efarm business plan : concept, operations, current status, financials, funding requirements. updated ad of : July 2010 author : venkat (founder , MD)

1. eFarm
Enabling FArmers to Reach Markets
An Agri Supply Chain Platform linking farmers and consumers
BUSINESS PLAN
www.efarm.in July, 2010

2. Elevator Pitch
What does the Company do?
•procure vegetables and fruits from farmers and to supply to bulk customers in cities
•create end to end supply chain infrastructure, processes and technologies to make perishable
produce distribution more efficient
Key pain points in agri industry : Middlemen dominated ,more than 95% Unorganised , Over
40% wastage, high uncertainty in availability/price, low technology usage (IT/Post production)
Key Benefits of eFarm :
For Farmers For Buyers For Inter mediaries
Wider market reach Lower/Stable prices , Better quality Planned capacity utilisation
Accurate weights , Timely Delivery Stable work / fees
Better prices
Linkages to supply and
Accurate Weights Better payment terms markets
Market information MIS
Key differentiators?
Professional approach , Connecting the dots ,Double bottomline (social + financial goals) BOP
enterprise , shared platform with multiple alliances / entrepreneurs ,Outsource non-core
activities

3. Mission and Vision Statement
Vision
To be India‟s first fully integrated
agriculture supply chain by
2015
Mission Statement
“One by One”
1 district at a time ,
1 city at a time
1 crore turnover by current year
To integrate technology, industry
best practices and social
entrepreneurship in our agri-
supply chain business to benefit
both farmers and customers

4. Market and Industry Environment
The Indian Agri Supply Chain
Current State : Too Many Steps , Too Little Value Addition
Harvesting of
Terminal markets to
Vegetables • Unorganized, unregulated, unprofessional & neighborhood wholesalers
unprofitable
• Lack of demand/supply data
1 • No reliable sales, distribution, marketing channels
• Poor logistics and storage
• A Middlemen’ dominated market 5
•No IT/ERP usage – decisions are adhoc and arbitrary
Regional mandi to Wholesalers to Retailers
4 Terminal markets near
A local mandi large cities
auctioning 2
Local to Regional mandis
for Auction
6
Loss in transit
40%
Price hike Retailers to Dining Table
3 End to end
> 400%
7

5. So many solutions , but why still a crisis ?
R&D
ICT
solutions
Increase
yield
Contract
farming Export
Indian market
Agriculture
Cold
chain Modern
Micro
retail &
finance &
logistics
Grants

6. Market and Industry Environment
Market Scenario
Burning Crisis Or Booming Opportunity ?
Data Value Notes Organised retailers
Fruits & Vegetables (Total market) 668800 Cr Organised + Unorganised are non-players
when we see
overall volume
Organised segment 8216 Cr < 1.2% of total market
Total Volume of fruits & vegetables 100 Million
produced Tonnes
Amount processed 1% World avg ~ 40%
Amount exported 1% Not in top 25 in world exporters
India is a World
Wastage in transit & handling 40% ~ Rs 40000 Crores lost revenue leader in
PRODUCTION but
Our production costs are one of still IMPORTING our
the most economical in the world food to meet
High wastage in the „chain‟
DOMESTIC demand.
Average per person monthly
is counter productive to any 68 Rs But11% oflogistics expenses on food
Our monthly costs are the
Virtually non player
increases inin F&V (Urban)
expenditure yield MOST EXPENSIVE ( 2.5 times the in global agri
world avg. !!!!) industry
Avg. per person monthly 8 kgs
Source : IMAGES F&R Research Study , Govt of India , Dept. of Agriculture

7. Market and Industry Environment
Competitor Quadrant
Pockets of Strength But Collectively a failure
Price Organised Players
•F&V focussed stores
•Premium stores Low volumes, Hit by
(e.g Pazhamudhir
(Organic etc) recession and low
Nilayam)
profitability
•Branded Retailers Low High
(Reliance , More etc)
Volume , Volume, Premium stores
:Sourcing and regular
•Push carts ,
street
High price High price •Kirana stores supply issues
vendors
Terminal markets
Volume Lack of standards,
transparency,
•Regional/Terminal markets trader/broker
Low High dominated
Volume, Volume,
Push carts & Kiranas
Low price Low Price Local presence to end
•Commodity exchanges
customer , but high
•Village mandi wastage
(e.g. SAFAL)
As eFarm connects all players and acts as buyer or
eFarm seller in different segments, it will have a wider
footprint and better control on end to end profitability

