"We Got Funded!" UAE-Based Produze Raises US$2.6 Million Seed Round To Bring The Power Of Technology To The Agriculture Industry
As a platform that serves to directly connect agricultural producers with retailers, Produze's mission is to digitize the agriculture and food sector's procurement operations within the Middle East.
UAE-based agritech firm Produze has raised US$2.6 million in a seed financing round led by Accel, a US-based venture capital firm that is known for being one of the first investors to back now-famous enterprises like Meta and Spotify. Produze's seed round also saw participation from India-based pre-seed fund All In Capital, as well as the founders and CEOs of India-based companies such as agritech firms Ninjacart, Stellapps and Sammunati, apparel platform Fashinza, digital trade finance company Drip Capital, social e-commerce venture CityMall, and trading platform DhanHQ, among other investors.
As a platform that serves to directly connect agricultural producers with retailers, Produze's mission is to digitize the agriculture and food sector's procurement operations within the Middle East. "We saw consumer e-commerce benefiting a lot from technology, but B2B commerce, especially for agriculture and food, hadn't had the chance to use technology to its advantage," explains Ben Mathew, co-founder and CEO of Produze. "We thus started Produze to bring the benefit of technology to retailers and agriculture/food producers, such that retailers can discover innovative and quality products, get competitive prices and reliable availability, while producers directly transact in international markets."
With this seed investment, Mathew and his fellow co-founders -Gaurav Agrawal, Emil Soman, and Rakesh Sasidhara- hope to advance their firm's underlying vision. "We will be using these funds to further enhance our supply chain technology and procurement capabilities, which will bring higher quality and more affordable agri and food products for our partner retailers and distributors," Mathew says. "This will include further digitizing our network of producers, digitizing import/export operations, as well as quality assessment. So far, we've seen an overwhelming response from our 12 customers who are top retailers and brands in the Middle East region, and we're now looking to expand further into the remaining six GCC countries, UK, Netherlands as well as Germany." Meanwhile, the startup is also inviting applications from retailers and distributors on its official website.
When it comes to creating impact, however, Produze's main focus lies in negating intermediaries –a prevalent feature in traditional agriculture and food procurement cycles- which Mathew argues creates a win-win situation for both the producers as well as the retailers. "Cross-border supply chain for agricultural produce today is fragmented with several intermediaries and poorly managed processes, which creates inconsistency in quality, inefficient prices and wastage- leading to loss in value for the retailers and distributors," he explains. "A tech-enabled direct source-to-market approach, on the other hand, helps retailers with more flexibility to shorten their procurement cycles, get assurance of quality, competitive prices, and access to a wider range of innovative food products. Subsequently, this also helps agri producers and food innovators with direct access to relevant international markets, and the ability to get higher quality feedback to improve their products and grow their business."
What is particularly notable about Produze's ability to create more efficient procurement cycles is also its reduction of food waste- a food security issue that is rampant across the globe. Mathew explains this facet of his firm's services with a couple of recent examples. "Take, for instance, the fact that in the traditional supply chain, for crops such as groundnut and chickpea, some importers see wastage of almost 20%," he explains. "But with our approach, we bridge the demand-supply gaps by bringing them closer, in addition to controlling the entire supply chain to protect the products' moisture, and reduce the wastage down to just 1%. Another example is bringing one of our retailer partners closer to an innovative mango processor directly at source with products like mango millet muesli, mango ketchup, mango ginger jam, etc. These are products that are pure, fresh, and affordable, delivering a superior customer experience."
With its new infusion of capital, Mathew is already looking towards other existing issues in the ecosystem (such as increasing logistics costs) that can be addressed through Produze's technology-driven approach. Such a results-focused approach is also what he suggests his fellow agritech entrepreneurs to keep in mind when seeking to raise funds for their enterprises. "The agriculture and food industry is one of the oldest industries, and businesses in this space are highly value-focused, and so, it is important for entrepreneurs creating innovative solutions in this space to work closely with the industry experts and see what they're already doing well and where new value can be created for them," Mathew says. "Also, agritech startups can become cash guzzlers very fast if not managed well. Make sure to focus on starting small, monitoring unit economics very tightly, and passing the benefits to your customers and partners."