After several years in the US, in December 2020, Saurabh Agarwal’s homecoming to India was thrilling in more ways than one. Amid a raging global pandemic and multiple lockdowns, as he boarded the ‘Vande Mataram’ flight to India with his young family and an infant daughter, Saurabh knew the roller coaster ride had only just begun.
Back home, Mayank Tiwari, a NIFT graduate and the brain behind silk agritech startup ReshaMandi, who also happened to be Saurabh’s childhood friend, knew the latter’s technical background would be paramount to the impact they were hoping to create through their entrepreneurial venture.
Shortlisted as YourStory’s Tech50 2021 list of India’s 50 most promising early stage tech startups for 2021, ReshaMandi is a silk agritech startup that links farmers with consumers. It is a business-to-business (B2B) marketplace that uses Artificial Intelligence (AI) and Internet of Things (IoT)-led digital ecosystems to digitise India’s silk supply chain.
At one of the reeling units
For its founders, who had their research and technical expertise pat down before they began ReshaMandi, the focus was always grassroots level enablement. Mayank had spent two months with silk farmers from different clusters across India, understanding crop and supply chain issues. Saurabh, on the other hand, had started ideating on IoT technologies to be deployed to help these farmers. Saurabh and Mayank also roped in Mayank’s former colleague and product expert Utkarsh Apoorv as the third co-founder.
The beginning
“Mayank had a background in textiles and handicrafts and all the grassroot level connections. He always felt that when compared with cotton, the silk industry had not seen as many interventions and initiatives. So we connected in February 2020 to discuss ideas; in May 2020, we registered the company. By June, we created an app for silk farmers to connect with us, started trading and operations, and opened a small Mandi in Sarjapur, Bangalore,” recalls Saurabh.
“Through our interventions, we were seeing the initial signs of increase in produce as well its quality. Our IoT devices were deployed on mulberry farms, which is a monoculture crop. The devices monitor temperature, humidity, light and air quality in the sheds and in the rooms where cocoons are reared. All these made a huge difference to the crop yield.”
ReshaMandi’s platform also ensures farmers are supplied with the best raw materials and testing kits. Farmers can sell their produce directly to ReshaMandi and the startup ensures they get the best price in the market. The company also enables the logistics aspect of the supply chain and reduces the burden on the farmer, helping with trust-building in the process.
Sustaining that trust
When asked if earning the trust of the farmers was easy, Saurabh has an interesting response. “Earning their trust is easy, maintaining it is where the challenge lies.”
“Farmers will give their produce when you talk sense to them and make them see your vision. They will get onboarded quickly. But keeping those promises to them is the essence of it; that’s where retention and scale will come into the picture. If you don’t show up again next month, and you keep them hanging, it will be a major blow. And farmer communities are very strongly knit,” adds Saurabh.
Clearly, maintaining trust has not been an issue for ReshaMandi. The startup now runs 20 to 25 Mandis (big markets) across Karnataka, Tamil Nadu, Andhra Pradesh, and Maharashtra. They are also present in four weaving clusters in some of India’s silk capitals – Varanasi, Dharmavaram, Salem, and Kanchipuram, with offices in all four regions.
“A team of 5 to 10 people are always there in the cluster, and we hire them locally from that cluster to overcome language and cultural barriers. It’s great to see opportunities being created that way,” says Saurabh.
Building a new silk route
In his previous role, Saurabh was heading a tech team at Cisco and working with a different demographic. From doing that to forging partnerships with silk farmers, weavers and clusters, the journey has been nothing short of invigorating for Saurabh and his co-founders.
Today, ReshaMandi — which recently announced a Series A funding round of $30 million, led by global alternative investment manager Creation Investments — is clocking over Rs 20 crore in annual revenue and works with over 30,000 clients across more than 20 cities.
In just over a year, how did ReshaMandi get here? Saurabh has interesting story to share.
“When we went to the Banaras (Varanasi) cluster the first time, we were carrying yarns from Ramnagaram (Ramanagara) with us – Indian yarns. We were there to meet Banarasi weavers who had been in the industry for 50-60 years, the established ones. We showed them our produce and one of the weavers picked up our yarn, examined it for a long while, and said, ‘You’re selling Chinese yarn, this is good.’ We were taken aback but asked them what kind of price they would be willing to pay for this quality, and they replied, “Rs 5000 – 5500 per yarn,” recounts Saurabh.
“We literally jumped out of our chairs, then explained this was Indian yarn, made in Ramnagaram, costing about Rs 3800. The weavers were shocked, but we immediately started getting purchase orders and bookings for yarns for the next six months. Breaking through in the Banarasi market gave us a huge high, and we knew we could make it.”
Revenue model, marketplace and more
ReshaMandi’s revenue model looks straightforward enough. It’s a managed marketplace, with the startup making a margin out of all the inputs they sell.
“Any yarns we procure, we repackage it, test it, and all the other services we provide, we make a margin on it. Even with saris, we give design inputs to weavers, help them with capital as well, and make a margin out of it too.”
More recently, the startup has rolled out ReshaMudra to help all the stakeholders with working capital. “On that, we’ll be making nominal interest revenue,” says Saurabh.
But now that the startup has been successful in gaining farmer trust, digitising the sericulture supply chain and establishing successful partnership, what lies ahead?
“Two things we are focusing on: organically, we are doing a lot of experimentation around sustainability. There’s a lot of wastage in the supply chain where dead pupa can be used in fisheries and poultry food and other things. Then there’s also ReshaMudra, where we are helping farmers with loans as well. So, we are building the fintech arm of ReshaMandi, whilst also focusing on geographical expansion, besides some M&A (merger and acquisition) opportunities,” signs off Saurabh.
