Startups that have succeeded in the long run have one thing in common – they solve a specific problem. They are successful because they do this at a cost that makes switching well worth it for consumers. In other words, the combination of value and cost is more compelling to the end user than what they are currently offered.
This Agritech company, Agrikool, does mostly that. It was founded in 2019 by two agricultural specialists- Zamokuhle Thwala, and Palesa Motaung, and has since gained a lot of traction. Agricool makes use of technology in agriculture to provide a service to farmers that make them efficient and that directly impacts their bottom line.
The business
Primarily, this is what Agrikool does:
- It gathers much needed key information about the agricultural market to enable farmers to make the right decisions regarding what to grow and what to prioritise in the long and short term. This market information is crucial because it eventually helps farmers reduce their operating costs.
- It provides an e-Platform that links the smaller farmers to the larger retailers. When farmers list their available products, potential buyers can interact directly with them and negotiate a price. Agrikool ensures prompt payment and takes care of the transportation of the produce to the buyer.
Agrikool’s first large customer was Boxer Supermarket right in the middle of the pandemic. This is a classic example of luck favouring those who are prepared. Zamokuhle believes Boxer Supermarket would not have given them the business if their own supply market was not disrupted at the time during Covid.
The successes
The company has since on-boarded over 20 large commercial and 100 small growers onto their platform. Agrikool is said to have replaced the Durban Fresh Produce Market as an intermediary between large farmers and retailers. Their growth has been massive – estimated at about 400% every month in 2022!
Agrikool has completed two funding rounds, the first an amount in the region of 1,6 million from SAB Foundation in February 2021. This was followed by another amount in the region of 1 million from Google’s Startups Black Founders Fund (BFF) for Africa in September 2022. Agrikool was also amongst the top 4 Fintech startups that shared in the 2 million rand prize from AlphaCode in May 2021, and this R500 000 came with access to a tailored business support.
Reason why this is a winning business
- The service is in demand. Food prices are soaring and any opportunity to reduce inefficiencies in the farmer to retail value chain will make business sense.
- Farmers were mostly selling to the municipal fruit and vegetable markets and the traditional mechanism that includes agents put farmers at a huge disadvantage. Farmers would go to these markets with no indication of how much they are going to sell and at what prices.
In short, Agrikool has disrupted the market and is reaping the benefits all the way, no pun intended. Most importantly, however, the entities that are taking the most risk, the farmers, are much less exposed.
This is for me, a great business.
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