8. Key Issues and pain Areas
The Farmer’s Crisis
The ‘REAL’ reasons

9. Key Issues and pain Areas
Marketing : The missing link ?
Other industries have differentiated
production from marketing/sales
Agriculture – Farmer handles both
roles
Brands have value !! Indian
products though superior have not
established a brand

10. Customer Segment
Serve Entire Customer Spectrum
Huge domestic demand, Escalating prices & Unmet needs
Low Income Middle High Income Hotels & Food & Export
Group Income Group caterers Drink • ~1% of
• > 40% in Group • ~5% in volume • ~25% of processors volume
volume • ~ 20% in • Buy from retail volume • ~5% of • Best quality /
• Buy from volume chains • Buy from volume specific
neighborhood • Quality & wholesale products only
• Buy from • Product
markets street vendors variety mandi specific buyer
(evening) • Price + conscious • Large volume
• Pay more for Quality + fixed price
less quality conscious range
Organised retailers are crowded in this space
Rest buy from wholesale mandis & streets

11. The solution definition
Is there a supply chain system which
will work effectively in India ???
•Product Category : Perishable food items
•IT Systems usage : NIL
•Management team : Illiterate and average age of 55
•Age of company : Over 150 years
•Customer Segment : From slumdwellers to crorepathis
•Operational efficiency : Six sigma !!!
The Mumbai Dubbawallahs !!!
•Key success factors :
•Highly decentralized operations – agile, flexible , scalable
•Use of low cost transport medium – trains
•Use of human power for last mile delivery – No Fuel related hikes
•Strong customer relationship – personal , localised
•Simple coding, routing, labelling system – operates even without
electricity !
•Delivery excellance – fixed time , professionalism

12. The solution definition
What is eFarm ?
The Big Picture – Connecting The Dots
Value added resellers
Sorting , Grading , Processing, Packing
Storage
Warehouses
Bulk buyers
Exporters
Farmers
Cooperatives
Collection centers
Kiranas
Self Help
Groups
Hawkers
Village ICT kiosks
Phone booths Logistics Fleet Small Independent transporters
Mobile operators operators Intra-city small tempos

13. Value Proposition
The eFarm model
Unlock revenue potential across the value chain
Cleaning / Packing
Quality Routing
Inspection/ Grading
Long haul
Transportation
Rural Produce Local vendors
Collection Centres Small retailers
Farmers
Urban area
Local Distribution centre
Distribution
Compost/Manure Food Processing
from waste units
Bulk buyers
(Hotels / Caterers /
Exports
Retailers)
eFarm Common Services
Planning & Call centre / Training &
Research Technology
Coordination Communication Support

14. Value Proposition
Key Products / Services
Vegetables
Fruits
Exotics / Organic Produce Marketing
Agri technology
Processed Items Solutions
Training
Compost
Non perishable Commodities (future)

15. Key Partners
Technology Food processing NGO – Outsourced
Labour
Farmer network
Market Linkage
Programs

16. Key Clients
‘Hotbreads’ Mahadevan’s Chain of Fine dining restaurants in Foodcourt at
Chennai (OCPL) ExpressAvenue
Mall
(asias’s largest)
Foodcourt at a Upcoming Indian Army .. And several local
software park Kiosk South Zone HQ vegetable vendors
Chain Canteen (Outlet) as well…

17. Business Model
Pricing Scenario : Typical ‘mandi’ Situation
32/kg 42/kg
Eg: Ooty Carrots (As of 29th 28/kg
June 2009) 24/kg
22/kg
20/kg End
customer
5/kg 12/kg price
Farmer’s Regional Metro Terminal Neighbourhood Kirana Branded Premium
market
mandi Market market stores, Retailers Grade
(In Ooty/ (Mettupala (Chennai) (Thiruvanmiyur Push (Export)
Kothagiri) yam) Chennai) carts
500 % Price hike
Source : Ooty market traders, Chennai traders, indg.in
 Over 500% Price hike on average to customer , but no value addition
 Changes hands several times: 40-50% is wasted – which adds to the costs
 Prices set at each intermediate point arbitrarily by brokers/agents without
any planned demand/supply data
 Farmer typically operates at 25% loss , End retailer less than 5% net margin

