Notes from June 27 call with Ankita Singh (Unlicensed)
Evolved from a high to low capex moel
Focus geographies: MP, Rajasthan, eastern UP
High capex model (run from 2015 to 2018/2019)
bought equipment like laser land leveler (3-4 lakh), harvester (22-25 lakh) (10-15 harvesters in MP)
Setup own brick and mortar centers to book services and provided services themselves
Struggled to get traction bc in each market, there were already local farmers w the same equipment providing similar services. Machines had high maintenance costs and low utilization (~20%)
EM3 financed equipment purchases through loans from Yesbank and in some cases leased equipment from Orix
Low capex model started in Rajasthan in 2018/2019 (still running)
EM3 provides a platform where customers meet the asset owners / service providers (called CHCs) and EM3 monitors and organizes scheduling and service delivery to the farmers
Govt rolled out a 40% subsidy on ag equipment Rajasthan (SMAM scheme) and signed MOU with EM3
Entrepreneur, usually a wealthy farmer, owns equipment and already rents out to ~5 nearby villages (10km radius)
EM3 facilitated the govt subsidy on new equipment purchase; completed paperwork, and ensures entrepreneur / asset owner collects subsidy payment (which is a pain for asset purchasers to do on their own)
EM3 helps aggregate demand; asset owner can access customers across a larger area, say 20km radius and collects payment from farmers. EM3 earned 10 to 20% based on type of equipment
Asset owner handles service provision but if they cannot for some reason then EM3 would help
As per booking of service (which is typically before 24 hours or on the spot) a daily schedule is prepared- which implement will go where. All this is done on a first come first serve basis. In case it's possible to bring an implement from a nearby Local Business Unit, it was done so. Basically, a lead was let go of in case the supply could not be made.
utilization capacity of any implement would depend on its versatility. However, on average you can consider 15 days per implement per crop. In other words, about 120 hours per crop. Harvester utilization during peak season was 75-80%
EM3 services cover sowing to harvest
EM3 sets prices for services based on local market intel
during lean seasons, marketed new technology from israel
explored input sales through brick and mortar stores