Why we invested in Procol.

The bread that you ordered online from Grofers or Milkbasket, was in turn ordered by them, from their distributor through a procurement platform. The distributor too ordered the bread from the manufacturer online – perhaps an email or perhaps through some procurement software. Either way the units were tracked, taxes were paid, records were captured and later fed into the accounting system.

The manufacturer however ordered the flour for the bread not online but in all likelihood via a phone call, from the aata wholesaler. The aata wholesaler probably called the consolidator at the mandi who purchased directly from the farmer. No online records are needed for they have been buying from each other for decades. Records are kept on small paper chits and then tallied weekly or monthly or whenever some settlement is needed.

This is Asia’s largest Jeera (cumin seed) market at Unjha, Gujarat. Purchases happen via handshakes, phone calls and records are kept on paper chits.

The Indian agricommodity market is broken.

It is not just the traditional methods of transacting – offline, nontransparent and inefficient – that impact the agricommodity market. The entire system is riddled with inefficiencies, e.g., the lack of standardization in food grading means that you are forced to rely on the same supplier lest the trial and error impact your product event it means higher prices. The small size of farm holdings means multiple intermediaries to buy it, sort the produce and then it, all of which mean a more elongated and expensive supply chain. It is estimated these add as much as 10% additional costs – ~$50b or so, to the $482b agricommodity market, all of which pass on to us, the consumers.

Gaurav, Sumit and the Procol team want to change that. They are rethinking the future of the agricommodity supply chain in India, with a view to make it transparent, efficient and online.

They have started their journey at the highest leverage point for technology in the agricommodity supply chain – procurement. Their enterprise platform Agribid helps companies such as Future Group, Bikanerwala and others order and purchase commodities through a transparent auction. The presence of larger companies helps attract their thousands of suppliers aboard who begin now to get the benefits of scale. Along with procurement, Procol is gradually adding other components including invoice generation, transportation, tracking, grading and credit to work towards a complete marketplace offering.

Why we are investing in Procol.

Blume is excited to partner with Gaurav, Sumit and the Procol team in their journey to restructure the agricommodity procurement stack. Our agritech thesis spotted a large opportunity in the post-harvest go to market space / agri marketplace segment, and we have been exploring this for a while. But in venture investing, the market size and opportunity come second. What comes first is the team. And it is when Gaurav met us and shared the Procol opportunity, that we committed to go all in!

Gaurav and Sumit just before their YC interview in 2018, which sadly didn’t go their way.

Gaurav and Sumit met at Zomato, and stayed in touch, even as they moved on to different roles (Gaurav to TableHero, Sumit to OYO) bouncing off entrepreneurial ideas and passion projects of each other – first a gamified stock trading site, then a blue collar jobs site and then finally Procol (procurement protocol). They bring together strong product orientation, terrific business + financial insight (not always seen in tech founders) and a passion and hunger to leave a dent in the universe, all in all a rare trifecta of skills and orientation, that we just knew we had to back.

Gaurav and Sumit symbolize the new wave of fearless domestic B2B entrepreneurs we are beginning to see in India, building India-first or even India-only ventures – Udaan, RazorPay, Instamojo, Ninjacart, Khatabook and so on. Unlike the first wave of the B2B entrepreneurs who saw India as a springboard to the West (Zoho, Freshworks, GreyOrange, DataWeave etc), this new breed is seeing a large opportunity in the Indian B2B marketplace – thanks to advances in technology (smartphone, cheap bandwidth) and formalization (Aadhar, GST).

We are excited to back the future of agricommodity procurement. We are excited to back Gaurav, Sumit and the Procol team.