Deal focus: Aspada backs India’s agri-tech ‘Uber’

EM3 AgriServices hopes to solve part of the problem by offering small-hold farmers on-farm services with modern machinery, on as pay-as-you-go basis. The company covers nearly every step of the process, from soil tilling to harvesting.

"It is basically like an Uber for farmers," says Thomas Hyland, co-founder of Aspada Investment, which has just injected INR200 million ($3.3 million) into the business. "It saves the cost of owning large scale farm equipment that is out of reach for nearly every single farmer in India - it is a sharing economy play."

This is a sweet spot deal for Aspada. The India-based GP - which is backed by the Soros Economic Development Fund - targets financial services, education, healthcare, logistics and agriculture; the last two account for seven of the 13 deals completed to date.

EM3 was set up by Rhotash Mal, who was CEO of Bharti Airtel before heading up tractor and farming equipment supplier Escort from 2007. Mal recalls his frustration that customers - all small hold farmers - were being forced to buy equipment that would be used around 8% of the time.

"I felt that while we were doing well out of the business, but our customers were not. It was unsustainable," Mal tells AVCJ. "So I got to work thinking about ways we could convert that capital expenditure into operational expenditure."

EM3 currently operates in Madhya Pradesh under the brand name Samandhan and runs a network of farm services centers called Samandhan Kendras, each delivering a range of basic and precision agri-operations. Hyland adds that the business not only gives access to technology but also solves a major labor issue.

"India is experiencing a significant urban migration right now where you have millions leaving the countryside, so labor is expensive and farmers can have difficulty finding extra help come the harvest," he says. "Now they can use a productive piece of machinery at the same cost of hiring farmhands."

The extra investment will be used to build the company's team, improve technology, and enhance soil and chemistry research. There are a number of potential end-to-end interventions for EM3 where specialist equipment is needed and the plan is to expand these services to the rest of India.

"You can rotate machinery across India for different seasons and different crops, so it solves that reverse logistics problem," Hyland says." Right now we are primarily concentrated in the North but we do have a relationship with [US agricultural group] John Deere, and hope to continue building out the service."

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• Topics
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• Aspada Investments