Dairy, IoT And Precision Agriculture
Hard for non-agri experts to see the three having anything in common, but they do. Stellapps, an all Indian, end-to-end, B2B dairy technology startup unifies the three. It’s funded by Omnivore Capital of Godrej Agrovet Limited and IIT alumni investors.
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The company leverages cutting edge technologies like Internet of Things (IoT), big data, cloud, mobility, and data analytics to improve the agri-supply chain, including milk production, milk procurement, animal insurance and farmer payments.
Their SmartMoo™ cloud is built to support massive sets of data from “tens of millions of litres of milk….across millions of farmers.” Some of their leading clients are dairy service providers like Hatsun, Lactalis, Heritage and Prabhat.
We speak to a cofounder of Stellapps Technologies, Ranjith Mukundan.
Why focus on agriculture and within that dairy management and preventive healthcare of livestock?
Our aim was to apply this full IoT stack to various verticals but first we believed in adopting a use case driven approach to building our platform, and agri/dairy management happen to be the first use case we picked.
In our first 18 months we did explore other verticals like healthcare, and telematics. We figured that the first thing we explored should be agri as there is a crying need for remote management (monitoring and control) as it is difficult to get local expertise on-premise. Simply put this is where the greatest need for tech disruption was.
What’s precision agriculture that you describe Stellapps as being an enabler of?
Precision agriculture is about using mechanization, electronics (such as sensors) and software to get more per-acre, beyond what is possible with traditional manual farming mechanisms.
This approach enables leveraging of advanced software mechanisms such as machine learning on the gleaned data. Precision agriculture also enables evaluating and influencing the productivity at a very granular level, for example, per cow-level performance management.
You were saying it was surprising that you could monetize data on IoT? Why? Describe how to within dairy management.
Our full stack IoT approach enabled data acquisition across the dairy supply chain. We market our solution for its functional value based on productivity improvement, quality improvement, protocol adherence and cost optimization.
As a by product, however, we realized that the data we were acquiring via sensors and mobile applications in itself can be separately monetized, in partnership with our customers. This was not part of the original plan, but it is monetizable.
For instance, the animal-level data being acquired could be monetized via animal insurance companies, animal genetics companies, animal feed manufacturing/nutrition companies, animal treatment (pharma) companies etc.
Similarly, the farmer milk procurement data being acquired could be monetized via farmer payment partnerships, microfinance credit worthiness assessment mechanisms etc.
You were saying IoT is perfect for a remote sector like agriculture. How so?
By its very nature, the agricultural industry environment is rural and remote. This need is further accentuated in emerging markets - where the landholding and farm sizes are significantly smaller on an average than the developed market farm sizes and hence economics would not lend itself for on-farm computing.
Further, the farm productivity levels, quality of the farm produce and production side supply chain inefficiencies, including farm-to-fork traceability were at abysmal levels vis-a-vis developed markets.
We figured that if we can use sensors in the farms to automatically acquire data and apply analytics and machine learning on the cloud and then use the outcome of the analytics and machine learning we could solve problems as outlined above.
Also, it is important to note that, IoT lends itself to automatic data capture hence it is ideal in low skill manpower areas such as remote, rural areas where one cannot expect people to capture data using offline mechanisms alone such as via an android application or SMS.
Could you tell us how even insurance companies and ewallets are all ready to use data from precision agriculture?
We capture data across the dairy supply chain - farm-side (production), aggregation-side (procurement) and chilling-side (cold chain).
For progressive farmer whose livestock is performing well, insurance companies who are willing to provide Quarterly reducing insurance premiums can use our data. This is analogous in the human world where people assessed to be better drivers have to pay lesser vehicle insurance premium for their cars vis-a-vis rash drivers.
The animal level data is also of interest to feed/fodder companies, animal pharma companies and even animal genetics companies.
Similarly, at the milk procurement centres our IoT device will capture the contributing farmers’ milk quality and the farmer’s pay is sent directly to his ewallet.
All these players in the ecosystem are keen on getting paid electronically as it saves them the cost of recovering the payments in cash mode from the retailers/wholesalers who disburse their wares.
Further, farmers can reap the benefits of cash-backs if they use their ewallet money to buy feed/fodder, veterinary services, medicines, seed, fertilizers, semen straws. Banks are also keen on using this data to assess farmer creditworthiness (among other parameters) when lending microfinancial support.
Tell us how the business has grown so far
We were predominantly in the R&D phase for the first three and half to four years given the intense engineering required to realize the cloud side and electronic side products.
We started selling seriously to the market about 18 months ago, that is somewhere around 2014-end/2015-beginning.
We have grown by 3x since FY 2014-15, 15-16 and plan to continue grow at this pace in the current FY and hopefully the next few FYs.
And we say we are hopeful because we make pretty good margins of over 50% on an average.
And the market size and potential is great here. we have considered the total addressable market (TAM) for precision-agri/dairy IoT to conservatively be about 27 billion dollars of which another sub sector of our area of expertise, animal wearables has a TAM of 2.8 billion dollars.
Ranjith is very honest about the challenges Stellapps has had to face.
There has been many. A few big ones are the inability to attract the best talent, given our start-up look-n-feel vis-a-vis a big corporate look-n-feel, slow speed of movement with government milk federations and unions; quality issues faced in some of the initial electronic components shipments from Chinese manufacturers, issues with customs officials while trying to import components from China for our production, and of course nerve wracking night-outs while trying to fix customer escalations when some of our product features wouldn't work as planned.
But then again, there have been some sweet memories too. There was the time we won our first big order from a tier 1 customer. We are also the only company in all of Asia/BRIC region referenced in a Grant Thornton "Dairy IoT Report". In fact, we are the only company outside of US, Europe, Israel and New Zealand, referenced here.
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