This agri-tech startup has built a unique Grain Bank model that helps farmers achieve higher incomes.
Founded by TWO young entrepreneurs from Bihar, Kishor Jha and Praveen Kumar, Ergos has been building a unique “Grain Bank” model that enables farmers to digitise their foodgrain stocks data and also provides doorstep access to end-to-end post-harvest supply chain solutions to the farmers by leveraging a technology platform to ensure seamless service delivery. In the last five years, the Grain Bank has consistently helped farmers achieve significantly higher incomes.
Recently, Aavishkaar Capital, the impact investing arm of the Aavishkaar Group, announced an investment of Rs 35 crore ($5 million) in Ergos as part of the latter’s Series A funding round. Aavishkaar Capital had seeded Ergos in 2015 at the ideation stage and has worked with the promoters in scaling this venture. The Series A funding is expected to be a Rs 100-crore round with an Aavishkaar Capital limited partner and a technology venture capital fund also set to join this round.
The Ergos platform, piloted in Bihar, operates like a bank and offers storage, digitisation, credit and liquidation facility to farmers through a single platform, says founder and CEO, Kishor Jha. “The Indian agriculture space is dominated by small and marginal farmers who produce less than a lakh rupees worth of crops in a year. If it is grain, it would be 40-50 quintals only. Our intend is to build an ecosystem as close to their farm-gate as possible. These small and marginal farmers rarely go to a mandi or bigger market to do transactions, and remain deprived of institutional services and quality products at a reasonable price.”
According to Jha, India needs a model like Grain Bank, which enables small farmers to access institutional
warehousing services, credit and market linkages right from their farm-gate in a complete transparent manner even for “one bag.”
So Ergos tech-enabled a grid of farm-gate based micro warehouses for small and marginal farmers across the geography to digitise their grain bags which becomes digital financial assets for them to click and take loan, sell and release as per their choice. As a result, these small farmers create sustainable enhanced and secured income for themselves, in other words doubling their income in 12 months, explains Jha.
Reflecting on his journey, Jha comments: “Building an early stage tech focussed agri-business required continuous support from Aavishkaar Capital. We believe our unique offering has the potential to offer the farmer significant value. Our focus is to build this GrainBank to serve post-harvest requirements of all farmers with a focus on small and marginal farmers. With Aavishkaar Capital’s backing and other investors set to join us, we intend to rapidly scale into nearby states and service more than a million farmers by 2025 with over 2,000 branch locations.”
Ergos supports more than 20,000 farmers on its digital platform and has a physical footprint in more than 60 locations. Jha says, “When India needs one GrainBank at each gram panchayat to service 140 million farmers, we are all set to build thousands of GrainBanks across the country to serve millions of farmers.
Aavishkaar Group, as an impact investor, helps entrepreneurs via equity funding, venture debt, microfinance, investment banking intermediation, consulting, research and access to global networks.