This is one of the Agritech Startup Idea from the 1001 Startup Ideas collection of YoStartups. This business idea is about creating Drone based Hyperspectral Imaging For Agriculture Marketplace, that would rate quality of the listed produce using Hyperspectral Imaging. The startup would deploy a fleet of drones fitted with a hyperspectral imaging system to create 3D images of fruits and vegetables before they are totally ready to be harvested. A quality rating would be given based on these images and the produce would be listed on a marketplace. The startup aims to advance the sale of agricultural produce even before they are harvested, and thus reduce the wastage and increase farmer’s earning.
Market Definition for Drone based Hyperspectral Imaging For Agriculture Marketplace
According to the World Bank, if the global population continues to rise at its current pace, we will need to produce 50% more food by 2050. But as per Food and Agriculture Organization of the United Nations (FAO), each year, 33% of all food produced for human consumption in the world is wasted. This translates to around 1.3 billion tons of lost produce and production of this wasted food utilises around 1.4 billion hectares of land.
In India, wastage of fruits and vegetables contribute to 40% of the total food wastage before it reaches the consumer. Improper supply chain and lack of basic facility to store the produce is the main reason for the wastage. While investing in cold storage facility is important, a robust and efficient supply chain can ensure on time transfer of the produce from the seller to the consumer and therefore reduce the burden on cold storages.
Competitor Analysis for Drone based Hyperspectral Imaging For Agriculture Marketplace
Mandi Trades App is a farm-to-shop platform that helps farmers market their produce in a timely manner. The app provides price alerts, agricultural news, government mandi prices with information available in local languages. The app connects farmers to retailers and facilitates price discovery through discussion.
Crofarm is farm-to-business company that connects farmers to retailers. It operates on a commission basis. The company procures products that have a longer shelf life from national sourcing zones and other products from regional sourcing zones.
Ninjacart aims to eliminate the losses in farm produce by improving the logistics and market information. It cuts out middlemen by connecting farmers and retailers and restaurant owners etc, and is focussed on building a cost-efficient, reliable and scalable supply chain.
Pain Point and Target Audience for Drone based Hyperspectral Imaging For Agriculture Marketplace
The target customers for this business are both farmers and retailers/ restaurant owners/ food processors.
Farmers acknowledge that selling their produce is the most difficult and uncertain part of the business. Lack of organised marketplace, the upper hand of middlemen and long distance transportation leads to both lower earnings and wastage of produce. As a result, farmers are uncertain when to harvest the produce. Farm produce is therefore harvested early and chemicals/ wax are used to preserve the produce till it is sold to the end user.
Retailers and restaurant owners are always in the search of the best produce for their stores, but encounter inconsistencies both in quantity and quality of the supply.
Value Proposition for Drone based Hyperspectral Imaging For Agriculture Marketplace
The value proposition is to deploy a fleet of drones with Hyperspectral imaging system mounted, which would scan and image the produces at the farm, much before the fruit/ vegetable is ready for harvest. Based on the image a quality score would be assigned to the produce. The produce would be then listed on an online marketplace, highlighting the quality score and the optimal time remaining for harvest. Retailers/ Restaurant owners/ Food Processors can then pre-purchase the produce even before harvest. As the imaging system improves with self-learning, it will determine more accurately the exact day when the produce can be harvested.
The company can then provide a logistics support for transporting the harvest directly from the farm to the buyer on the day of the harvest. That way there is less burden on the storage infrastructure.
Business Model for Drone based Hyperspectral Imaging For Agriculture Marketplace
The company should initially tie up with a few big retailers. The drones are deployed to agricultural areas which typically form the supply chain for these retailers. The retailer are charged a commission based on the produce purchased on the marketplace and the corresponding logistics cost. A monthly fee is charged to the farmer to avail the imaging and listing service.
Way to market For This AgriTech startup Idea
The startup should focus at first on certain types of vegetables and fruits, especially those that perish very fast. It can then expand to other produce as well. Any city that has a high demand for fresh produce and has agricultural lands not very far from the city, can be a good starting point. The company should tie up with big retailers in such cities and aim to reduce their sourcing costs.
At some point in time, the company must explore the concept of direct farm-to-kitchen supply for the retail consumers.
Milestones For This AgriTech startup Idea
The startup should focus on developing the drone system and the imaging accuracy, conduct trials and then launch a basic version. By the end of a year, the startup should target to expand to major retailers in major cities in a country.
Investment Needed for Prototyping Drone based Hyperspectral Imaging For Agriculture Marketplace
The initial major costs are development and testing costs, equipment cost and marketplace development cost. The startup should target to raise around $200-250 thousand from angel investors and incubators, for developing and testing the concept. Angel investors or incubators such as Robolabs, T-Hub, Thrive Agtech, AgFunder, Terra provide both the seed money and domain-specific guidance.
Team Capability For This AgriTech startup Idea
The core team would be comprise of AI and IoT engineers, and agriculture scientists as domain experts. It would be good to have agriculture engineers/crop scientists with strong coding and analytical background, in the team.
Investors/ Expert Take on Startup for Drone based Hyperspectral Imaging For Agriculture Marketplace
The above idea makes agriculture supply chain more efficient and helps reduce wastage.
As per McKinsey, if technology is not implemented in the agricultural sector, by 2030 apart from unmet food demand, 40% of the water demand is unlikely to be met. Due to this need, investors are on the lookout for technology innovation in every segment in the agriculture industry. McKinsey also noted that agricultural companies have demonstrated higher returns to the shareholders than startups in many other sectors. Apart from technology development, the regulations around drone usage has started to change to increase its commercial usage in many sectors. It is therefore the right time to implement such advancements for the judicious use of natural resources. Here is the list of Top Agritech Startups of 2018, as per reserach from Yostartups.
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