Crofarm

Delhi-headquarted agri supply chain start up Crofarm buys fresh vegetables and fruits
directly from farmers and supplies them to online and offline retailers in an efficient manner.
The agricultural supply chain in India is marked by inefficiencies at all levels and is
exploitative as well. A recent estimate by the government pegs the preventable post-harvest
losses of food grains at 10 percent of the total crop output, which translates to 20 million
tonnes of food grains. The quantum of losses for perishable farm produce like vegetables and
fruits is considerably higher. Adding to everyone’s woes is the presence of layers of
intermediaries who serve to deny the farmers a fair price for their produce. Aware of the
massive losses on account of the logistical mess in Indian agriculture, Varun Khurana and
Prashant Jain proceeded to address the problem with Crofarm, a technology-backed farm-to-
business (F2B) supply chain startup they founded in May 2016.

Pursuant to its goal of providing better price to farmers and supplying businesses with the
freshest produce in the most efficient manner, Crofarm procures fresh fruits and vegetables
from farmers and delivers them to both online (Big Bazaar, Metro Cash & Carry, Bigbasket,
Grofers) and offline retailers (neighborhood fruit and vegetable shops).

Crofarm currently supplies nearly 8-10 tonnes of fruits and vegetables from its two
distribution centres in Delhi NCR. In the last one year, it has built a network of more than
100 retailers and more than 5,000 farmers that use their services. They built expertise and
systems in handling perishable fresh produce to cut down on wastage. Crofarm recently
added 2,200 more farmers in areas near Bangalore and Mumbai taking the total tally of
farmers to 14,000. In a span of few months, it has fostered a deep relationship farmers across
the country specializing in different farm produce.
How It Works

 Demand: Get aggregated demand from consumers and businesses

 On-Demand Harvesting: Harvest from farm as per secured demand

 Fast Delivery: Delivery from farm to fork in less than 12 hours

 Consumer / Business: Maximum freshness, Minimum wastage, Best price

Target problem

Supply chain for agricultural produce today is marred with the following problems –
 a) Quality: Agricultural produce spends too much time in transit resulting in degradation
due to the perishable nature of the product as well as because of multiple loading /
unloading points.

b) Price: There are too many intermediaries adding very little value but un-necessarily
adding to the price escalation.

c) Value to Farmer: Farmer gets very little value for his produce. A side effect of this is
that the farmers growing better quality produce prefer exporting it rather than selling
it domestically, although, the end consumer is willing to pay higher for better quality.

Farmers Benefits

 Guidance on Market Demand: They guide their farmers on produce specifications

 Better Pricing than Mandi: Their pricing is transparent, and they make sure their
farmers earn more with them when compared with the Mandi.

 Digital Payments: Their farmers receive full value of their produce, on time and
digitally through their tech enabled system.

Initial challenges:

According to Varun, the topmost challenge for any startup is making sure there is enough
funds to take it through the take-off stage. Fortunately for the Crofarm team, Mukul Singhal
and Rohit Jain, former SAIF Partners principals, along with a couple of angels Rajan
Anandan (MD, Google India), Jitendra Gupta (MD, PayU India) invested about $1.5 million
seed fund in the startup when it was barely a few months old. What helped was the duo’s
experience in setting up their previous venture, Mygreenbox (which got acquired by Grofers
in April 2016). Crofarm raised Rs 5 crore in a pre-series A round led by US-based venture
development firm Factor[e]. Rajan and Jitendra again invested in this round. Like most
startups, Varun and his team made mistakes initially by betting on multiple things at a time.
Typically, they tried to outrun themselves by spreading across geographies and trying to
pursue multiple models at the same time. But they soon realised they couldn’t go on like that
with the limited resources at their disposal.

Business Model

Crofarm makes revenue through a commission on every sale it facilitates. It gets a

So far, the firm has raised Rs 15 crore investment including $1.5 million seed round from
Pravega VC and a couple of angels including Rajan Anandan (MD, Google India) and
Jitendra Gupta (MD, PayU India).

Crofarm, based in New Delhi and founded by former Grofers executives Varun Khurana and
Prashant Jain, keeps in touch with the 6,000 farmers in its network via SMS telling them
about the quantity of produce required and the price offered. Once the crops are picked up
and reach their centre, he gets another SMS confirming arrival. The company reduces
logistics costs by aggregating demand.
Market Overview:

According to the India Brand Equity Foundation, India’s foodgrain production increased
marginally to 252.23 million tonnes in the 2015–16 crop year. The GDP of agriculture and
allied sectors in India was recorded at $259.23 billion in FY 2015, as compared to $132.71 in
FY 2014. A number of startups have mushroomed in the agri space, with each working in
niche segments. BigHaat, an agri-commerce startup, empowers farmers by providing them
with quality agro inputs and accessories through a marketplace platform. Agri-equipment
rental marketplace Ravgo offers access to modern technology for small farmers who cannot
afford ownership of expensive machinery. Jayalaxmi Agrotech, a crop-specific app in
English and regional languages, helps farmers minimise crop loss and improve productivity.
Crofarm funding:

Last year, crofarm raised Rs 5 crore pre-Series A round led by Factor Ventures and angel
investors – Rajan Anandan, Google India MD, and Jitendra Gupta, PayU India MD among
others.

Existing investors including FactorE Ventures, Ashish Chand from Yukti Securities and
Pravega Ventures also participated in the bridge round. The firm would use proceeds towards
ramping up operations, opening up new distribution centres and expansion.
Crofarm has amassed a little over $2.5 million total risk capital. In July 2016, Pravega
Ventures had led a $1.5 million in the agritech marketplace.

Features for farmers:

 Guidance on Market Demand: They guide farmers on produce specifications that

 Better Pricing than Mandi: Their pricing is transparent, and they make sure our
farmers earn more with us when compared with the Mandi.

 Digital Payments: Farmers receive full value of their produce, on time and digitally
through their tech enabled system.

Features for Businesses:

 Fresh and Better Quality: Crofarm produce is harvested on-demand and reaches farm-
to-fork in less than 12 hours hence is super fresh!

 Fair Prices: they benchmark their prices across several wholesale markets to make
sure you can trust their pricing.

 Convenience: Orders are placed through mobile app and supply appears magically at
your location at the desired time.

Technology:

PROCUREMENT engine (Farmer / Supplier App):

 Transparency: Farmers have complete transparency of their POs and

DISTRIBUTION CENTER ENGINE (Distribution Center Console):

 Prediction: AI based demand prediction basis historical data, procurement is done

 Shelf Life: System keeps track of inventory by shelf life, alerts incase of any aging
inventory

TRANSPORT ENGINE (Transporter App):

 Routing: Optimal routing to optimize the delivery time.

 Tracking: Real-time tracking of delivery vehicles

RESELLER APP (Reseller App)

 AI + Social: AI powered CRM enabling better communication with consumers

 Orders/Deliveries: Track consumer orders and mark deliveries

 Incentive: Earn incentive on sales

 Orders: View catalogue, place orders and track delivery

 Wallet: Add money to wallet

Zero Wastage:

Crofarm finds the perfect balance between demand and supply to ensure zero wastage.