E-procurement platform Agriconomie is bringing much-needed transparency to Europe’s market for farming supplies – saving farmers time and money. First stop: France, Europe’s largest agricultural producer, where the market is worth €33 billion.
“We go home to our farms every weekend,” says Paolin Pascot, CEO of Agriconomie. The online shopping platform is based out of Paris, but the start-up’s co-founders all come from farming families. They know like few others the challenges farmers face. “Growing up, I noticed my parents and relatives spent a lot of time ordering all the things they needed for our farm from the cooperative.
A transparent platform
Nearly all purchasing by French farmers is still done through traditional agricultural input distributors, which can be a slow and pricey process with limited product choice. While still at business school, Pascot and some classmates came up with the idea of offering an alternative: a B2B platform with all the products a farmer might need – from seeds to spare parts for their machinery – bypassing inefficient middlemen. “Some ag input distributors are doing a great job, but others take advantage of their regional monopoly.”
The founders had the old system in mind when they launched their business in 2014. Pascot: “What we do is very simple: help farmers save time and money. We are a transparent platform where they can see prices up front, buy whatever they want and have it delivered fast.”
“What we do is simple: help farmers save time and money”- Paolin Pascot, Agriconomie
The face-to-face challenge
Appealing as the idea of an ag-Amazon might sound, farmers are a notoriously conservative bunch. Pascot and his colleagues realized the first challenge was to design algorithms to encourage them to buy their supplies in this new way.
Agriconomie has built trust by carefully vetting suppliers and focusing on logistics. While over half of the platform’s products are shipped directly to the customer by third party suppliers, it has recently decided to stock some products, including seeds and chemicals, to guarantee fast delivery. “If a farmer orders these and they take two days to get there, it can be a huge problem.”
When the company surveyed farmers, half said they preferred ordering through their cooperative because of the face-to-face contact. While it has very few agents in the field, Agriconomie has experts in agronomy and farming on hand daily for customers wanting to talk to a human being.
E-procurement meets data
The approach is working well: the platform has 20,000 customers and is now racking up 1,000 new ones per month.
But there is more to the project than the shopping platform. Its nascent services and data components are more promising in terms of profitability. Pascot: “We have to create value for our farmers because they are our customers. But we also want to create a powerful, efficient tech platform that will allow us to scale across Europe.”
“We want the whole chain to be more efficient”- Paolin Pascot, Agriconomie
To that end, the company is building an anonymized customer database. By June 2018, it had gathered 4.2 billion items of qualitative data. The data is also used to create farming insights and set benchmarks for farmers who join a subscription-only club.
Interestingly, the start-up is not keeping the information to itself. It encourages other players along the supply chain, such as cooperatives, input manufacturers and traders, to use it to improve their sales strategies. “We want the whole chain to be more efficient.”
The start-up has attracted over €12 million from backers including agrifood venture capital fund Anterra Capital. Adam Anders, Anterra Managing Partner: “The current value chain is inefficient with most of the pain felt by the farmer. We invested in Agriconomie because it makes farmers profitable again and allows them to literally spend more time in the field.”
Pascot is excited about the partnership. “Anterra has very smart people who are helping to improve our company,” he says. “They are committed to farmers, the market and the company, and they are very hands-on. Just last week they helped me find better suppliers and discussed how to make better decisions about digital acquisition.”
Agriconomie currently operates in Belgium and France, where it estimates online purchasing still accounts for less than 0.5 percent of the €33 billion market. But it has only just started. “By 2023 we want to be the European leader in e-procurement for farmers.”