Agros CEO, Max Nelen, shared his insights in Brinc article regarding the recent landscape of the AgTech Startup Ecosystem in India and Southeast Asia.
Read more here: The AgTech Startup Ecosystem in India and Southeast Asia: Industry Overview
SINGAPORE, March 14, 2023 â Agros, a Singapore-headquartered Agri-tech startup, has raised US$2.7 million in a pre-Series A funding round led by Gaia Impact Fund and Schneider Electric Energy Access Asia. Seed round investor Wavemaker Impact continued to support Agros and invested again. The round also saw participation from Silverstrand Capital, Circle Capital, and PropertyGuru Founder and impact investor, Steve Melhuish.
Founded in November 2019, Agros is the pioneer in sustainable agriculture for small and medium-sized horticulture farmers across Asia. The company is helping horticulture farmers to decarbonize, whilst doubling their profit through a full-stack solution.
Its first two products – Agrosolar and Agrosoil – are solving major agriculture problems like fuel dependency and soil degradation. After switching to Agrosâ ecosystem, farmers can double their profits from reduced input costs, improved yields, and higher prices from better-quality crops.
Agros has been enjoying the tailwind from rising fuel and fertilizer prices, which has encouraged farmers to switch to more sustainable and efficient practices. This has resulted in 4x year-on-year revenue growth in 2022. The company currently works with 1,500 farmers across 2 Asian countries and has increased farmersâ profits by more than $1,500,000 and abated up to 5,000 tons of Co2e.
âWeâre glad to have found investors who share our belief that a prosperous, inclusive, and low-carbon world is possible. The timing couldnât have been more perfect and as the pioneer, we are well positioned to become the regional market leader,â said Max Nelen, Founder and CEO of Agros.
âWeâre very honored and excited to support Agrosâ journey. Weâve been impressed by Max and his team, dedicated and passionate, in providing decarbonized solutions for farmers. Agros is a market shaper and has a huge potential to grow across the region, we strongly believe theyâre in the best position to support millions of farmers to increase their income while making their farm climate resilient,â said HÃĐlÃĻne Demaegdt, President of Gaia Impact Fund.
Gilles Vermot Desroches, President of Schneider Electric Energy Access Asia adds: âWe share with Max and the Agros team the same deep conviction that sustainable agriculture plays a crucial factor in tackling climate change and contributing to a fairer and more inclusive society.
Agros’ work in providing farmers with solar-powered irrigation systems and raising awareness on sustainable agri-practices not only leads to higher income for farmers, but also makes communities more resilient to variable climate conditions and helps reduce CO2 emissions. We are very proud to be able to to support Agros in creating this systemic change.
Agros will use the funds to scale in its existing markets, open a third country, strengthen its leadership team and develop an App streamlining the value chain. This will allow Agros to transform the lives of thousands of farmers, while abating millions of tons of carbon emissions.
âWe are very impressed with the results that Max and his team are achieving. We believe that entrepreneurs can start high-growth, high-margin businesses that also greatly reduce climate emissions. Max and his team have proven this with their efforts,â said Doug Parker, founding partner of Wavemaker Impact.
For more information, please contact:
Max Nelen, Founder & CEO
About Agros
Agros is the pioneer in sustainable farming solutions for 18 million horticulture farmers across Asia. Its full-stack solution allows farmers to double their profit and become climate-resilient for generations to come.
About Gaia Impact Fund
Gaia Impact Fund is a venture capital firm specializing in renewable energy. It invests and builds long-term partnerships with start-ups and SMEs operating in Sub-Saharan Africa and South-East Asia with a strong environmental and social focus. Since 2017, it has invested in 12 innovative companies and is actively pursuing its investment strategy in the renewable energy value chain: small decentralized solar systems, productive uses of energy, mini grids, C&I, enabling tech.
About Schneider Electric Energy Access Asia
Schneider Electric Energy Access Asia (SEEAA) is a +20M⎠impact fund, launched by Schneider Electric, together with Norfund, EDFI MC and Amundi Asset Management, to positively contribute to SGD 7, with two main objectives: (i) bridging the energy access gap in South and Southeast Asia, where rural communities often lack access to reliable energy sources, and (ii) fostering the adoption of renewables in the energy mix and Net Zero.
About Wavemaker Impact
Wavemaker Impact is a climatetech venture builder that co-founds sustainability-focused businesses in Southeast Asia with proven entrepreneurs. It aims to rally individuals, investors, and businesses who care about the planet, and want to make a rapid, tangible change in the reduction of carbon emissions. For more information, visit: https://wavemakerimpact.com/.
