Ergos: Warehousing at Farm-gate and more!
Let’s deposit some Grain in the Bank
Founded by Kishor Jha and Praveen Kumar, Ergos is an agri-tech start-up that is building a technology-backed GrainBank for small and marginal farmers in India. The unique technology platform enables farmers to digitize their food grain and provides them with doorstep access to end-to-end post-harvest supply chain solutions. The Ergos platform operates like a bank and offers Storage, Digitisation, Credit and Liquidation facility to farmers and has consistently helped them achieve significantly higher incomes for their produce.
Ergos GrainBank enables farmers to convert their grains into tradable digital assets, avail credit against those assets through partner NBFCs and banks, and get better prices for their produce. The platform empowers farmers by providing them with a choice on when, how much quantity and at what price they want to sell their produce, thus maximising their income.
The Problem: Challenges faced by Farmers
Most of India’s institutional agricultural warehousing, credit and market linkage services are available close to ‘mandis’ (agricultural markets) located away from farmgate, and cater to larger farmers.
However, the Indian agriculture space is dominated by small and marginal farmers (~100 million marginal farmers) who produce less than INR 100,000 worth of grain annually, and find it difficult to utilise institutional services due to cost, logistics and access. As a result, they are either exploited by traders and money-lenders or suffer massive loss of produce due to poor storage facilities.
Irrespective of their location, farmers need immediate liquidity to cater to their expenses and credit repayments as well as proper storage facilities to prevent the loss of their produce.
How Ergos is Solving it through the GrainBank Model
Network of Warehouses:
Scientifically managed warehouses at farmgate where farmers can store even a single bag of grains.
Credit Availability:
Credit available from partner banks/NBFCs against grains stored with Ergos.
Market Linkage:
Empowering farmers with a choice to sell a single bag of grain. Ergos aggregates the supply, and offers farmers market linkage to sell their stored grains.
Digital backbone:
Ergos’s on-ground operations are backed by a comprehensive technology platform which assists the end-to-end process and operations, starting from farmer on-boarding to the final sale, with each step assisted by a dedicated Relationship Manager.
The end-to-end process of capturing farmers’ data, booking warehousing space, selling grain or availing credit happens digitally on the Ergos Live platform. Farmers can easily access their digital inventory, check the current offer price and transact with just one click or a call.
How it works:
Farmers can book warehousing space in advance and approach the GrainBank closest to the farm. Their produce is inspected for quality and they receive a warehouse receipt specifying details such as weight, grade etc. Ergos accepts a single quality of grain, i.e. all stored grain is of uniform quality making them fungible. The fungible nature of stored grain allows Ergos to aggregate supply and deliver the best possible price for the farmers. Moreover, the farmer is free to avail credit against his/her produce, or withdraw any number of bags at will, at any time.
Business matters: sustain to scale
Ergos’ revenue comes from storage service fees, facilitating sales to end-buyers, and fee income from its financial institution partners.
Investors and Partners
Ergos has raised $17mn equity investment till date and $5 million in debt (off balance sheet and on-book) from multiple NBFCs and banks. Investors who have supported the journey include Aavishkaar, Chiratae Ventures, and CDC Group Plc. Financial institution partners extending credit to marginal farmers are Samunnati, Ananya Finance, Grameen Impact, Intellecap, IDBI, and SBI.
Aavishkaar invested in Ergos when the company was still in its infancy, having just done a small pilot with 4 micro-warehouses in a single district of Bihar. We were fascinated with the Founding team’s vision to empower farmers bydigitising their food grain and thereby helping farmers realise significantly higher incomes. Today the Ergos platform has evolved into a grain bank offering storage, digitisation, credit and liquidation facility to farmers. The Ergos platform has witnessed robust traction and has consistently delivered significantly positive impact outcomes for the farming community. We have invested in Ergos across multiple rounds and continue to be an active partner to the company as it expands its geographic footprint and farmer outreach across India, whilst rapidly scaling impact outcomes. 
- Investor, Aavishkaar Capital
What Kishore, Praveen and the team at Ergos have built out, addresses critical post-harvest needs with an elegant solution that increases smallholder farmer resilience and empowerment. Beyond the value-add to farmers on storage at farm-gate, price-realization & credit facilities, we expect that the long-term relationship with farmers will unlock further benefits and opportunities. We are indeed excited and privileged to welcome Ergos to our portfolio, and look forward to partnering with Ergos in their journey to double farmer income and build India's largest grain bank at the farm gate.
- Investor, Chiratae Ventures
Traction
The company supports more than 42,000 farmers on its digital platform as on December 2020 and has a physical footprint in more than 160 locations across 14 districts of Bihar (the market in Bihar is substantial, with ~10 million farmers and US$ 12 Billion worth of grain - maize, wheat and paddy). The company is evaluating an expansion to 2-3 neighbouring states over the next year. In 2018, Ergos won the “All India Start-up Award” in the “Innovative Model & Excellence in Supply Chain” category, awarded by Indian Council of Food and Agriculture.
The company is poised to expand its geographic footprint and farmer outreach, enhance its tech platform and rapidly scale its operations and impact outcomes of increasing farmers’ income by 35-40% year on year.
For more information, visit www.ergos.in