Dehaat Business Model – How Does This Agritech Startup Make Money?

The agriculture-based economy of India is full of opportunities for agri-tech startups. Farmers are the core of the agriculture sector because of their direct involvement in farming. Don’t you wonder how advantageous it would be to boost our farmers which will eventually boost our economy? The startup “DeHaat” realized this fact a decade ago and now it is one of the top-notch agritech companies in India. Are you curious to know its journey over the decade? If yes, then here we are presenting the “DeHaat Business Model.”

This article will provide you with deep insights into DeHaat’s working strategy, diverse revenue sources, and marketing strategy. 

Stay tuned!

DeHaat: A Brief Overview

DeHaat is an Indian agri-tech startup that provides end-to-end services to our farmers. It provides numerous services to the peasants. Apart from that, they build AI-enabled technologies for revolutionizing the supply chain of the agri-based economy. Thus, it aims to enhance the production efficiency of the agriculture sector. We will discuss this in detail in the upcoming sections of the DeHaat business model.

Prior to that, let’s have a brief overview of the company.

Working Strategy

DeHaat connects farmers with agribusinesses and service providers through its online platform and field agents. You will get a detailed description of the working strategy of the DeHaat business model below-

(A) Primary Activity

DeHaat’s primary activities are the distribution of seeds, pesticides, fertilizers & manure, machinery, cattle food, financial advisory, market linkages, etc. It works on the following working strategies-

1. Phygital Model

Phygital refers to the concept of using technology to bridge the gap between the digital world and the physical world. It provides a holistic and unique interactive experience to the user. DeHaat leverages technology and uses a last-mile network to cater to farmers’ needs. In case you are a farmer and need farming essentials like seeds, fertilizers, or pesticides. Then, you can place the orders on Dehaat’s official website/platform. Within the stipulated time, Dehaat will deliver the products to your doorstep through its broad logistics network.

2. Micro-entrepreneur Franchise Model

To provide end-to-end services to farmers, DeHaat has popularized micro-entrepreneur franchises. Here, the micro-entrepreneurs are the local representatives of the company. You can also become one if you invest money in the DeHaat franchise. All you need to do is to provide farming essential products to farmers at affordable prices and sell the crop yield to the partnered institutions. We have explained it in the last section of the Working strategy (How does it work?). Thus, you can serve as the last-mile connection between the peasants and the company. The micro-entrepreneurs are placed in DeHaat centers.

3. Field Analysis & Farmer Onboarding

DeHaat has a network of field agents who play a crucial role in field analysis. They visit farmers in person in their fields to provide advice, collect data, and deliver inputs. The field agents are typically local residents with agricultural knowledge who can communicate effectively with farmers. Thereafter, DeHaat field agents identify potential farmers and onboard them onto the platform. This whole process involves collecting information such as the farmer’s land holding size, crop history, and other relevant data.

4. Crop Advisory Services

As soon as a farmer is onboarded, he/she receives crop advisory services from DeHaat field agents. This includes advice on crop selection, planting practices, and pest management. The advice is tailored to the specific needs of each farmer based on their crop history, soil type, and other factors. The advisory services are not limited to the physical platforms. A farmer can look into the official website to access information about crops, weather, prices, and other relevant data. They can also place orders for inputs such as seeds, fertilizers, and pesticides through the platform.

5. Agribusiness Partnerships & Market Linkages

DeHaat partners with agribusinesses such as seed companies, fertilizer manufacturers, and pesticide suppliers. Mainly to provide farmers with quality inputs at competitive prices. Also, it helps farmers to connect with buyers for their crops. It enables the farmers to make informed decisions about when to sell their crops. According to the firm, it onboarded over 2000 agribusiness institutions with manufacturers, banks, insurance partners, and FMCG players. 

6. Logistics & Delivery

DeHaat manages the logistics and delivery of inputs to farmers through its field agents & micro-entrepreneurs. They deliver the inputs directly to the farmers’ doorstep, saving them time and money. It offers a range of high-quality inputs from trusted agribusiness partners at competitive prices.

(B) How does it Work?