18. Business Model
Pricing : The eFarm solution 30/kg
Export prices
become
Eg: Ooty Carrots (As of 29th 19.75/kg viable and
June 2009) competitive
13.5/kg End
End customer
6.5/kg s see 30%
Farmers are Wholesale customer drop in
paid 20% buyers see
higher than a 33%
price prices
current drop
prices to
ensure
profitability
Farmer eFarm wholesale eFarm retail
(at Mylapore (at eFarm powered outlets
Distribution centre) and customer deliveries)
Reduced from 500% to 200%
 Assumptions : Transport Rs 6000 for 4T truck , Operational expense @30%
 Wastage reduced from 40% to 5% owing to prior demand data , and less intermediaries
 Customers see a 30% drop when compared to prevailing market
 End retailers get better margins , promoting more sales & entrepreneurship in F&V
 eFarm’s net margin : 10-15%

19. Business Model
Ground Operations Overview
Hub and Spoke with localised,inter connected nodes
Cooperatives Hub and Spoke Model For Catering/Hotels
Producer Scalability and Organic Growth
Corporations
Exporters
Forward Logistics
Rural (Fresh produce) Urban
SHGs
Collection Distribution
Centres Centers
Food Processors
Reverse Logistics
( Manure , Farmer supplies)
Bulk buyers
Retailers /
Small & mid sized farmers
Mom & Pop stores
•Collection centres spread across a 10 hr(max)
driving radius
•Distribution centres across key metro region
•Long haul trucks(4 tonne) connect collection
centres & distribution centres
•Local distribution use mixed transport mediums for
last mile connections

20. Business Model
Technology Overview
Behind the scenes
Open source
Tools &
technologies
AgriXML
As a dataXchange
format

21. Business Model
Technology
Components and Features ( Work In Progress)
Backoffice Systems
•Customer relationship management
•Supplier Relationship Management
•Demand/Supply Forecasting
•Order management & fulfillment
•Accounting & Financial Mngt
•Mobile/SMS gateway interface
•Voice based interface
•MIS & Data mart
Collaboration and B2B trading
platform
•Content : Daily price lists, Schedules,
Trends , Buyers guides
•Forward/Reverse bidding
•Search / Track items
•Delivery tracking
•Agri specific social networking

22. Time Lines
•Completed 2 years of pilot operations and trials in Tamilnadu region, with Chennai as key
destination
•Over 1500+ farmers, grower associations, transporters, buyers , NGOs and partners identified
and enrolled
•Regular supply source established from 5 main regions in TN, Karnataka, Andhra
•Multiple market channels for F&V sales from slums to star hotels established and operational
•Over 200+ individuals, students trained in agri business fundamentals through training programs
Apr-09
Nellore Agri SEZ ,
Indian delegation member Jun-09
First eFarm powered store at
Feb-08 May 08 Dec-08
Neelangarai
Concept Initiation Portal launched TePP Grant from Govt
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09
Jan-08 Sep-09
Jul 08 Mar-09 May-09
Live Trials begin Launched Organic Sales Press coverage :
Hindu, TOI, NDTV

23. Management Team
Founders
• Venkata Subramanian Founder & Managing Director: (venky@matchboxsolutions.in )
MS (Computer Science), University at Albany, NY , B.Arch , IIT Kharagpur (1995) ,
India
12 years of experience in IT industry , lead key accounts in BFSI for Wipro, Satyam
in USA. Very strong expertise in analysis & design of complex systems , portal
development , back office operations.
Responsible for overall strategy , technology and public relations
• Srivalli , Co-Founder, CEO (srivalli@matchboxsolutions.in)
MBA , B.Com Taxation
8 years experience in Sales, Marketing, & Operations. Has run two start-ups and
organised fund raising for NGOs as part of CSR programs.
Responsible for operations, business development, finance, administration
• Consultants and advisors from leading agricultural universities, management schools,
government and industry
Combination of different background ,skills and experience to provide creative
perspectives to solving key problems in the supply chain area

