Aqua Connect - Bringing Market Access to Indian Aqua-Farmers
This April HATCH kicked-off its first cohort and welcomed eight aquaculture startups to Marineholmen for a three-month accelerator program. One of these startups is Aqua Connect, a company supplying market access to shrimp farmers in India, which has become the largest shrimp farming country in the world. In his interview with HATCH, Rajamanohar, Co-Founder of Aqua Connect, talks about how they plan to bridge the problem of market access that is prevalent in the fast-growing Indian shrimp industry, as well as telling the story on how a simple train ride can end up as a life changing moment.
Rajamanohar is an experienced technology entrepreneur, having started and developed two successful ventures in telecommunication and software development over the past decade. World Economic Forum has recognized Raja as a “Young Global Leader in 2012” in recognition of the leadership and contribution in the field of mobile communication and information services. He became a ‘TED Fellow’ in 2009 for his accomplishments in ‘Mobile4Good’ initiatives in emerging markets. Today Rajamanohar focuses his attention towards the Indian shrimp industry. He is determined that his current venture will not only have a significant impact on the Indian Shrimp farming landscape, but it will also improve the lives of many small Indian shrimp farmers.
About Aqua Connect
Aqua Connect is a company trying to solve a big challenge in the Indian shrimp industry, namely the market access. The majority of small farmers have limited access to information and capital, and by reaching out to them Aqua Connect aims to help bridge the problem of access. It aims also to increase the value of the shrimp they are already producing. The startup company was established in April 2017 and is based in the metropolitan city of Chennai in the southern India. There are four talented co-founders; Sanjai – an experienced shrimp farmer, Shanmugam and Karthi – bankers creating new financial instruments and running the operations, and Rajamanohar– handling strategic matters.
How did you come up with this idea?
It all happened over a train journey to my hometown when I got curious about a passenger sitting next to me. He seemed to be constantly on the phone for about half of the 10-hour long train ride, discussing prices, deals, and giving advice to numerous. Eventually, after a lull in calls we started talking and it turned out that Sanjai was a producer of farmed shrimp in India. Until that moment I was not aware of the existence of this industry in India, always having always believed that shrimp comes from the ocean. We got along incredibly well and Sanjai shared with me many of the problems that existed in the industry and brought me to his farm the following day. I learned a lot about the shrimp-farming industry over those next few days and realized that there was enormous potential in its future growth. India’s seafood export market is worth about 6 bn $, yet it doesn’t have market place where farmers could directly connect with other eco-system players. We came up with the idea of Aqua Connect – an Omnichannel market place for Indian Aquafarmers that provides access to Hatcheries, Input providers and Exporters.
How is your funding?
As in the case of the majority of startups we are bootstrapping - starting our venture with our own personal resources and relying on operating revenues to run our company. Our current revenues are steady and obviously peak with the seasonal variation of shrimp farming. We were successful in our application to join the Hatch program which provided an expanded network and much needed seed funding to assist our growth strategy. We have aggressive expansion and growth plans which will require angel / institutional investment to facilitate and achieve our goals.
Have you already entered the market?
Yes, absolutely. We currently provide market information to about 600 farmers and have almost 300 paying customers. Our main customers are the hatcheries, seed companies and exporters, while the farmers are our end users.
“We are already operating in the two largest seafood markets in India, which together contribute to around 80% of India's seafood export business. Aqua Connect have conducted over 100 deals thus far.”
How does your technology work?
At Aqua Connect, we value both technology and low-tech human-centred communication interventions to reach out to the farmers to educate and empower them. We learnt from the competitor's mistake that providing app-based/web based solutions alone might not cater to the farmers at the bottom of the pyramid. We follow omnichannel communication medium through a toll-free number in Telugu, Tamil, Hindi and English for the farmers in coastal districts of Andhra, Tamilnadu, Orissa and West Bengal. With a single missed call, the farmers in the stretch from Kakinada to Ramnathapuram can know the market price. Aqua connect provides low-tech and vernacular communication intervention which forgoes the technological and linguistic barriers.
We provide both a text messages service and voice calls in addition to smartphone applications. Most of the time however farmers prefer to just pick up the phone and call us, asking about the price and availability of larvae, so we keep our technology very simple to meet our market need. Apart from the communication technology we are also working on a algorithm to do the matchmaking between the farmers and other stakeholders in the ecosystem, as well as developing an application using Geo-Location analytics to support hatcheries and exporters in meeting their demands at all time. The Geo-Location application option is estimated to be completed in the coming months and will offer enhanced service and benefits to our users. Our Crowd sourced rating system helps the farmers in the discovery of quality hatcheries. The rating helps in maintaining a better informed and interconnected ecosystem.
What are your products?
“If you are a shrimp-farmer Aqua Connect is essentially a one-stop-shop, providing free information about market prices and quality, as well as supplying our products and services at a reasonable price.”
