Framework for Smallholder Agritech
Smallholder farmers in Asia supply the bulk of the region’s food.
Government, NGOs, business leaders and Grow Asia see great promise in digital tools to make smallholder value chains more efficient and profitable for farmers. However, hope is not enough - new technologies can only scale when they are delivered within a functioning business model.
Finding a business model which works on small farms is a tough job. To work, the model must:
provide greater value to the farmer (or other customer) than it costs to deliver;
convert this value to payment by the customer; and the cost of adding (acquiring) each new customer must be less than their lifetime value to the business.
Business models are typically discovered rather than designed. Successful startups typically use a lean methodology to continuously test and improve their business model, and discover market fit.
Grow Asia have run several hackathon, accelerator and pitch events in support of smallholder digital tools. Observing the full range of solutions that have been developed across the ASEAN region, we see startups migrating to several promising poles; five business models which seem to show the greatest potential.
These criteria are particularly difficult to meet on small, remote farms.
Delivery and acquisition costs are typically high, and lifetime values low.
Despite these challenges, we are seeing five promising business models
emerge in ASEAN.The five models are:
Multiple Data Consumers
Access to pre qualified customers
Farmers and Lenders
Attractive loan terms
Farmers and Consumers
Reduced transaction cost
Across five business model guides, we are going to describe each model, and assess its potential and challenges in reaching scale. We have also had an investor and a founder respond with their own insights on each model.