KARACHI: There were lights, cameras and action. Stage fright–stricken young men walked to the podium and tried to impress “judges” who sat with their backs to the hall packed to capacity. The whole shebang had the look and feel of American Idol.
But the stars of the Friday afternoon weren’t singers. They were young entrepreneurs looking to win up to a quarter of a million dollars for disrupting some part of the business landscape within the agriculture sector.
The three finalists at the Pakistan Agri-preneurship Challenge — organised by SEED Ventures and Maersk Pakistan — had survived earlier screening rounds to earn the privilege of pitching their businesses to the panel of eight investors, including big names like Habib Bank, Invest2Innovate, Deosai Ventures and Sarmayacar.
First on stage was ZamindarTech, a B2B platform that connects agri input manufacturers to retailers. CEO Zubair Ayaz Asim began his presentation by profiling one of the 43 retailers his company is currently serving.
Startups pitch for VC funding at competition held by SEED Ventures, Maersk Pakistan
Based in a second-tier city of Punjab, the retailer sells 500-plus products with a working capital of $2,500. He goes to Lahore to purchase inventory and gets the orders delivered in 30-45 days. Sometimes, he’s handed fake products, thanks to the unscrupulous middleman or deal/distributor. Not only does he often run out of inventory he also loses about a quarter of his working capital because of logistical challenges.
Such skewed market dynamics give ZamindarTech an opening: the startup claims to offer competitive prices, promises doorstep delivery of inputs within 24 hours and allows retailers to access credit.
The startup’s monthly gross sales — called gross merchandise value (GMV) in the startup-speak — is currently $107,480. Mr Asim wants to increase the GMV to $16 million in the next eight to 12 months. His ask? Half a million dollars.
It was pitch-perfect (pun intended). What’s better than a business that uses a mobile app to cater to an underserved segment of a broken supply chain, right?
But the judges were unsparing — not only to Mr Asim but also to the other two entrepreneurs who followed him on the stage.
The potential investors asked piercing questions and tried, sometimes successfully, to punch holes in the three business plans, which were otherwise executed on PowerPoint rather perfectly.
“How’ll you cut out the middleman (dealer/distributor) who’s dominated this segment for so long?” asked one. “Why’ll a manufacturer deal with you and drive away its big-ticket distributor?” asked another. “How’ll you arrange the credit facility for retailers?” questioned another no-nonsense investor playing judge at the competition.
The session lasted longer than planned. Then came the turn of FarmDost, a seemingly simple business that solves the issue of inadequate storage of farm produce by selling growers hermetic bags at Rs400 apiece.
But the business isn’t as simple as it looks. The specialised bags serve multiple purposes, said startup co-founder Mehrul Hassan. These will have QR codes printed on them. These codes will help buyers identify growers through the app while allowing the startup to become a buyer/seller platform going forward.
“The problem is that farmers don’t have adequate storage. That’s why they’re unable to make timely sales,” he said, noting that better storage will let farmers make sales at the most opportune time.
Meanwhile, the startup will also start onboarding buyers of the farm produce, which is stored in hermetic bags with QR codes, in the second year of its operation. The whole process will take place on the app, which will generate Rs10m in subscription revenue from 1,000 buyers by year-two.
The judges followed up with tough questions. What’ll stop others from jumping in once the business model takes off? Why import hermetic bags? Can’t someone just put up a plant of hermetic bags locally and drive you away?
The last startup to present was AgryDunya, which supplies farm inputs like fertiliser, seeds, pesticides, and micronutrients to growers.
Manufacturers sell inputs to the middlemen who stock them and release the same to manipulate prices. CEO Faiq Hasnanin said his company was already listed as a dealer with manufacturers. As a conscientious company, it aims to cut out the middlemen and let small growers save up to 30pc in costs in addition to savings in the form of transport charges and hassle-free deliveries.
The startup began operations in May this year. Its revenue has already crossed $211,100 through 12,000 registered app users and four warehouses.
In an extended Q/A round with the judges, Mr Hasnain warded off tough questions, particularly about his lofty target of gaining the price-setting clout in the supply chain to end the exploitation of growers at the hands of the middlemen.
His answers must’ve been convincing enough for the judges as they declared AgryDunya the winner of the competition.
Zamindar Tech and FarmDost received the second and third positions.
“No investment figure was confirmed as the winners will first need to clear due diligence before receiving any offer from the venture capitalists,” said Aaqib Arsalan, project manager at SEED Ventures.
Published in Dawn, December 11th, 2022