabling farmers to share best practices, including advice or immediate support directly from product experts. All of that with the convenience of a smartphone.
Producers and suppliers can also promote products in a moderated way and get feedback from farmers on ways to improve. Powerful analytics then allow us to position and offer the right products to the right customers within our marketplaces.
Who is your target customer?
While farmers are, of course, in the center of everything that we do, we work very closely with all key members of the value chain: multinationals, retailers, grain traders, and food companies. Our vision is that only by working together can we bring meaningful and practical innovation to the industry today, something that farmers and others can ultimately feel and profit from right now without waiting five or 10 years. We also believe that only by bringing the full value chain together can we provide the necessary level of engagement to generate and deliver the true value of technology with the appropriate economics for our business.
What’s your fundraising experience been like?
Early on we made the decision to self-finance Agro.Club until we prove the business model, market fit, and our ability to execute and start generating material revenue. We believe it is important to stand behind your idea not only with words but also with hard-earned money. This also serves as a strong sign of commitment to our partners and future investors.
Now, with all the milestones achieved and expansion plans in place, we are raising our first external round and have been fortunate to gain solid interest from professional investors.
What are some of the challenges that you’ve faced?
I have spent my whole career in agriculture all over the world, and one of the key learnings that I have gained is that you have to be in the fields! You have to be shoulder-to-shoulder with your members if you want to deliver a real value! So from the very beginning, our business and operations model included a very cost-efficient contractor network serving in the fields.
What we then tested for is how deeply we should be present and how much transactional involvement our customers would expect from us. What we observed is that our members really appreciated the convenience and transparency that we bring, and they wanted us to also become a trusted agent for the transactions in addition to simple lead generation.
So, for example, now within crop marketplace, we offer services for grain sampling/testing, quality guarantee, and transaction/payment guarantee. These services bring additional convenience and peace of mind while reducing transactional costs for farmers, grain traders, and food companies and serving as an important revenue source for us.
What’s been the most surprising aspect of your startup journey so far?
It’s no surprise that you need to work hard, take risks, and be agile. What I found imperative, especially for someone with a similar corporate background as myself, is that starting from zero with your own money is very different from running or expanding established business with a strong resource base. For me, it was critical to adapt my leadership style and practices as well as mentality to be successful in this new environment. It forces you to be much more resourceful, creative, and flexible.
Have you interacted with any agrifood corporates? If so, who?
Definitely. Agro.Club provides services for agrifood corporates, and we also have partnership programs with them. For instance, our “Farmer Profit Program” with DEKALB seed brand allows farmers to receive a guaranteed premium when selling the corn grain harvested from DEKALB corn. This program also is a great example of our win-win mentality: DEKALB wins by promoting its corn seed, establishing a deeper relationship with the farmer, and truly making a difference to the farmer’s bottom line. The farmer gets an additional incentive to achieve higher yield and improve agronomic practices to maximize the amount of premium. Our grain buyers and food companies get a sustainable supply of quality corn. And Agro.Club attracts new members via the DEKALB network and a strong pipeline of volumes for grain marketplace.
So, we are in very close cooperation and dialog with most global agriculture companies. If we want to make a true difference for the industry we need to work together, and large corporations play a key role in this with their experience, market presence, and resources. Startups like us help and often challenge these large companies to change and adapt to the evolving consumer and market needs. We are strong advocates for such a synergetic mode of collaboration.
What’s next for Agro.Club?
In 2019, we plan to launch in the USA through a partnership with local established players. Our proven technology, extensive learnings, and the strong network and presence of our partners will allow us to achieve a material market position in the US within a short period of time and with limited investment. With additional rollouts planned for 2020-2021, our Serviceable Addressable Market (SAM) will be $300 billion over the next three years.
Any advice for other startups out there?
It is hard not to state the obvious here about failing fast and listening to the customer, but my advice is to surround yourself with smart people you trust and someone you can rely on, especially in tough times. Building a company is a very demanding task, and entrepreneurs, especially solo founders, can feel alone at certain times. Having the support system inside and outside the company with whom to share your thoughts, concerns, or even fears is critical. Everyone faces challenges, but our team and our personal well being are what will define whether we find a solution or not.