Phnom Penh, November 14, 2022 â The Pioneer Facility, an impact investment fund managed by Nexus for Development, signs an agreement with Agros, a social enterprise specialized in providing solar-powered irrigation systems. Agros bundles technologies, inputs, advisory, and financing to support farmers to adopt regenerative agriculture practices that increase their profits and reduce carbon emissions. The Pioneer Facility loan of USD 500,000 will finance inventory and working capital needs to accelerate the deployment of their activity in Cambodia and Myanmar.
From conventional to regenerative farming
Agros Pte Ltd (âAgrosâ) was launched at the intersection of sustainable agriculture and climate change. About 500 million smallholder farmers produce 80% of the worldâs food yet they donât have access to affordable energy and productive appliances. Across Southeast Asia, millions of smallholder farmers face three main problems: low yields, low income and financial exclusion. Smallholder farmers in particular are subject to the inevitable risks of market volatility as fuel and fertilizer prices continue to increase in the region, which has significant implications on their livelihoods. Fuel prices have more than doubled/tripled in certain parts of Myanmar and Cambodia since earlier this year. Many farmers in Southeast Asia have not adopted a solar irrigation system due to market awareness and affordability challenges.
Under current market volatility, Agros strives to solve three main barriers to adopting a solar irrigation system: affordability, performance and distribution. They design, distribute, and provide financing for solar water pumps in Myanmar and Cambodia, with a mission to double the income of hundreds of thousands of farmers while abating millions of tons of carbon emissions by 2030. The company is also building a platform combining multiple farming technologies, services, and financing to support farmers to transition from conventional to regenerative farming.
Climate change is a major threat to our environment, society, and economy. Weâre glad to have found with Nexus a partner who shares our belief that a prosperous, inclusive, and low-carbon world is possible. The Pioneer Facility will contribute strongly to our 3x growth projected for 2023 by financing our working capital needs.
In early 2022, Agros entered the Cambodia market and currently has 3 operating hubs in Cambodia and 7 in Myanmar. They are poised for further hub expansion in both countries and are scoping a third market for 2023.
Farming decarbonisation
Agros is seeking to decarbonise the farmersâ whole journey, from input to market. This implies launching soil and crop management solutions such as biological fertilizer, high-quality seeds, solar milling machinery, solar cold rooms, zero-carbon certification and access to a premium marketplace. The environmental impacts could evolve to be much more as the product offerings grow. The next product Agros is launching, Agrosoil, seeks to restore degraded soil, increase yields and reduce expenses on synthetic fertilizers.
By replacing fuel-based energy consumption with a renewable energy source, the solar irrigation systems already being installed reduce carbon emissions. Based on surveys of current fuel usage for each customer, it is estimated that each solar pump will reduce on average 4 tons of CO2 emissions per year, meaning 80,000 tons of annual CO2 emissions reduction by 2026 based on 20,000 units installed. Nexus for Development is engaged to develop a carbon finance project and early calculations support the emission reduction estimation.
Improving livelihoods
Agrosâ social objective is to revolutionise agriculture across Southeast Asia, offering millions of farmers the technologies, services, financing and accessibility they need to transition to long-term profitable farming. The goal is to boost income from fuel savings and extra crop cycles (additional irrigated land).
So far, more than 900 households in Myanmar and more than 100 households in Cambodia have benefited from Agrosâ solar irrigation technology, with total beneficiaries reaching over 3,550. Agrosâ current beneficiaries spend up to 30% of their income on fuel to enable irrigation of their crops; importantly, installation of Agrosâ solar irrigation system results in monthly fuel savings of up to $45 per pump on average, with a payback period between 12-24 months.
Further, Agros has gradually improved its gender strategies to engage with women beneficiaries and plans to do more in the coming years. The company created about 20 jobs for women in one year, including sales agents to engage with women farmers.
Nexus has been working with Agros since 2021 and provided a small working capital loan in January 2021 to fuel their early expansion in Myanmar. Today, the Pioneer Facility loan supports Agros at a critical time in its growth trajectory by funding their inventory purchases to meet increasing sales.
Agros has done tremendously over the past few years in Myanmar, despite the political and economic turmoil. We are delighted to continue supporting Agrosâ new market entries, bringing sustainable solutions to farmers who are facing immense challenges.
