Bypassing Middlemen, This Agritech Relies On Greenhouse Farms To Deliver Fresh Produce
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India is an agricultural country. In this second-largest populous country, around 80 per cent of the rural population directly depends on agriculture and its allied activities. It employs approximately 52 per cent of labour and contributes 14-15 per cent to gross domestic product (GDP).
Despite such remarkable numbers and an export leader in staple cereals, farmers over the years have become victims of middlemen, uncertain weather conditions, and scattered demand in India.
However, with the advent of technology, one startup has been actively trying to solve these problems, promising a better yield and livelihood to farmers. Clover, a Bengaluru-based agritech startup, founded by four friends, have leveraged technology to produce demand-led cultivation.
In an interaction with Entrepreneur India, Avinash BR, co-founder, Clover, shares the journey of how four childhood friends became entrepreneurs and are providing fresh vegetables to their customers.
Coffee To Exotic Vegetables
Four founders of Clover—Avinash, Gururaj Rao, Arvind Murali, and Santhosh Narasipura—are childhood friends from Bengaluru. All having worked in established firms, returned to their home city in 2016. Having settled well in their respective lives, they used to meet often to relive their childhood days. However, the excitement to work on a new project and build it from scratch was missing in their lives. It is at this point, Narasipura, who owned a coffee estate in Karnataka asked his friends to venture into the coffee business.
“We were spending hours comprehending the coffee space, trying to understand large-scale cultivation. However, for one or another reason we could not materialize it,” added Avinash.
However, three years later, Avinash now is grateful that the four haven’t invested in coffee. Soon after the coffee failure, Narasipura offered his parcel land near Bengaluru to his friends to work.
“None of us were from the farming background. So from the very beginning, the idea was clear that we will not do conventional farming and instead rely on technology,” said Avinash.
Avinash, who worked as a venture investor with Avishkaar earlier, had noted the emerging technologies that were driving the agri sector. He tabled the idea of hydroponics—a type of horticulture where crops grow without soil, by using mineral nutrient solutions in a water solvent. “Since we all were technology-driven we valued the importance of modern solutions in this sector,” Avinash added.
The four friends set up a greenhouse on an acre of land and thus began the journey of Clover.
“The idea was simple. Can we grow? If we can then can we send the product directly to the customers, bypassing middlemen and aggregators?” Avinash said.
Initially, Clover started cultivating exotic vegetables in Bengaluru which were cultivated in the nearby hill station Ooty.
Avinash and his partners noted that though these exotic vegetables have a high demand in Bengaluru, the low shelf life and long hours of transportation from the farm to various markets was degrading the quality of the product. Uncertain weather conditions acted as a double whammy and disrupted the supply chain.
To provide a much reliable source of these exotic herbs and vegetables, Clover reached out to its customers who were cloud kitchens and restaurants in the city.
Within the next six months, Clover noticed a surge in demand because of its demand-led cultivation, managed farm network, and full-stack agronomy. Customers across the cities asked them to tune up the volume of the produce and incorporate more crops.
“We were only growing on an acre of land. Witnessing the surge in demand, we reached out to farmers already owning greenhouse farms and asked them to partner with us,” added Avinash.
To Avinash’s shock, most of the farmers were unaware of the demand in the market and had little idea of how to grow different crops irrespective of the season.
By the start of 2018, with the help of farmers, Clover was able to different types of crops on a ten-acre space, thus fulfilling the customer’s demand.
Apart from handing over the demand, Clover provided these farmers with agronomy solutions to produce more yields within a stipulated time.
At present, Clover is directly supplying around seven to eight tonnes of products to its customers from over 70 acres of land.
The firm in May raised INR 7 crore in venture debt which is on top of $5.5 million it raised in series A round in February from Accel, Omnivore and Mayfield.
From B2B to B2C
Clover, which predominantly enjoyed demand from restaurants and cloud kitchens, witnessed a staggering drop in demand due to the stringent lockdowns enforced by the government of India in the wake of COVID-19 pandemic.
“April was a tough month for us. We have two warehouses in the city but were only able to operate it at subpar capacity,” Avanish said.
Clover witnessed 70-75 per cent drop in demand volume, as cloud kitchen and restaurants stared at a bleak future.
This is when Avanish and his team decided to shift its focus from B2B and move to B2C model.
“One thing that was in our favour was we always focused on the quality and packaging of the product,” Avanish added.
Currently, Clover is generating 80 per cent of its revenue from the B2C and has surpassed its pre-COVID level demand.
The agritech startup will also be rolling out its website and app for customers who can directly order their needs.
The Omnivore-backed startup, in a soft-launch, inaugurated its warehouse in Hyderabad and will soon start operation. In the coming future, Avanish wants Clover to tap the demand in other metropolitan cities like Mumbai, Pune and Delhi.