A2ZGodaam – An aggregator business model to locate agri-warehouses

Omnivore and Lightstone Aspada backed post-harvest agri-tech startup Arya Collateral has launched A2ZGodaam, a one-stop comprehensive digital platform for search, discovery, and fulfillment of warehousing for farmers, FPOs, Corporates and other stakeholders like traders and small aggregators. Launched on Independence Day, the platform aims to empower farmers and their organizations to gain freedom from the tedious activity of accessing warehouses, finance, and other post-harvest services. For corporates and other private players, the tech-enabled platform facilitates an end-to-end process for warehousing of agri-commodities.

Technology-enabled back-end ecosystem

This simple, integrated, and easy-to-use platform, according to the company, helps users choose ancillary services like warehouse management, finance, transportation, labor, quality testing, and commodity preservation services, through a robust technology-enabled back-end ecosystem. It also enables users to sell their stored produce on the platform by accessing multiple buyers across the country with complete assurance on quality.

A2ZGodaam envisages democratizing available agricultural storage infrastructure in the country through imparting discovery and transparency. It claims to offer savings for all stakeholders by cost optimization in various services such as warehouse management services, financing solutions, quality assayers, insurance, and logistics through economies of scale. These savings will get passed down to users resulting in income appreciation for them.

Anand Chandra, executive director at Arya, shared, “This Independence Day, we are helping the backbone of our society to gain independence from the rigid and complex system of post-harvest storage services. The inclusion of technology into the system is very crucial. Warehousing and storage of commodities cannot be a standalone offering. Apart from democratizing the available agri storage infrastructure in the country, a unique proposition offered by A2ZGodaam is the integration of the platform with other ancillary services along with financial and market linkages. The service will help all users for a seamless experience regarding warehousing and other post-harvest services.”

According to reports, India has about 143 million tons of constructed warehousing capacity. Studies suggest that as a country, India has a storage gap of over 35%. This is further acute if we consider requirements versus availability in primary agriculture centers closer to the farm gate. On the other hand, it is also ironic that despite the shortage mentioned above, large warehousing spaces remain unutilized. The platform is an online aggregation solution for agri-warehouses and other post-harvest solutions to address the needs of farmers, FPOs, and other value chain stakeholders. The platform aims to organize the traditionally unorganized warehousing sector.

A2ZGodaam is a digital extension of Arya’s current business model and has been tested across many customers. It currently has more than 2000 warehouses listed with an aggregated area of about 30 million sqft. These warehouses store over 2.5 million tons of agri-commodities and have enabled Rs 2000 crore finance from various Banks and Aryadhan Financial Solutions, Arya’s NBFC subsidiary. The platform is expected to facilitate the discovery of over 20000 agri-warehouses in the country and enable finance over Rs 15,000 crore.

Warehouse & post-harvest services at the click of a button

The platform supplements the government’s objective of helping farmers and FPOs to access warehouses and other post-harvest services at the click of a button. It also allows farmers to access newer buyers for their produce in line with the recent relaxations in the APMC Act. The platform is also in line with the government’s recently approved near farm Agri-Infra fund, which will help address the infrastructure problems in the agricultural sector. According to the company, it gains immense relevance in the post-Covid neo normal.

In March 2020, Omnivore and Lightstone Aspada participated in a pre-series B funding round of US $ 6 million (approximately Rs 45 crore) in Arya to support its Agritech and Fintech offerings. The company is now raising the additional US $ 15 million (approximately Rs 112.25 crore) to strengthen and scale these initiatives.

Arya was incorporated in 1982. In 2002 it forayed into agribusiness with a core business of warehousing and collateral management and is now present across 20 states of India. The company is a significant player in the post-harvest agriculture ecosystem. It is a prominent service provider to agriculture corporations and the FPO ecosystem catering to their warehousing and post-harvest needs. Arya manages 2.7 million tons of commodities through its network of 1,500 warehouses with an AUM of Rs 55 billion. It also has a 100% owned NBFC, Aryadhan, with a strong client base covering farmer, FPOs, processors, and corporates and completed loan disbursements over Rs 220 crore and has already turned profitable. Arya has raised US $ 9 million funding by strong investors in the Agri-tech space, including LGT Lightstone Aspada and Omnivore.