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Can Sequoia Surge-Backed Procol’s ‘Middlemen’ Bidding Platform Fix Inefficient Agri Procurement?

Can Sequoia Surge-Backed Procol’s ‘Middlemen’ Bidding Platform Fix Inefficient Agri Procurement?

Gurugram based totally B2B agri commodities procurement startup Procol gives get right of entry to to meals outlets and FMCG organizations to manipulate companies, monitor cost in real-time and transact so that they have got a faster stock turnaround time

Till date, Procol has raised close to $five Mn in investment from diverse buyers which include Sequoia Surge, Beenext, Blume Ventures and Rainmatter Capital

Procol has approximately 5000+ companies on its platform, which includes the likes of Haldiram’s, Big Basket, Future Group among others, and has attained INR 420 Cr gross margin volume (GMV) and internet promoter score (NPS) of 50%

The agri commodity landscape is riddled with inefficiencies and uncertainties, however the $400 Bn massive unorganised marketplace is now set for tech-enabled disruption to raze many of those hurdles. With the assist of supply chain startups including Ninjacart, Crofarm, Procol, Udaan, StarAgri, AgriBazaar, Farmpal amongst others, farmers and the agri community as a whole has controlled to triumph over a lot of the larger challenges inside the manner. 

At the lowest of the agri fee chain and the maximum vital issue are the farmers, followed with the aid of meals processors, entrepreneurs, retailers, wholesalers after which the end customers or manufacturers. While challenges of honest pricing, excellent, transparency and consider have existed for decades, they have come to a head with the Covid-19 pandemic. 

Furthermore, the lockdown duration has driven the Indian government to ease policies for tech adoption within the agri deliver chain so that farmers can now promote directly to the quit clients, through the available e-trading systems (eNAM) in addition to other systems in their choice in preference to being limited to traditional mandis. However, now that a majority of state mandis or APMCs are operational, the digital transformation appears to have taken a backseat. 

While a majority of the startups are focusing on the downstream marketplace i.E. Seeking to put off the intermediary from the equation and are helping manufacturers and groups connect immediately to the farmers, a few are looking on the disruption from an inclusive POV.

For Gurugram-primarily based B2B agricultural commodities procurement platform Procol, the idea isn't always to exclude everybody inside the fee chain. This includes buyers, dealers, investors and brokers, so Procol is permitting manufacturers to keep cash within the procurement procedure thru a cellular-based totally, tech-enabled procurement platform known as AgriBid. 

Founded via ex-Google, Zomato, OYO engineers and product experts Gaurav Baheti and Sumit Mendiratta in 2018, the company claims to have digitised the procurement operations for manufacturers which does no longer take away the middlemen however instead makes the layers extra green. Founder Baheti said the organization started out out addressing agri demanding situations, however then realised that that is an industry extensive trouble and billion-greenback agri corporations nevertheless use emails and call calls to collect costs, negotiate offers and acquire produce.  

“$100 Mn well worth of goods are being procured on cellphone calls and emails. This leads to loss of records, lack of transparency and agree with in purchases, unavoidably inflicting leakages within the procurement margins,” stressed Baheti.   

That is how Procol — which is short for procurement protocol —  became born. The platform offers get right of entry to to food shops and FMCG companies to control vendors, display fee in actual-time and offer financial get entry to so that they've a quicker stock turnaround time. “For the bigger producers, price and fine is the maximum vital element, and they will cross the greater mile to make certain they could achieve the exceptional margins. Similarly, for outlets, they look for higher stock turnaround in order that they should buy and promote commodities faster,” explained Baheti. 

In July, the enterprise raised $four Mn led by means of Sequoia Surge, along Singapore-based totally mission capital firm Beenext. Prior to this, last year, the organization had also raised $1 Mn from Blume Ventures and Rainmatter Capital. Commenting on the recent funding, Baheti said that the agency is presently the use of the fund to enhance the purchaser enjoy at the platform. 

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Can Sequoia Surge-Backed Procol’s ‘Middlemen’ Bidding Platform Fix Inefficient Agri Procurement?

How Procol Works? 

“We do now not provide carriers from day one,” clarified Baheti. Even though supplier discovery is one of the services offered by using Procol. Instead, it enables corporations not best find out companies, however also ensure that the costs that they may be shopping for from their present day companies/sellers are fair and obvious. 

In other phrases, the manufacturers or the stores themselves on-board their personal carriers onto the platform so that all the transactions happen digitally. These vendors are the equal middlemen that many agri supply chain companies are trying to replace, however, Procol feels they nevertheless have a function to play, and on the identical time, it’s not the same as traditional procurement groups on this area.  

“We are very exceptional from the conventional players, as we do not own the suppliers, the consumer owns the suppliers — it's miles their community, they themselves convey their vendors onto the platform because they need to manage them higher,” said Baheti. 

During the Covid-19 duration, Procol said that it witnessed that the provider base grew multifold. As deliver chains got disrupted during the pandemic, Procol customers began diversifying their supplier base on the platform in order that they were capable of mitigate the risk and the manufacturing become clean. “In truth, we've got helped organizations reduce value significantly,” he added. 

Today, the agency has about 5K organizations on its platform, along with the likes of Haldiram’s, Big Bazaar, BigBasket, Future Group among others, present across India. The enterprise’s internet promoter score (NPS) is over 50% and it has attained a gross margin price (GMV) of INR 420 Cr inside the span of two years.

Can Procurement Be Less Costly With Middlemen? 

Procol claimed that 90% of its clients obtained 10X go back on investment (RoI) in just 3 months of the usage of the platform. Citing one example, the cofounder stated considered one of Procol’s customers ended up saving approximately INR 2 Cr in only three months of the use of the platform to region bids and orders as opposed to the traditional channels, wherein there’s no charge safety and there’s no reliability that the price quoted might be followed thru. 

For instance, if a person is selling rice, every dealer prices costs in actual-time, and the manufacturer may be able to shop for them on the idea of who's selling for less, and this charge is locked on Procol. In terms of sales, the agency said that it follows a mixture of revenue streams, inclusive of subscription, transactional and license primarily based technique. Procol’s Baheti stated that the cost relies upon from one client to some other, costing everywhere between $10K to $100K. 

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Further, the employer did not proportion the transactional numbers, however said that for the reason that they provide services to big organizations, the wide variety of transactions is much less, however the extent of the transaction is high. At present, Procol caters to meals retailers and huge FMCG manufacturers, and it told CFT that within the coming months it's going to additionally be catering to the hospitality region as well. Also, its procurement platform has digitally advanced to cater to a huge set of clients and providers. 

“Previously, huge costumes who did now not have get right of entry to to companies, are actually able to discover companies on our platform on the cross. At the identical time, small providers who did now not recognize a way to promote to large organizations and businesses, we're allowing that to them as well,”  brought Baheti

In terms of roadmap ahead of Procol, the cofounder said that it does not look to make bigger its business to other geographies at this factor in time, because it believes in maintaining its focus on improving the consumer revel in, thereby bringing extra RoI for the customers themselves. “Currently, we are absolutely targeted on automating the whole procurement procedure, supplying visibility and savings for our customers.”

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