Why we invested in Agrizy
Take your pick of supply chains across India, and you’ll find similar challenges: fragmentation, informal networks with multiple layers of middlemen, poor price discovery, substandard quality assurance and inefficient logistics. When we dug into the agri-processing industry, expected to be valued at half a trillion by 2025, we found that the system was complex at best and a mess at worst.
Agri-processors exist along the spectrum of both food and non-food supply chains to refine raw materials such as pulses, oil seeds, and fibers into consumable products. This process is far from linear. There are currently over 2.5 million agri-processing units, many of whom are not registered. Depending on their size, capabilities and market linkages, they engage in both buy and sell transactions. Most of this happens, well, let’s say — informally.
Traders we spoke with revealed just how little information is available while doing transactions. For example, typically when a buyer agrees to a deal, they send their associates to physically inspect a seller’s warehouse to examine the goods. The seller then dispatches a loaded truck, again with trusted associates, to deliver the goods and collect the cash. Each party relying on the other’s word and drawing on resources at a moment’s notice.
The information gap impedes more than trust and logistics though, it also undermines a fundamental need for any growing business — access to working capital. Without the relevant industry data, agri-processors pursue informal financing options which come with low caps and high costs. Ultimately, the end customer is saddled with a higher price that doesn’t correlate with quality.
There are, and have been, critical problems in the agri-processing market for a long time. Inertia has sustained business as usual.
But now, at the tailwind of e-commerce penetration, supply chains are transforming. Technology-led platforms have disrupted the industry downstream. Emerging consumer preferences, amplified by the ease of access provided by these platforms, is generating higher demand for agri-processors midstream. With greater availability of consumption data, access to digital tools and increased linkages to distributors, agri-processors feel the need for change.
Agrizy is fulfilling this need. Agrizy is building a tech platform to provide end-to-end fulfillment for agri-processors. By enabling transactions through their platform, Agrizy will be able to optimize order processing, provide demand and supply predictions, optimize logistics for fulfillment and enable access to finance.
We met co-founders Vicky and Saket at India Pitch Fest — our signature startup pitch competition. We found them to be passionate about unlocking this massive opportunity. Both founders hail from agri-processing family backgrounds, giving them rich networks and insights into the market. They also come with a strong mix of experiences across operations, finance, and logistics from Blackbuck, Bizongo and Zoomcar. We believe that the founding team is well positioned to crack this opportunity.
At Ankur, we are always excited about teams creating systemic change in large untapped markets. We look forward to working with the Agrizy team to digitalize the agri-processing value chain.