Sometime last October, near the onset of the north-east monsoons on the eastern flanks of the Western Ghats mountains in the Indian state of Tamil Nadu, a contract farmer named Lakshmanan was shocked to discover that the leaves of his seedlings looked papery white just after a month of having sown his chili crop.
Fortunately for Lakshmanan, he had access to expert advice through his mobile phone. Within hours of snapping a cell phone photo of the affected crop, he and his local field agent were in touch with a horticulturalist hundreds of miles away who accurately diagnosed the tobacco cutworm and prescribed a course of treatment, which succeeded in saving his entire crop that totaled only a half-acre. For a man whose poor family relies solely on the yield of his crop for income, the correct diagnosis was a lifesaver.
Unlike Western economies where farm communities are well served by networks of agriculture school extension services for access to expertise, small farmers in India are several days’ travel from the centers of horticulture and agronomy research. Sharing of practices is largely by word-of-mouth, so agricultural techniques tend to be dated and yields are abysmally low. Is there a better way for the farmer to access knowledge on improved farming practices, improve yields and realize higher prices for their crop? Krishna Kumar and Kunal Prasad, two young IT graduates definitely thought so. They were passionate about bringing technology and change to agriculture and both gave up promising careers at multinational companies to make this dream a reality. With $10,000 in savings and support from their families, they set up CropIn Technology to develop a cloud-based farm management system that could be used on a smartphone.
Their journey was far from easy. In the first six months they found that many farmers were not willing to pay for their product. They needed a different business model if they were to survive. They realized that agricultural produce aggregators, especially companies that cared about the quality of output and reliability in their supply chain, saw value in their product. So they signed on their first customer – Field Fresh, a contract farming company — and began to pilot their first product. They used the client’s expertise to enhance their own knowledge and build in product features that were relevant to both the farmer and the aggregator. But this was just the start; as a young company there were many challenges to be overcome. The agricultural sector is not known as early adopters of technology and training mechanisms needed to be integral to any solution. Hiring technology talent was not easy – start-ups in India are often not the desired career path, let alone those that focus on agriculture, a non-traditional sector for technology graduates. Having exhausted the initial funds gathered from friends and family, raising money was also critical to keep the venture going.
Because most institutional investors in India are not comfortable or familiar with agriculture, fund-raising was a challenge. Through an angel network, Krishna and Kunal met Ankur Capital, an impact-focused fund that invests and supports sustainable companies that can impact the lives of low-income communities. Ankur is currently raising a $7 million fund for seed and early stage companies that provide genuine social impact in health, education, agriculture and other non-agricultural rural businesses. Ankur found Krishna and Kunal to be committed and passionate entrepreneurs and ready to build an organization. It saw the potential of their product to create material improvements in the lives of farmers such as Lakshmanan. Ankur partnered with them to grow their fledgling organization by investing in convertible debentures and taking a seat on the board. One of the Ankur team members spends at least a day a week working with Cropin to help build in-house systems and processes that monitor business and impact essentials. Leveraging networks and building out compliance and governance in the organization is another area of focus of their work.
CropIn’s product today allows farmers and field agents to enter data on essential farm activities like sowing, fertilizing, harvesting, and soil conditions. The product can send reminders on critical activities and monitor the extent to which they are executed. Photographs can be uploaded and sent to agri-experts to provide real-time feedback and the GPS function tags farms, making the produce traceable and thereby giving small-scale farm access to global supply chains. Cropin has so far engaged with 15,000 farmers through 12 aggregator clients, increased their productivity by 10-15% and brought down losses in fresh fruits and vegetables to 18% from the typical 30%. Farmers and agents working on fields are gaining from knowledge transfer and using sophisticated technology that has typically been the domain of the urban middle class.
From two entrepreneurs, the company has grown to 14 employees with a formalized internal organization structure, a regularized MIS system and multiple products. The challenges ahead lie in defining the next steps to growth and raising further capital to achieve this. As a hands-on investor Ankur has been playing an active role in raising the next round of capital and working alongside the team to define milestones that strategically grow the company and its impact. The goal for both Cropin and Ankur is not just a commercial bet but the potential to improve lives in rural India.
For Lakshmanan, CropIn’s product was a game changer that saved him from the brink of a financial shock. Krishna and Kunal’s initial dream has already shown that it can change the way small farmers interact and gain from markets. Reaching for the cloud is no longer a dream for Indian farmers but a reality that has taken root and is set to grow.