24. Organisation
How is eFarm managed ?
COO CEO
Venkat Valli
Finance & Advisors
Distribution
Accounting
Current Team Size
Sales & Board Members 15
Technology
Marketing •Sourcing – 2
•Delivery – 2
Investors
Sourcing Social Initiatives •Processing – 3
•Admin – 1
Logistics Recruitment
Alliance Partners •Business Dev – 1
•Transport – 2
•Interns – 4
Consulting
Over 60% of staff
are
CORE TEAM EXTENDED TEAM differently abled

25. Key benefit to farmers
Organised Collection Centres
Pickups close to villages reduce transport costs to farmers
Vehicle goes to individual Farmers bring the produce and it is checked Fresh oyster
farm locations/collection and weighed at site location itself mushrooms
centres

26. Key benefit to farmers
Payment : Better prices, on the spot
Farmers being paid on All grades being Women farmers paid
the spot based on picked and price more to encourage self
output arrived based on help groups.
quality
Training farmers on
how to arrive at
prices based on
market data

27. Key benefit to farmers
Data collection from farmers
Production data
• Produce name, variety
• Grade
• Typical yield at harvest
• Harvest cycles
• Cost price at farm gate
Farmer information
• Name
• Address
• Contact number
• Preferred mode of payment
• Bank / Post office details
• Photo
• Attestation

28. Key benefit to farmers
Price determination through cost price
analysis - worksheets
•Tools and
calculators to assist
farmers in
determining their
•Sale price
•Cost of Production
studies in key
produces

29. Key benefit to farmers
Market Analysis and Decision Support
Koyambedu
What to grow ? nadu tomato
How much to grow ?
When to harvest ?
Where to sell ?
At what price ?
•Head to head comparisons across
•Markets
Ottanchatram
•Insight - Support level prices and nadu tomato
inflection points
•High / Low variations
•Identifying ‘hoarding’ and
‘cartelisation’
(data courtesy : TNAU-INDG market information
portal)

30. Social Impact : BOP segment Murugesan,
coconut
farmer, with
graded
coconuts
Small
tempos for
local
deliveries –
powered by
eFarm
Panjali picking up vegetables from our Mylapore centre
Only a eFarm
phone call mobile store
away … a at an old
vegetable age home
vendor
enquiring
prices

31. Spreading the message
Workshops, Training, Agri business entrepreneurship development
Innovations in Tie ups with Agri
agriculture retailing research and Agri eFarm office and
business incubation godown at
Talk at MOP centres Mylapore , Chennai
Vaishnava womens’s (ICRISAT)
college, Chennai
Talks in
management (centre)
schools and Setting shop - Our
institutions home became the
(IFMR , IBS) godown & store.
Field trips to villages and address Conferences and
Farmers gathering trade shows
Upgraded vending
carts , standardised
weights and
measures

32. Market landscape
Competitive Scenario
 Food distribution companies (Sodexho )
 Cater to high end segments , costs prohibitive
 IT-Driven Procurement Platforms (Spot market exchanges (SAFAL SNX))
 Failed due to too much technology , low adoption by farmers
 Contract Farming (Naamdhari , maxworth green orchards)
Opportunities for  A failure in India – farmers don’t understand legalities, production
CO-OPETITION carries risks and saps management attention,land area fragmented
Where we may  Social entrepreneurs ( earthy goods , aakruthi )
overlap them in  Similar approach , But all in early stage
some areas,  Organised Retailers ( Indian chains, MNC chains, Big store formats)
but
complement them  Branded chains – stiff competition for small domestic segment , high
in others costs, use local mandi as primary supply source, deal only top grade
 Govt. Regulated Markets/Mandis ( Vashi, Azadpur, Koyambedu)
Collaborate to  High volumes, but unorganised – middlemen dominated
Compete
 Commission agents / Wholesalers / Vendors (Several local players)
 Primary dominant segment, but not professionally organised, only
localised to area

33. Market landscape
Market Size
Quick calculation : (Taking a single Tier I metro city in India as sample)
Typical Metro (Tier I) population : 8 million
Avg. consumption : 500 gms of fruits and vegetables per person
Volume : 4 million kgs = 4000 tonnes
Value : 6 crores per day (at Rs 15/kg average blended price)
Even a 1% penetration by eFarm in this market
= 6 lakhs Turnover per day = 20 crores per annum per METRO