On average, farmers have to travel around 300 kilometers to visit hatcheries to find quality seeds, a trip that can take up to two days. As an alternative to travelling themselves, we provide free information over a call or WhatsApp-video, using our database to find the best suppliers in their particular region of interest. We then visit the hatcheries and take video of the larvae they are seeking so they can assess the quality. When it comes to sales we provide products like feed and water treatment chemicals, which provide at an affordable and market-competitive price. Small farmers are not going to get the margin we can offer by buying products from small aqua-shops in their local areas. The margin we obtain by buying thousands of tons of feed from feed-producers can thus be passed on to the farmers to enable them to increase earnings and reduce costs.
Can you explain in what way an omni channel marketplace will benefit aqua-farmers?
It’s not always so easy to communicate with our customers. In terms of technology, for example, in order for an app to work one needs access to the Internet. You also need to be able to access Google Store or the App Store and the application needs to have real everyday meaning and benefit for the customer. However at least one third of India’s population does not use smartphone technology so we needed to adapt our strategy to cater for the needs of our market. Our approach was to reach out to our customers with the simplest of communication tools - text messages in the local language, voice call in the local language, or even sending postcards. That is what we call a omni-channel approach - enabling all communication preferences in order that we reach educate and service our farmers to enable them to farm sustainably and with increased efficiency and profit.
Do you think your technology is disrupting the aquaculture industry?
Yes, Technology has been a great differentiator in developed countries. In places like India, and other countries in South East Asia, it might take a while for farmers to adopt scientific sustainable farming. At Aqua Connect, we are doing what we can do best focus on human intervention and how technology can ease communication and help the people on the ground and make their farming practices sustainable
What is the size of Aqua Connect’s market?
The total available aquaculture market in India is worth around $6Billion. India has been the largest shrimp exporter in the world for the past two consecutive years and growing in double digits, so the market is huge.
What do you consider as the main challenges in the Indian shrimp industry today?
There are tremendous challenges with education being a key one in terms of how to farm sustainably. Empowering farmers and teaching them to understand the science behind aqua-farming and how to increase crop yields whilst also limiting the effect on the environment is a major goal that needs to be achieved. Aqua-farming is so important in order to produce the world’s protein needs for the future, but it is highly important too to consider the environmental impact of the industry. To make the industry sustainable the farmers must learn and adopt scientific farming methods and water treatment technologies. A further challenge is related to the limited capital available to many shrimp farmers. Since farmers have very low margin on their product, they cannot earn enough from what they produce currently. In order for the shrimp farmers to be sustainable there needs to be significant innovation in the product category to increase the margin on the shrimp products. Also, there is a challenge related to the anti-dumping from the US. The anti-dumping duty used to be 0.82% and now they are raised to 2.3%, resulting in the exporters having to pay more and consequently squeeze the producers’ margins. Hopefully this will be a short-term problem.
What do you see as the benefits and risks of starting up a company in the aquaculture industry compared to other industries?
I come from a high-tech telecommunication- and software industry, with a much higher value and premium compared to the shrimp industry. However, the aquaculture industry has significant future growth potential with a growing global population and increased demands for protein. Sustainable production is a key requirement and for Aqua Connect assisting the development of the shrimp farmers is an aspect that motivates me the most in terms of gaining more value for their product. In India the middle-men and traders get most of the benefit, which is a trend that needs addressed and changed.
Do you see yourself working together with other startups in the cohort?
Absolutely, there is a lot of collaborative opportunities! It is an incredible cohort, where we can help each other get access to each other’s markets, as well as share valuable experiences.
“There is a huge potential in being part of a cohort focused only on aquaculture. No other accelerator can provide you with this kind of concentrated aquaculture focus.”
Do you see yourself working together with Norwegian-based aquaculture companies outside of the cohort?
Of course, I would love to! Cooperation is definitely a bit challenging considering we work on warm-water species, and they mainly work on cold-water species, but I still believe there are huge opportunities for collaboration. Even though the species are different, the same technologies can be applied, and the business processes remain the same.
What is it like to be a part of the HATCH Accelerator startup program?
It is a fantastic experience being here in Bergen, which is developing in to becoming the aquaculture capital of the world. Many of the world’s leading feed, seafood and aquaculture focused companies are literally within walking distance of our office
“It’s great to be here and there is an amazing network to access. There is also a lot to learn and HATCH is providing just that. These guys are fantastic. It’s just amazing to work with the HATCH team!”
Would you recommend other aquaculture startups to apply to the next cohorts?
Yes, do it! I strongly recommend it. It’s one of the best opportunities for aquaculture startups in the world to be part of and networking with fellow aquaculture startups and learning from the best.
And finally, what do you have to achieve in order to become a Billion Dollar Company?
To be honest, it’s not the money that inspires me when I start a business. So, I really don’t know what would make Aqua Connect a Billion Dollar company. However, if truly focusing and understanding the needs of our customers helps us achieve millions of end users. That is something that I am really hoping for! We want to reach out to as many people as we can and if changing the lives of millions makes Aqua Connect a Unicorn….we’ll take that too!!