Why we invested in Vegrow
Think back to the last time you ordered vegetables or bought them at the market. You would have picked them as your mother would have done and added the best-looking ones to your basket. Did you wonder how the vegetables made it there? What happened to the ones that looked worn?
Each vegetable that makes it to the market exemplifies the survival of the fittest. It navigates a complex journey. It is thrown around and squashed under a large heap. It lies in the heat, loses moisture and changes hands. In fact, vegetables that don’t make the cut end up being diverted to other markets. India has a whopping 40% loss in its supply chain. It is unable to deliver to the standards demanded by new markets. It is often cheaper to buy quality semi-processed food from far flung countries than from regions a few hundred kilometers away.
Wouldn’t it be simpler if the farmer knew upfront what the market wanted to buy? Hyper-fragmentation and asymmetric information have led to weak linkages at each step of the supply chain — farming, processing, logistics and end customers. We need a better system that reduces overproduction and enables the farmer to produce the required quality. This system must also reduce middlemen, enabling produce to reach the market directly instead of changing multiple hands. While these problems are endemic across Indian agri supply chains, perishables such as fresh fruits and vegetables face a larger impact.
The proliferation of digital connectivity and digital payments provides a unique opportunity. Small farms can leverage data and analytics to produce quantity and quality as per market demand. Imagine producing output based on recommendations of a well-mapped demand and pricing engine. Add on a layer of farm tools, which can monitor production and recommend interventions to deliver optimal quality. Instead of following a serpentine path, sorted produce could directly reach buyers.
At Ankur, we track a lot of agri supply chain companies. Many use digital tools but do not tackle the problem at production levels. Vegrow is attacking the problem at its core. The team is driving efficiencies and providing market linkages to agricultural (fruits and vegetables) production with a robust supply chain. They’re building a powerful model that integrates small farms and upgrades production, harvesting, sorting and logistics. Such a technology is worth billions.
Vegrow has a phenomenal team. Praneeth and Shobhit have spent years on the field and in the value chains. Their deep domain knowledge was built at one of India’s iconic agri companies. We were excited by their technology exposures at multiple startups and the core tech talent that they onboarded. Through our interactions, we aligned on a common vision on how the transformation will take place and on the challenges that they need to overcome.
We envision Vegrow as a tech-enabled platform impacting incomes and efficiencies from farm to fork. We also look forward to our partnership with co-investors (Matrix Partners) and marquee angels to leverage their expertise to build India’s next iconic agritech company. We are excited to join Vegrow on this leg of their journey!
