How DeHaat strengthens the roots of Bharat with technology

How DeHaat strengthens the roots of Bharat with technology

A miniature model of a rural farm store, perched atop a storage unit, catches my eye within this compact office. The workspace is characterized by open-plan desks, prominent company branding and motivational posters, and the model appears to be built to scale, showcasing the detailed design and store branding.

I’m inside the Gurugram headquarters of agritech startup DeHaat, in a nondescript commercial office building, where it also occupies several other small offices. The 10-year-old company combines technology with physical infrastructure, such as warehouses and franchised stores, to deliver app-based agricultural solutions for farmers and other related stakeholders. With projected monthly income of $Rs 230-250 crore in this fiscal year, is one of the largest and oldest companies in the industry. His commercial real estate occupancy is indicative of the way startups tend to expand: one small office at a time, until they’re big enough (and funded enough) to consolidate into one big workspace. DeHaat also moved into a larger space at Gurugram a few weeks after my visit. It is also based in Patna.

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A miniature model of a DeHaat rural farm shop
(Pradeep Gaur)

Agritech entrepreneurs in India have attracted substantial funding and media attention in recent times, with many offering a variety of emerging business models.

Building the right model

The miniature model injects spice into the otherwise quite functional office look and feel. It represents a typical DeHaat Center, or franchise store, run by company-appointed micro-entrepreneurs serving local neighborhood farmers.

There are 10,000 such centers in 11 states, mainly in western, eastern and northern India. The model’s presence in the office “reminds us of who we are, what we do and keeps us grounded,” says Shashank Kumar, 37, co-founder and CEO of DeHaat.

“DeHaat is a full stack model. We have been trying to bring everything related to agriculture under one roof for Indian farmers,” explains Kumar. “That means helping Indian farmers through every stage of their farming cycle, from soil testing to planting stage, by giving them better access to quality agricultural inputs such as seeds, fertilizers and pesticides, and advising them on a personalized basis, so they can reduce their cost of cultivation, they can optimize the dosage of fertilizers and protect the fertility of the soil or the water table. We also offer financial and insurance services, and then towards the end of the season we provide post-harvest services in terms of logistics or market linkage.”

Kumar is one of the earliest examples of a highly educated businessman who returned to his agricultural roots.

Having spent his early years in rural Bihar, where his family initially relied on a 3.2-acre piece of land for farming, he graduated from the Indian Institute of Technology (IIT)-Delhi and worked with a consulting firm before deciding to start DeHaat. in 2012.

DeHaat’s team of four co-founders is made up of equally well-qualified graduates of IIT and IIM (Indian Institutes of Management), a breed of entrepreneur who is just as comfortable working at the grassroots level with the Indian farmer as they are collaborating with global networks. Silicon Valley-type venture capitalists.

Perhaps there is a romantic appeal to this entrepreneurial trope of leaving corporate jobs for rural entrepreneurship, but I think you need specific traits to be successful.

A recipe for success

First, a boots on the ground approach. As the miniature model suggests, Kumar is aware of the importance of being grounded, building a significant local physical presence and having a deep understanding of the needs of the Indian farmer, the agricultural sector, its constraints and its economic possibilities.

According to Kumar, farmers save considerably on costs due to “better price discovery and the removal of middlemen,” and weekly crop advisory alerts result in better yields.

Linking the market with institutional buyers on DeHaat platforms offers better prices, he says.

Empathy is also vital. Convincing farmers to adopt the technology is a journey that requires understanding their needs and demands.

Kumar says DeHaat is trying hard to persuade farmers that they are long-term allies, rather than seasonal brokers.

“It’s not that we’re giving them everything they need, but whatever we do, it’s professional and transparent. Technology brings hope for the future and they are connected to the latest agricultural technique, to the larger world. It brings excitement,” he says.

Second, ambition. As the motivational posters on the walls highlight, DeHaat wants to climb. “We work with about 1.3 million farmers. There are more than 100 million farmers in India. And given the kind of response we’re getting from farmers replicating this model from one place to another, it gives me a lot of confidence. We are talking about working with 20-25 million farmers in India in the next four and a half years,” he says.

Although the company has grown 50 times in the last three years, it is an ambitious figure.

Finally, and perhaps incongruously, patience. Kumar and his co-founders spent years working on the business model before raising money from outside investors. They have raised over $150 million since March 2019.

“Shashank only raised money when he knew what to do with it,” says Mark Kahn, managing partner and co-founder of Omnivore, one of DeHaat’s investors.

Kumar says, “If you look at our journey, for the first seven years, we didn’t scale at all, our scale was very suboptimal.” He adds: “First, we built the experience for each and every feature. And then we digitized all the stuff and built a digital playbook. And that’s why you’re seeing 50x growth in the last 30 months. We don’t need to spend another four or five years in any new geography. We have all the right products and services that farmers need, and that is why the gestation period for us in any new geography will be very short. If you can build the right model, if you can build an institution, growth is not an issue at all.”

It is not an easy troika of skills, but to be successful in Bharat, in my opinion, this is what is needed. Just as crops take time to grow, business models and entrepreneurs also take time to mature and prove their worth.

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Aparna Piramal Raje meets with organization leaders every month to investigate the connections between their workspace design and work styles.

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