High-growth lessons from agritech start-up founder
Srinadh Kotturu, Co-founder and Chief Operating Officer at Kwikbasket Solutions, a digital marketplace connecting farmers and producers to commercial kitchens. FILE PHOTO | POOL
If there are two lessons that Srinadh Kotturu, the former general manager at Techno Brain, one of the largest IT solutions companies in Africa, has learned as an entrepreneur are fear and hiring right.
Mr Kotturu, who co-founded Kwikbasket Solutions, a digital marketplace connecting farmers and producers to commercial kitchens, says when setting up a high-growth enterprise, the most critical thing to focus on is the team.
“If you have the right people, they will make things happen. You may have the best technology, best business plan, unlimited financial resources but if you don’t have the right people, enterprises don’t take off,” he says.
For Kwikbasket, it is the advantage of technology coupled with a great team.
“Each of our team members understands their role and how it affects the whole supply chain, from the sourcing assistant to the driver,” he says.
Mr Kotturu quit formal employment to start Kwikbasket in 2020.
“My previous job for 17 years was more like a 9–5 job, spending a lot of time in the boardrooms, discussing tech, meeting customers, and learning new advancements. It is these learnings that made me launch Kwikbasket,” he says.
He had worked on many digital agriculture projects, which involved digitising over one million farmers across sub-Saharan Africa.
During his work, he realised that most projects were not self-sustaining and died when the funding ran out.
“This made me desire to build something sustainable for the agricultural sector leveraging on technology. After doing some informal surveys on the challenges facing farmers, three key issues emerged,” he says.
There was access to information, finance, and markets. Mr Kotturu and his partner selected access to markets as the first problem to solve using technology.
“Market access is a common denominator whether in horticulture or cereals. A farmer is always far from the market because they lack insights into what the market needs today and tomorrow,” he says.
When they launched, it was a completely new ball game, he says, as they had to do many things at the same time; acquire customers, assemble a team, acquire farmers, build the tech itself, keep the investor confidence high, on-board strategic partnerships, among others.
“I had to unlearn and relearn a few basics because the dynamics of being part of a pure technology company to building an agritech startup are completely different,” she says.
At Kwikbasket, they pick the produce from the farmers, bring it to the warehouse, grade, sort, pack and deliver it to commercial kitchens that place their orders via the Kwikbasket platform.
The first three to six months after the business started, they would knock on doors to make customer inquiries.
But now Kwikbasket works with over 5,000 farmers, handling 400 tonnes of fresh produce monthly, and servicing 1,200 commercial kitchens registered on the platform.
“Our biggest asset is technology. Kwikbasket has grown exponentially on average of 10–15 percent month-on-month, still has a lot of potential,” he says.
“The total market size of registered kitchens in Kenya is approximately 100,000 kitchens and the potential is huge. What we need is more financial resources to scale the business,” he adds.
Funding
For start-ups more so agritech, Mr Kotturu says that many factors come into play when it comes to funding.
“It is true that the technology sector in Kenya has been growing rapidly in recent years and has attracted a lot of attention from investors. I look at it differently. Every business has its mission and objectives and at the end of the day, it has to make a profit.”
He adds that many other factors can affect a start-up's ability to secure funding, for instance, the quality of the team, the strength of the business plan, market opportunity, and the competitive landscape and that ultimately, the best way to increase the chances of securing funding is to have a strong business plan, talented team, and a compelling vision for your business.
And with that in place, they were able to secure funding from Techno Brain and ETG.
Coping with challenges
Mr Kotturu says one challenge has been accessing credit.
“The market we serve is used for supplier financing which is not the best way of financing a business. Our potential customers mistake supplier credit for free finance because the suppliers will embed the cost of finance into their pricing which is much higher than any other way of financing the business and most business owners don’t realise this. It costs them more than formal financing,” he says.
Another challenge is trust. He says, at first, it was not easy for them to go to the farms and buy produce but they continued showing up and farmers started believing in them and understood their model.
There is also the lingering headache of competitors entering their turf.
Fresh produce constitutes only seven percent of the cost incurred by commercial kitchens with the balance constituting dairy products and dry goods.
“Our competition comes in two ways – suppliers strong in dry goods and other products who are also trying to venture into fruit and vegetables. In the last two and half years, we have seen competitors coming into the fresh produce space but they soon realise that the fresh produce supply chain is 10 times more difficult than logistics for other packaged goods,” Mr Kotturu says.
The other competition he says comes from individuals who take direct orders from the commercial kitchens and go to the market for produce and supplies.
Over the years, they have hired over 100 workers. On growth, they plan to onboard manufacturers.
“We are going to onboard one or two manufacturers like dairy and beverage companies. We want to focus on fresh produce and increase the impact on the farmers but if we don’t provide full baskets then we are not solving the food problem for our customers. We will go slow but steady expansion on that side,” he says.
Regional expansion
They also plan to open another unit in Mombasa and expand to Uganda, Tanzania, and Burundi.
“For fresh produce, we might also get into value addition - frozen vegetables. We are looking for investors who bring value to the table besides money who might help us expand into other countries, and acquire customers quickly.”
Another thing Mr Kotturu says he has learned as an entrepreneur is that fear is like a superpower. It keeps you alert and aware. But at the same time, it should not stop you from trying to achieve what you set out.
“I try not to get carried away when things are going well or when they’re not going so well. We have encountered more difficulties than we should have as a company. We heavily use the lean start-up methodology,” he says.
The lean startup methodology is a framework for developing businesses and products based on the principles of continuous improvement and customer feedback.
It emphasises rapid experimentation and iteration to build products and services that better meet customer needs and increase the chances of success in the market.