Now, let me summarize the whole working strategy of DeHaat in a few words. The company has numerous agribusiness partners and market linkages. The partnered industrial companies provide fertilizers, seeds, pesticides, etc. at competitive prices to the company. Then the office staff members ferry these agri-inputs to the micro-entrepreneurs. They deliver these products to the farmers (in the catchment area of 5km) at affordable prices. 

Similarly, they work after the crop yield. The micro-entrepreneur collects the yield using third-party logistics services and stores it. Finally, the partnered institutional buyers like BigBasket, Blinkit, Amazon, etc. buy the crops and sell them in the market.

Revenue Sources

DeHaat is quite successful and a tough competitor to beat among agri-tech startups. Do you know it earned a massive revenue of Rs.1,273.42 Crore in FY22? How does the agritech startup make money? Through its diverse revenue sources! Below is a detailed description of DeHaat’s revenue sources-

1. Sale of Products

The sale of products and services is the main source of income in the DeHaat business model. It claims that 69% of its overall revenue comes from the sale of farm produce to institutions. While 30% comes from the sale of agri-inputs to farmers. Also, it claims to export agri-items worth Rs.65 crore. 

2. Commission on Sales

This is an important source of revenue for the company. DeHaat charges a commission on the sales of agricultural inputs made through its platform. Such as seeds, fertilizers, pesticides, manure, etc. However, the rate of commission varies depending on the type of input and the volume of sales. 

3. Fee on Services

DeHaat also earns revenue by charging service fees for value-added services such as soil testing, crop advisory, and farm equipment rentals. These services help farmers to improve their yields and incomes, and DeHaat charges a fee for providing them.

4. Government schemes

DeHaat also partners with the government to implement various schemes and programs related to agriculture. The company earns a fee for implementing these programs. For example- the Integrated Horticulture Mission scheme in Madhya Pradesh. This scheme was for the farmers of MP. They were given subsidies on small agricultural machines. Other examples are- subsidies on the seeds of Rabi crops, subsidies on solar panels, etc.

5. Sell of Data

As you have read above, DeHaat immensely focuses on field analysis. It acts as a source of revenue too! DeHaat generates revenue by selling data collected from farmers to other institutions related to the manufacturing sector. The data includes information on crop yields, soil quality, and other relevant data points that can be used by companies for market research and analysis.

6. Credit and Insurance

DeHaat has also partnered with financial institutions to offer credit and insurance to farmers. The company earns a commission on the interest charged on the loans and insurance products sold through its platform. 

Apart from these, DeHaat is aiming to increase its revenue by expanding its reach to more farmers and opening more offline centers.

Marketing Strategies

Dehaat employs a variety of marketing strategies to acquire and retain customers in the farming community. Among these strategies, the prominent ones are-

1. Field Marketing

Here, the DeHaat representatives go to local areas to promote their products and services. These representatives are none other than the “field agents.” These field agents work closely with farmers to promote the services of DeHaat while providing advisory services. Field marketing also includes events and workshops. These are highly effective in rural areas for promoting the services of the company.

2. Incentives & Word of Mouth Marketing

DeHaat incentivizes farmers to refer their friends and family to the platform through referral programs. This helps to increase the platform’s user base and grow its brand awareness. If the customers are satisfied, then they recommend Dehaat to other people in their community. Thus, the incentives and referral programs act as a word of mouth marketing.

3. Digital Marketing

It helps the agri-tech firm to personalize its marketing approach and provide customized solutions to its customers. It includes social media marketing and targeted digital advertising.

Thus, these marketing efforts are aimed at establishing Dehaat as a reliable and trustworthy partner in the farming community.

Conclusion

Established a decade ago, DeHaat has a strong foothold in the agriculture sector. Because of the successful DeHaat business model. It has modified the supply chain of the farm sector. DeHaat serves more than 1.5 million farmers located across 11 states of India. It includes Bihar, Uttar Pradesh, Jharkhand, Maharashtra, Madhya Pradesh, Rajasthan, West Bengal, Odisha, Gujarat, Chhattisgarh, and Haryana. The initiative of this agritech is felicitated by some famous organizations. Such as NASSCOM, Forbes, Niti Aayog, Bill Gates Foundation, etc.