Farm Taaza in advanced talks to raise $6 million from Series A investors

February 25 2016 : F&B News
Farm Taaza, a subsidiary of Gram Suchana Solutions, is now in dialogue with Series A investors to raise $6 million for its next phase of growth in fresh produce supply chain management. The company says it is confident to source these funds within the next three months. Plans are underway to unveil an app for farmers and its customers from the modern retail and HoReCa sector. The company also plans to set up distribution and collection centres with wifi connectivity. It plans investments in cold storage units and GPS tracking for efficient logistics.
The company was incepted in August 2015 with an angel investor’s funding of $1.5 million. Its B2B model has made a positive impact on farmers and customers from the southern states, who have appreciated the value of reliability and convenience. From its current 100 orders a day, it is gearing up to reach 400 per day by this April. The company is next eyeing kirana stores to accelerate its revenues.
With revenues of Rs 6 crore since September 2015, the company hopes to garner Rs 100 crore in fiscal 2017. “We have two collection centres at Udhagamandalam at Kethi Pallada and Masakkal. At Chikkaballapura, we have our main centre and another at Machinalli. The intention is to expand operations because the demand has overshot the supply. We have now approached venture capitalists who have evinced interest in our business model because they feel we can disrupt this market using technology,” Kumar Ramachandran, CEO, Farm Taaza, told FnB News.
The business model, which adopts the concept of Fixed Price Purchase Agreement, ensures pricing adjustments to growers along with free supply of agri inputs like seeds and fertilisers. The big takeaway of this platform is to provide fresh produce with dependability in delivery between 8 and 22 hours of harvesting it from the farm to its retail and institutional customers. “Of 80 per cent vegetable transactions, 25 per cent comprise the exotic range covering broccoli, zucchini, English cucumber, Iceberg lettuce and Chinese cabbage,” he added.
It has a comprehensive offering of around 90 stock keeping units (SKUs) and has achieved a supply rate of 20 tonne last week that comprised tomatoes, carrots, gourds (snake, bottle, bitter) potato, one onion besides cabbages and cauliflowers contributing to a significant share of sales, according to him.
There is a huge growth in the fresh produce supply chain management with room for many players to co-exist and succeed. Kirana stores for fresh vegetables and fruits will continue to thrive. From the southern states, we will move towards Maharashtra and Gujarat. We will also provide cell phones to farmers and expect to achieve 80 per cent of our sales through the mobile app. From this, kirana stores will account for 60 per cent, retail trade 25 per cent and HoReCa – 15 per cent.
In this business, communication with farmers, transporters and customers forms a critical component. A big challenge for fresh produce supply chain startup is the time taken to comprehend the needs of the farmers and put up with vagaries of nature, according to Ramachandran.