Democratising agricultural best practices and bringing farmers’ products online
Our investment in Wikifarmer
B2B marketplaces have been a core area of focus for us at Point Nine for the past, now… 7 years (and our initial investment in REKKI). My former and current colleagues Julia and Alex have published multiple articles about what got us interested in the area such as Julia’s posts here or Alex’s recent B2B marketplace funding napkin there.
Today, we just announced that we have led Wikifarmer’s 5M€ seed round (article here). After REKKI in 2016, container xChange in 2017, Laserhub, Metalshub and cargo.one in 2018 (thesis here), and MerXu and Rooser in 2020 (thesis there), this represents our 8th partnership with a B2B marketplace, often bringing mostly analog industries online.
It also represents the first time we will be working with a Greek company as Wikifarmer is based out of Athens. For those that are curious about B2B marketplaces and the very beginning of the food industry, I figured I’d share a few thoughts about what’s underlying our new partnership with the company.
The trillion-dollar food industry and its intermediates
In Europe alone, agrifood is a 1.2 trillion Euros industry (source). While the mechanisation of the industry has led to a massive increase in productivity (for example, while over 50% of the French population was working in agriculture at the beginning of the century, it is now below 4%), it nonetheless remains the number one employer in the world.
Yet, a significant number of farmers still lack access to agricultural best practices and rely on undigitised channels to sell their products, generally to intermediaries who usually take hefty margins. These are traders or wholesalers that sell farm products to various buyers at the end of the value chains: these can be us, as consumers, but also B2B buyers like hotel and restaurant chains and food processing units of big agrifood conglomerates or supermarkets.
At a more macro level, the pandemic and the war in Ukraine have shown us how important it has become to build (a) resilient food value chain(s). We also know that in order to tackle climate change and reduce carbon emissions, farmers and consumers alike will have to revisit their practices so that we, together, can progress towards a more sustainable food production (and consumption). This partly means using fewer fertilisers but also consuming more carbon-efficient food (for example, less red meat).
Wikifarmer is a dual product with i) a library of content (articles, videos) promoting agricultural best practices (the UN’s Food Agriculture Organisation (FAO) has already recognized it as “The Wikipedia of farming” and ii) a B2B marketplace where farmers can create their online shop and promote and sell their products directly to buyers while monitoring market prices. Products are primarily “non-commoditised food products” (i.e. not those that are listed on commodity markets, such as wheat or soy but rather oranges, citrus or semi-transformed products like olive oil).
Wikifarmer offers instant payment to farmers, gives credit terms to buyers and takes care of the logistics to ship the goods to the buyers.
Starting as a B2C marketplace, Wikifarmer is now focused increasingly on larger orders going after professional (B2B) buyers. You and I can find amazing Greek olive oil and honey for our individual consumption just as larger food importers in the US can find these products in larger quantities for their restaurant chains or wholesale businesses.
An unfair distribution advantage at the very beginning of the value chain
It is not the first time that a startup has tried to digitise trades in the food industry. In the P9 Family alone, REKKI is digitising trades downstream between wholesalers and restaurants while Rooser is digitising trades at the middle of the seafood value chain between primary processors and wholesalers of seafood. Wikifarmer’s unique angle is to focus on the very beginning of the value chain (i.e. upstream), going after suppliers that are farmers themselves and getting them interested in selling by first giving them access to free content/guides to develop their agricultural practices. Peter, the cofounder and Chief Scientist of Wikifarmer, has spent more than five years writing and producing these guides. His work is now starting to pay off, as this makes for very cheap supply acquisition with tens of thousands of farmers already selling on the marketplace. Focusing on the very beginning of the value chain also makes it easier to find alternative trading routes with better margins for the farmer than engaging with the first or the second intermediary in the whole value chain.
Right market timing?
As with any B2B marketplace, one of the questions we ask ourselves is where the market currently stands when it comes to digitisation. Just like seafood, air cargo or metal trading, agriculture is a massive industry but also one where the level of digitization still lags noticeably behind. That being said, the penetration of mobile phones and the generational shift slowly happening in agriculture makes us believe that the timing should be (🤞) about right to gradually digitize this market.
Some role models to take inspiration from ( Faire or MerXu (P9Fam) for agrifood)
Similarly, while B2B marketplaces aren’t entirely new, the playbook is still being written when it comes to building (and monetising) B2B marketplaces at scale. Alibaba (stock price here) and ACV Auctions (stock price here) are two interesting (huge) B2B marketplaces that are now public, and Faire in the private market is also reaching a significant scale. A (very) simplistic (VC) way of looking at Wikifarmer is that it has similar dynamics to Faire but is geared towards for the food industry, which has its own specificities and requires a dedicated marketplace.
Unique team setup in Southern Europe
Since the first day and Point Nine’s investment in Clio in Canada, we have believed that the beauty of the cloud is that… global leaders can emerge from anywhere. In this case, many of Europe’s non-commoditized food products come from Southern Europe, partly thanks to its great climate conditions. Being based out of Athens, Wikifarmer has a unique understanding of the agricultural landscape in these countries, which we believe to be a great basis to start from. Buyers already come from many different countries like the US, France, Germany or the UK.
On top of that, Peter’s agricultural expertise and Ilias’ (the CEO) background at Google in Athens make for a great, complementary, founding team setup that we’re looking forward to helping complement with (even) more software and marketplace expertise as we move forward.
The deal is now closed (and the drinks to celebrate with our lawyer Tilman emptied), so Peter and Ilias are now spending their days hiring great talent in Athens and elsewhere.
Join them — it’s a great odyssey to embark on!