Bengaluru-based agtech startup Agrizy has launched a business-to-business (B2B) platform where agri processors can procure their raw material and get it processed for value-added products through small and micro enterprises (SMEs).
This is done primarily by tapping the untapped capacity of small and medium enterprises (SMEs) agri processors across the country.
The startup, begun with the vision to transform India into a global agri food processing hub, arranges finance from banks and non-banking finance companies for these processors to scale up production, said Vicky Dodani, Founder, Agrizy.
Full-stack platform
“We offer a full-stack platform where we enable the discovery and fulfilment. We ensure quality in fulfilling the orders and offer logistical support besides payments,” Dodani told businessline.
Agrizy, founded in 2021, ensures the processing of agro-produce complies with global standards. “We work with some of the large buyers, either in domestic or international markets. We understand what their requirement is, and we get those custom processed,” he said.
In turn, this ensures that SME processors’ idling capacity is utilised. The company ensures that these processed products are certified for quality.
Bootstrapped launch
“We help them with certification, including for food, safety. We provide them with working capital to scale up. Since they work on our platform, banks and NBFCs can see data for all the transactions happening on the platform and provide them with finance,” Dodani said.
Agrizy, which began as a bootstrapped firm, got funds in March 2022, and this has helped the company scale up. Since then, it has seen a growth of 35X, particularly with clients such as Reliance, Haldiram’s, Adani Wilmar, and Godrej Agrovet.
The company has empanelled over 1,000 buyers and suppliers on its platform, and this keeps the digital platform going as one or the other is in need of some product.
How biz is done
Agrizy connects the supplier and processors virtually and helps them understand the requirements without knowing each other. “The buyer sends a request, and we tell them what is the best rate at which the request can be met by including the logistics cost. Our app factors these aspects,” the company’s founder said.
On the other hand, for companies that need agri produce processed, the company scouts for SME processors and gets it done through contract manufacturing.
Agrizy currently gets spices and herbal extracts processed by SMEs for value addition. It works with a limited number of these processors and has two approaches for them.
“One is to ensure their capacity utilisation increased from 55-60 per cent to 95-100 per cent. The second is to work with more than one and increase their utilisation by 5 per cent,” Dodani said.
Working on cereals, oilseeds
The processors are concentrated in Gujarat and Rajasthan, but there are clusters of such processors with who the company works, including ensuring quality, getting certification and standarising production.
“Basically, the entire demand sales and marketing are done by us. Though new to us, we are connecting banks and NBFCs with processors or supplies to meet their working capital leveraging our data platform. We earn for arbitrage for this,” the Agrizy founder said.
Dodani said the company is predominantly working on cereals and oilseeds on the commodity front, while does value-added processing in fruits and vegetables too.
“We are focussign more on paddy, rice and maize. We are back-end partners for a large Indian firm to procure from multiple States and deliver at the ports ,” he said.
Meeting export demand
Exports make up 4-5 per cent Agrizy’s revenue and it capable of meeting large demands to ship in volumes of 5,000 tonnes or 10,000 tonnes, he said, adding in January it was one of the largest supplier of maize for an exporting firm.
The company exports to Nepal and Bangladesh. It has begun to ship processed food to Dubai. “We are sending some products on trial to a couple of companies in Dubai,” he said.
Agrizy has got farmers on board, mainly through farmer producer organisations and aggregators.
The company is looking to work directly with “pockets of demand”, including Europe, through deployment of its platform in the long-term.
“We don’t have the right expertise. We need to do traceability of products and we will have to get there along with farmers,” he said.