India witnessed the highest tractor sales in the domestic market in 2022 on the back of four consecutive years of good weather and rising farm incomes. Another sign of a strong local economy is the growing used tractor market. Small and medium farmers are driving this domestic market. Riding this wave, MeraTractor, a Pune-based agritech startup, is creating a transparent ecosystem to help smallholder and marginal farmers buy the best agricultural mechanization products. Founded by Sajith Abraham and Monak Gohel, the startup assists partners his dealers in tractor supply, demand generation, tractor sales, name change paperwork, introduction of bank partners for his tractor loan, etc. We are building a “phygital network” that The startup also aims to become a new-age manufacturer, helping dealers (tier 3 to 6 rural entrepreneurs) sell agricultural mechanization products to smallholder and marginal farmers. .
Banking…
Abraham has a BTech in Agriculture from Junagadh Agricultural University, Gujarat and Gohel has an MBA in Finance and CFA. Abraham has extensive experience in the rural segment of tractor sales and has worked with several companies including banks involved in rural financing. He moved to Pune in his 2008 and worked in the tractor rental space while dealing with major banks Maharashtra, Andhra, Pradesh and Telangana.
Abraham says: New tractors were sold through dealerships, while the used tractor segment was largely unorganized. Most used tractor transactions were done without technical support or peer-to-peer. I was thinking of starting my own business in 2015, but I didn’t have the courage to quit my comfortable office job. Finally in June 2017 he decided to quit his job and start MeraTractor. ”
Goher knew Abraham because he worked for the same company. The two opened new regional branches across Maharashtra and linked a portfolio of agricultural businesses to those branches. Gohel quit her job in his 2014 to pursue a career in investment banking. Gohel said he received a call from Abraham in 2017 and expressed her desire to join Abraham.
Gohel says:we raised a small amount of money ¥I was able to raise 12.5 billion yen from friends and family to provide working capital for the business. I quit my job around the same time and that was the beginning of our journey. ”
learning
Our initial business idea was very simple. Abraham and Gohel had no technical background, but developed a listing website similar to the marketplace platform. The concept was that a farmer would visit the site, list a tractor, a bid would be placed, and once the bid was placed, the farmer would receive her SMS notification to either accept and close the auction, or continue the auction. To do. Abraham and Gohel expected buyers and sellers to pay a commission for each successful transaction. The duo scored their first deal on day one, but the money eluded them.
Abraham says: The amount was small, but the buyer and seller refused to pay us and avoided our calls. That’s when I realized that our business model was flawed. We had no control over the transaction and buyers and sellers did not visit our site for an extended period of time. So I decided to pivot. ”
pivot
Abraham says one thing that his experience in banking and the corporate sector has taught him is that any business needs revenue and can grow it later. he said: Narrowed down the seized vehicle market, especially financiers and brokers. Such vehicles (tractors) often lack proper documentation, damaged parts, etc. A financier sells these vehicles monthly, and a buyer (broker) repairs these vehicles and sells them to farmers. However, this segment lacked an organized and trusted network of brands. ”
Describing the agriculture scenario, Abraham said: However, agricultural mechanization of Indian farmers, of which more than 85% are smallholders, has been largely overlooked due to their ability to purchase. Challenges arise that start with and become difficult for unpretentious farmers. As a solution, we thought of bridging the gap between smallholder farmers and agricultural mechanization and access to financial instruments. ”
auction platform
Gohel says: We started using Whatsapp and Microsoft Excel. I used to send the list to brokers and call everyone to get the highest bid. However, there was competition from large dealers, and other auction houses were entering the tractor segment separately from cars, etc. They were targeting large “feeder” brokers or bankers.
“We then built an auction platform that is easy to use and available in local languages such as Hindi, Tamil and Telugu. We made a good offer to them to help small brokers and farmers to access vehicle financing from banks.With this new revenue stream, customer acquisition costs are virtually It was zero,” he added.
impact of covid
Covid lockdown has taken its toll on the team. Abraham says: ¥Every month, more than 100 vehicles will be cleared through our platform through our platform. Unfortunately, Covid-19 hit at the time and we weren’t prepared for it. We asked the core team for a pay cut and they all agreed and stayed with us. I saved more and borrowed more to get through the lockdown period. During the second wave, we were falling apart. ”
“Around June 2021, we got a call from Amrendra Singh of Dehaat and it was a ray of light for us. We needed to find a solution and raise working capital. Then we realized that we needed to go digital and change our business model: we decided to spread the risk and create different revenue streams,” Abraham added.
franchise model
Abraham and Gohel had already sold tractors and were helping brokers and farmers obtain car financing. The only thing missing was vehicle documentation, which prompted us to consider starting a MeraTractor franchise or an exclusive distributor at Tier 3 and Tier 4 locations.
Gohel says: I didn’t have to worry about getting an inquiry. We also promoted our brand through social media and farmers’ Whatsapp groups to increase brand awareness. We have brought them together on a common platform to enable you to transact on a transparent, trustworthy and hassle-free highway. ”
“Despite having fewer assets, a dealer-owned, company-operated model, the company manages the entire transaction and creates sustainable business propositions for farmers, dealers, financiers, and new tractor OEMs. I will,” he added.
go to the market
Gohel says: First, we will deploy platform services in every region. Understanding the viability of franchises in rural areas is very important. After understanding supply networks and other agricultural mechanization ecosystem opportunities, we will set up dealers in the area. Last year, we leveraged our existing network to sell 170 of his rotavators, agricultural equipment, through dealers. ”
“About a year ago we found ourselves losing revenue due to inefficiencies. This revenue loss was due to delays in tractor sales transactions due to manual processes. While building the software, I decided to take on senior roles and expand the team.Now all procurement channels and integration processes are technology driven.This has also helped overcome talent pool issues. Since we work with the rural segment, the freshmen or graduates we hire come from tier 3 and 4 areas and they are very impulsive in nature. We tend to make sudden decisions, and being technology-driven has helped us eliminate dependencies and streamline processes,” the entrepreneurial duo added.
cross selling
Abraham and Goher found several sources of income in addition to liquidating and reselling tractors. “We are partnering with prominent players to introduce financial products such as car insurance. We will soon introduce tractor warranties as part of our value chain. By selling in combination, the range of earnings is expanded.”
“The concept of agricultural mechanization products was born as a request from dealers when we visited them over the past three years. Providing financial support also prevents farmers from falling into debt cycles caused by other unfair practices,” said Gohel.
