Indian Angel Network (IAN), world’s largest business angel group, has made an undisclosed investment in Gurugram-based farMart, an agriculture machinery renting platform for the farmers and by the farmers. The investment was led by Ambarish Raghuvanshi on behalf of IAN and he has also joined the board of the company.
Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP).Despite the tech revolution in the country, there has been no path breaking tech development in the agriculture sector. The farmers understand that hiring machinery is more economical and time saving than hiring labour.
80% of farmers in India own less than <1 hectare of land. Such small landholding makes owning an agri-machinery an unviable option for most of the farmers. On the other hand, the exiting rental market is highly unorganized due information asymmetry, no standard pricing and service and social barriers. To solve this problem, Alekh Sanghera, Mehtab Singh Hans and Lokesh Singh got together and founded farMart with a vision organize the renting market with the help of technology.
farMart is a tech enabled platform that helps farmers and local entrepreneurs rent out their under-utilized agricultural machinery to fellow small and marginal farmers in need on pay-per-use basis via mobile app and call center. The company was founded in 2016 and has been successful in enabling more that 350 farmers and entrepreneurs.
Speaking on the announcement, Alekh Sanghera, co-founder and CEO said “All the founders come from agricultural background, and are passionate to herald the tech era in agriculture which has been elusive till now. There are around 120 million agricultural households in India, and many of them still without access to finance, machinery and modern technology. We have been working with the farmers to provide them access to modern agricultural machines in order to enhance their productivity and lower their cost of production. At the same time, we are able raise the (often-low) capacity utilisation rate of agri-machines resulting in an alternative source of income for machinery owners thus promoting entrepreneurship in the rural community. The funding by IAN will help us grow at faster pace and develop a stronger product. We are excited to have Ambarish Raghuvanshi and other investors as our mentor and looking forward to his support and guidance to grow our business.”
Ambarish Raghuvanshi, the IAN lead investor, commented on the investment saying, “So far, Indian agriculture sector has not received much focus in the digital revolution of the country. The size of India’s agricultural renting sector is over $ 5 billion per annum and it was waiting for the tech disruption to make it more organised. Rural sector holds immense potential, with Increasing mobile penetration and government pushing digital payments, it is the perfect time for company like farMart. Alekh and the core team have profound understanding and expertise of the sector. The team has great energy and has developed a revolutionary product which holds the potential to disrupt the agriculture industry and make a huge social impact. I am really excited to join farMart board to help them scale and be a part of next agriculture revolution of the country.”
farMart is currently operational in one district and will be expanding to more than 20+ districts in Uttar Pradesh, Uttrakhand, Haryana and Madhya Pradesh. The company is working with 2 Harvard PhD economists to conduct impact evaluation studies of farMart’s impact on farmer’s agri-input use, productivity and incomes.