The first thing that strikes anyone about the agricultural sector in India is how fragmented and little discovered it is locally.
Indian Institute of Management (IIM) Calcutta and BITS Pilani alumnus Shashank Singh and XLRI Jamshedpur alumnus Bhuvnesh Gupta were working on several agriculture and agritech projects together when they witnessed the challenges of sourcing basically.
“We further validated the ‘supply problem hypothesis’ by visiting other wholesale buyers (general trade and modern trade) for a few months. With the hypothesis strongly validated and our background in agrispace, we have been very clear that this is the space and leg we want to build for. Agricultural commodities are essential commodities, so their movement was unhindered even during Covid. With Poshn’s growing traction, we’ve been able to digitize discovery and execution, which has been a big boon in these testing times,” says Shashank.
Bhuvnesh Gupta, co-founder of Poshn
Therefore, tThe duo launched Poshn, a Delhi-NCR-based processed wholesale distribution and finance platform, to make agricultural wholesale efficient, effective and transparent. In April, the agritech startup raised $3.8 million in funding led by Prime Venture Partners. The round also saw the participation of Zephyr Peacock.
Key issues Poshn solves are access to reliable supplier distribution in otherwise fragmented markets, efficient price and product discovery for buyers, delivery reliability for buyers, and working capital (credit) for providers.
Build the startup
The complexities of a large sector like agriculture can vary by product, value chain and geography. It then becomes very tricky to build for everyone in the ecosystem. However, Shashank is clear they’ve found a way through.
“At Poshn, we have identified the branch in which we want to operate and the problems we want to solve. This has given a very clear direction and helps to build the right solutions and products.
The platform aims to scale up to basic wholesalers (in e-commerce, modern commerce and general commerce) with an ARR of Rs 1200 crore.
Speaking of their investment in the company, Amit Somani, Prime Venture Partners, says, “What attracted us to Poshn was how the company managed to scale sparingly towards incredible traction with a unitary economy. strong over the past eight months. At such an early stage, the company was able to grow 20x while maintaining positive EBITDA. We are also impressed with the customer love Poshn has garnered, which was evident when we spoke to both buyers and suppliers in the marketplace. »
He adds, “Shashank and Bhuvnesh are both missionary founders and deeply passionate about the issue and the sector in which they operate. Growing up in families that were traditionally in agribusiness as a business, they have a visceral understanding of the nuances and challenges facing the sector. They also have experience building and scaling large marketplaces in B2B commerce and logistics, which are key pillars in building this business.
The realization process
On Poshn, wholesale buyers post their requirements with us as we reverse the auction with our selected set of suppliers for price discovery and delivery schedules. Once the right price and timing are agreed with our buyers, the deal is closed, Shashank explains.
“We started as a commodity and price discovery trading platform. As we evolved the platform, we went from a simple discovery platform to an end-to-end execution platform. We are now well on the way to building a comprehensive food exchange making wholesale commodity trading liquid,” he adds.
The team claims to have a revenue MRR of $3 million with positive participation rates, over 200 users, and 20x growth in eight months.
“We maintain a strong focus on suppliers in an otherwise inelastic demand market. Our product solves some of the key problems plaguing processors, millers and repackers in the market. Our major customers include Jio mart, DealShare, CityMall, as well as over 100 traditional wholesalers in the NCR,” says Shashank.
Currently an agent driven market, the gross margin profiles seen here are – sellers – 4-6%; wholesale halls – 3-5%; officers – 1%; and transportation – 1-4 percent.
According to Prime Venture Partners’ Amit, agriculture has been the backbone of India’s growing economy for centuries, yet it has seen little digitalization and organization in its supply chain. It contributes 18% of the GDP, employs 43% of the Indian workforce and the trade in processed products alone exceeds 500 billion dollars a year.
“With over 500,000 food processing units nationwide, Poshn adds tremendous value that will remain essential to this sector for decades, which needs rapid digital transformation.