34. Market landscape
Entry barriers
 People Barriers (When working with farmers/unorganised sector)
 Literacy barrier
 Cultural (language , caste etc) barriers
 Building Trust takes time
 Information Barrier
 No reliable/accurate supply or demand of industry
 Technology usage/penetration very low (except mobile phones)
 Financial Barrier
 Years of neglect of industry , investments have dropped
 Financials of farmers – such as cost of production are unknown ,
making pricing negotiations a challenge
 Operational barrier
 Crisis management on daily basis
 Myths ,emotions, hype around farmer issues and crisis status
,blurring reality

35. Financials Figures in INR
15 crores target
in 3 years
Figures in
‘000 INR
Assumptions
•Chennai/TN operations already stable hence
fast growth viable in home ground
•As technology+processes stabilise, margins
would improve with lower wastage
•Gradual shift to high margin , niche segments
•Pilots in other metros to start in mid ‘11 and
reach full scale by end of ‘12
Exit Options / M&A
•Large retail chains(MNC’s) entering India
•Hotel industry majors
•Food logistics/distribution companies
•Farm equipment / Agro processing companies
•Technology providers in agri space
•Food parks / Agri SEZ
•PPP initiatives with Government (local /central)

36. Where is funding most critically
needed ?
Establish local collection centres
•Ensure self sustenance though local
Forward (Bulk produce, Processed items)
sales
•Standardize produce grading/packaging
Reverse ( Agro compost, farm supplies etc.)
Collection
centre
Establish distribution centres in
Village (local) metro neighbourhood
Bulk distribution of goods
Establish multiple local marketing
channels
- Supply to local markets, shops,
Distribution
centre
catering,processing industry
(Neighbourhood)
Large town
(Regional)
Establish technology backbone
Manage supply chain , MIS, Customer
Portal
Establish marketing channels in a
large metros (e.g Chennai,
Bangalore , Hyderabad, Mumbai etc)
Outdoor mall
for processed foods & Niche
Retail channels / outlets
Large (processed foods) products
Metro - Supply to Large retail chains ,
boutique outlets

37. Investment Snapshot
•Company structure :MVS eFarm Pvt Ltd How will 1 crore be utilised ?
 Funding Requirement
 Year 1 : Rs 1 Crore (~ 225K USD)
 Year 2 : Rs 3 Crore (~ 700 K USD)
 Valuation Expected : 8 Crores
 Justifications : cash flow positive , sales
volume, positive net margins, domain
What will 1 crore achieve ?
knowledge , technology niche, early
Setup & reach steady state operations for
mover/leader
• 2 urban distribution centres in chennai
metros
• 5 rural collection centres across S.India
region
• Establish core technology backbone and
end user self service portal
• Bring in professional /senior staff

38. Risks and Gaps
Key Risks Besides Investment, we also
 People / Cultural issues at need support on :
grassroots level  Government liasioning for
 Localisation of concept in each ground level support
zone is critical  Expand partner network of
 Agri cultivation risks – related agencies such as
weather, diseases, pest affect microfinance , agritech
supply companies, logistics companies
 Need to be anticipated , to aid stakeholders in network
alternatives planned  Alliances with mobile , IT
 Financial risks – low interest/ companies for building tech
risk appetite amongst investors backbone with rural reach
in agri sector  Establish ties with key brand
 Potential cash crunch in retailers , MNC chains for long
expansion , need clear success term supply contracts
to change existing mind sets

39. eFarm in the news
•TATA NEN Hottest startup 2009 nominee
•IIM Kozhikode Whiteknight 2009 Business
Plan contest winner
•IIM Ahmedabad Leverage 2009 Showcase
shortlisted startup
•In the press
•Entrepreneur , Sep 09
•The Hindu magazine’s Ergo tabloid (Mar
2009)
•Times of India , May 2009
•NDTV News , June 2009
•Featured in leading e-zines – yourstory.in,
startups.in
•Featured in Tamil press- Kumudham ,
Dinakaran
•Outlook Money , June 2009
•JADE , June 2009
•Academic
•Faculty for Food SCM course, MOP
Vaishnava college
•Key note speaker – TNAU conferences

40. Thank You
Venky
venky@matchboxsolutions.in
98847 61354
Valli
srivalli@matchboxsolutions.in
11 loganathan colony
Mylapore, Chennai 600004
Ph : 044-43577236