In India, an Uber for farm machinery aims to make a difference in rural areas
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In India, an Uber for farm machinery aims to make a difference in rural areas

Posted by | August 17, 2017 |

Uber has inspired countless businesses to adopt its asset-light and on-demand approach to their industries. The examples are countless. Food delivery, dry cleaning, jet planes, home services rental bikes, or even phone chargers to name but a few — but how about farming equipment?

That’s the case in India, where a startup called EM3 AgriServices is helping rural farmers literally get their hands on specialist (and expensive) equipment and machines that would ordinarily be out of their reach. The goal is to help them earn their livelihood with cutting-edge tech without breaking the bank.

The concept is actually quite straightforward. EM3 works with farmers who own equipment like tractors, harvesters and other mechanical implements by allowing them to ‘rent’ out their assets to help pay off the purchase or generate additional revenue. Farmers, typically those in remote regional with small holdings and limited capital, then get access to quality implements and machines on a pay-as-you-use basis on either an hourly or acreage pricing.

That’s important when most farms in India are smaller than three acres. Tight economics, and a reliance on loans to make big-ticket purchases, are thought to be a key factor responsible for a high level of suicides among farmers over the past twenty years.

“The average Indian farm holding is just one percent of what you’d find in U.S., so farmers aren’t able to afford technology, even basic mechanization, because the capital load is too high,” EM3 founder and managing director Rohtash Mal (pictured above) told TechCrunch in an interview.

And he should know. Mal, a 63-year-old self-confessed “corporate world veteran,” started EM3 with his son Adwitiya Mal (CEO) in 2013 after a spell in charge of agriculture machinery manufacturer Escorts gave him a glimpse into the struggles of Indian farmers.

“In the farm equipment business one thing became clear, we did everything we could to help customers buy our products, but the fact is that the small farm could not afford the rate of technology,” Mal senior said.

“We’re inspired by what happens in tech world, but this hasn’t been done in agriculture before. The need wasn’t there in a lot of markets, such as the U.S., which were the foundation heads of technology, but the need is here in India,” he added.

The company calls its business farming-as-a-service — or Faas.

Unlike Uber, which has pioneered an online business model, EM3 is ‘tech-enabled’ rather than ‘tech.’ That’s to say that while it uses common on-demand tech to manage supply-demand, customer data and more, the majority of its business is offline. That’s because, quite simply, its customer base remains disconnected from the internet.

“The majority of farmers are not on smartphones,” Mal junior said. “The smartphone penetration is increasing but it isn’t at critical mass yet so we have a physical on the ground presence.”

So where there are apps for those ahead of the curve, EM3 operates call centers for handling requests from farmers — both inventory owners and prospective renters — and it deploys local representatives in the villages that it serves. But even the select farmers who are online and own smartphones find something comforting and secure about talking to a person on the other end of the phone when it comes to business matters that impact their life, the EM3 execs said.

To date, EM3 has focused on central parts of India where it claims to have worked with 8,000 farms through its 10 service centers. Mal senior explained that its platform covers machinery and services that span all seasons, but customer activity levels do vary during different parts of the farming calendar and based on location, crop type, etc.

The startup recently partnered with the local government of Rajasthan, India’s largest province by size and a major agriculture producer, to make a push into helping thousands more farmers. It is planning further forays, too, after raising significant funding from investors.

EM3 closed a $10 million in Series B financing led by Global Innovation Fund and VC firm Aspada which will be put to work expanding into more regions, increasing its inventory and developing tech. EM3 previously raised a $3.3 million Series A round led by Aspada in 2015.

Further down the line, Mal senior said he can envisage its business moving into other areas of a farmer’s business where it believes it can add value.

“There’s no other company [offering this service yet, but I’m sure there will be me-toos,” he said.

“We are still significantly ahead, but will have to add more and more to the menu of services to keep our lead. We want to become more dedicated to the farmer and look for more opportunities in farming and adjacent spaces.”

Already there is competition with Gold Farm and Trringo, a subsidiary of automotive conglomerate Mahindra & Mahindra, opening similar services over the past year.

Interest in agritech in India has heated up in recent years. Earlier in 2017, Accel backed AgroStar, a startup that offers a range of guidance and e-commerce services targeted at rural farmers, in its first deal in the sector. Plenty of other VCs in the country have expressed their interest about getting into the space, which has the potential to harness the power of technology to help many farmers in a profound way.

Source: Techcrunch. Date: 2017-08-17