FarMart to export food items from Africa to India, other global regions
Agritech and agri food supply firm FarMart has expanded its operations to Africa, from where it has plans to export food products to India and other parts of the world, the company’s CEO and Co-Founder Alekh Sanghera has said. “As a business, food security is an international issue and it can only be solved through global operations. So, Africa is one of the regions where we have set up operations now to start importing back to India and other different regions,” Sanghera said in an online interaction with businessline.
No more India story
FarMart wants to be an integrated global value chain across multiple countries. From an “ambition perspective”, it is just not an “India story anymore”. The company is using the technology it has built, he said.
FarMart, which is basically an Airbnb in the food sector that operates like Amazon, has already completed shipping a consignment of chana (gram) from Africa to an Indian-based firm in Singapore through its Dubai office. “Eventually, we will start shipping to India. Kenya, Tanzania, Mozambique and Benin are four markets where we have our own people now,” the FarMart co-founder said.
“They (FarMart staff) are setting up small sourcing operations. Then we are looking at Myanmar and Vietnam. We are already exporting to Nepal,” he said.
The quality of its first consignment to Singapore was found to be good and since the Indian and African seasons do not clash, FarMart is looking at sourcing these for India during the non-peak season. “Over the last 2-3 years, India has been importing more pulses,” Sanghera said.
Biryani basket
At least 90 per cent of FarMart exports from India are basmati and non-basmati rice with spices making up the rest. “We are taking spices to the Middle-East in view of the huge briyani consumption there. They (consumers) want a whole package — cardamom, cinnamon, chilli and other ingredients as a package,” he said.
FarMart, which is trying to build this portfolio — Biryani basket — aimed at the Gulf region. On the other hand, non-basmati rice, mainly parboiled, goes to Africa.
FarMart is basically a digital platform — “an intelligent food supply chain” — connecting farming communities to food businesses globally. “We actually take the onus of doing a first-mile pickup, quality and delivery. We are actually responsible for the fulfilment (of the order) and even before the buyer pays us, we pay 90 per cent for the produce to the farmer to ensure that he does not suffer,” said the FarMart founder.
FarMart gets clients who look for direct sustainable sourcing.
Raises $43 m in equity
“We build software solutions for village level entrepreneurs to do their day-to-day business more efficiently. So whether it’s connecting with farmers, giving them information or even marketing their store or whatever business they do, they use that product for their own use,” said Sanghera.
For FarMart, which has 400 employees spread across three offices including one in Dubai, the Gulf region is the biggest followed by Africa, Nepal and some parts of South-East Asia.
The company, which has raised $43 million in equity including venture capital investors such as General Catalyst, Omidyar Network and Matrix Partners, has raised $22 million as working capital from banks such as ICIC, HDFC, Kotal Access, SBI and a couple of others for its supply chain financial solutions.
One of the advantages that FarMart enjoys is that it has no assets or warehousing. “We give last-mile logistic support, which is a full truckload from the pickup to delivery,” he said.
1st on ONDC platform
The company has 2.5 lakh partners across 23 States in the country and these partners have, in turn, brought in over 35 lakh farmers’ data on the platform. “Essentially, we have linked produce of more than $300 million over the past two years directly to companies. We sell to over 2,700 buyers. Domestically, we sell to about 2,200 buyers and internationally to about 600 buyers across six countries,” the FarMart co-founder said.
Overall, the company, the first food firm to be on the ONDC platform, offers 21 commodities on its platform with greens making up 60 per cent, oilseeds 25 per cent, pulses 15 per cent and fruits and vegetables the rest.
“In pulses, we do 2-3 categories. In oilseeds, we do almost everything. In grains, we trade in wheat, paddy, maize, bajra and millets,” he said.
Farm-to-factory
Overall, FarMart has moved 8 lakh tonnes of food. “Over the last two quarters, we have progressed from just a raw materials marketplace to a processed foods marketplace also. So 75 per cent of our business is raw material from farm to factory processing units,” said Sanghera. The company works with processing partners to process the agri raw material. It is also into business-to-business (B2B) packaging, where it sells to enterprises such as bread or biscuit manufacturers, beverage companies or general traders and horeca (hotels, restaurants and caterers).
FarMart, which was launched seven-and-a-half years ago, also has its own rice and oil brand, both B2B categories, which it has taken upstream to the export market. These brands are sold to retail clients, airlines such as Etihad Airways or Emirates and to distributors.
The company spent its first few years functioning like Uber offering tractor services. Besides, it offered other services such as finance and inputs before it realised the best way forward was to pivot the business to the software plus market linkage.
Project with UP
FarMart is working with the Uttar Pradesh government, which has made the company the linkage partner to procure from 5,000 farmer producer companies (FPCs). “Now, the State has allowed us to sell inputs through our platform,” he said.
The company will be offering inputs such as fertilizers only since the Uttar Pradesh government has asked it. Otherwise, it has taken a pledge not to enter the chemicals category. “From the sustainability standpoint if there is an alternative input like a biofertilizer or other sustainable fertilisers as well as inputs we enable them,” said Sanghera.
Farmers are keen to experiment with new technologies, but they lack the appetite for risk, he said. However, when they find someone else doing well with such risks, they adopt it.
The company carries out quality inspections on consignments that have been delivered through 140 inspectors across 190 districts. “We have created an offline model where these quality inspectors, once they receive a confirmation from our partner, go and carry out quality checks,” said the FarMart co-founder.
The inspectors confirm the quality is good and the specified quantity is available for truckload transportation. The company also has about 5 million images to help the quality inspector carry out inspections.
FarMart has an internal data science team which digitises quality at the first mile. The accuracy is now 86 per cent, he said. In the long-term, the company will capture the image using its smartphone app and try to ratify the quality.