About Pioneer Facility
Pioneer Facility is an innovative fund that provides scale-up capital, via working capital or capex loans, to enterprises that offer sustainable energy and clean water solutions to underserved populations in Southeast Asia.
For more information please contact:Â pioneerfacility@nexusfordevelopment.org
About Nexus for Development
Nexus for Development is an international not-for-profit organization founded on the principles of sustainable development. We drive access to finance in developing economies across Southeast Asia to increase sustainable energy and water resource development, advance low-carbon solutions, and scale local implementers.
For more information please contact:Â contact@nexusfordevelopment.org
The concerns of the environment degradation and the consumerâs awareness about irrigation solution had increased in the recent years. The use of diesel engine always has the negative environmental impacts and many health problems caused by air pollution. Sustainable agriculture is rapidly developing and is now practiced by our customers in the sustainable way and affordable way through the Agrosolar systems.
Cambodia, Bantey Menchey Province
Sen Odom, has been using our solar irrigation system for 9 months. He lives in Bantey Menchey province and grows crops like longan and coconuts. His daily activities are to maintain the quality of farms, crops and also operates heavy machinery, performs physical labor, and supervises other farm laborers.
After switching to solar irrigation system, anyone of his family members can start daily irrigation without his help and now their farming productivity has increased than last year. According to the report of ESG survey, the system lets them irrigate extra farms and save fuel cost to invest more in his business and family well-being.
Myanmar, Shan State
âThis is our farm and our home where we live. I want to make sure my children grow up in the sustainable environment and save the world. Also, I want to reduce food loss and feed the population efficiently in an affordable way as much as I can.â â Daw Ye Ye Nyunt (Women Farmer Group in Shan State)
Agrosolar provides the innovative solution not only to individual farmer but also a group of women farmers who has limited access to the farming. Using solar water pump with sharing model helps increase savings and foresee the future of their children to study in the university. This empowers the women community to participate more and play the important role in the daily farming activities.
Myanmar, Dry Zone
Daw San Aye has been our loyal customer and she purchased two systems after experiencing the benefits of using solar water pumps. People told her, âYou are the only one who is doing very great this year and you are going to earn more because of this systemâ.
Her neighbors failed to make a profit while they were hoping not to take loan even for the cash crops. The problem of rising fuel prices affected all of the farmers in Myanmar, however, she chose well and had her solar water pump installed since last year.
Why choose Agros?
Agros offers goods and services with the goal of helping farmers double their income and reduce the carbon footprints. There is no operational costs for water pumps in Agros. The services offer the specialized products recommendation which is based on the site assessment such as their farming activities and irrigated lands. Access to financial service is no longer a concern for farmers as they can arrange their payments using our seasonal financing and payback period under two years. Agros company sets up the whole warranty service, offers advisory services, and stands out as a trustworthy agricultural partner in SEA.
Max Nelen – Founder & CEO at Agros
“Close Your Eyes. Make the Jump and See Where You Land.”
The Social Innovation Podcast spoke to Max Nelen, the CEO and Founder of Agros about all things farming and agriculture.
Listen here: Creating Impact and Profit Through Social Innovation – Conversations with the global leaders in Impact Investing and Social Innovation
Smallholder farmers are the backbone of agriculture â a key sector in Cambodiaâs sustainable development. As more and more new technological innovations help improve farmsâ efficiency and productivity, the agricultural sector will continue to develop.
However, most smallholder farmers cannot pay for these technologies out of pocket, so they turn to their local banks for loans. Banks consider agriculture a risky business, so they require loan collateral that is far beyond the reach of smallholder farmers. This leads to farmersâ loan applications being rejected because farmers cannot provide said collateral for loans. When farmers cannot obtain bank loans, they resort to high-interest credit from other sources.
This challenge and the barriers smallholder farmers face when pursuing external financing, brings to light the question, how can we fill the financing gap to integrate smallholder farmers?
In this blog, Agrosolar shares their solution to filling the financing gap.
Why do you offer solar-powered irrigation systems?
Agrosolar believes that renewable energy is one of the solutions to reduce global warming, as climate change is challenging the fact that food production needs to double by 2050 to continue to feed the planet. Across Southeast Asia, millions of smallholder farmers face three main problems: low yields, low profitability, and financial exclusion. The good news is that all of those can be solved with one solution: affordable and sustainable solar irrigation systems. This allows them to save on fuel monthly and irrigate more of their landholding at zero operational cost. We have new customers monthly, showing that smallholder farmers are willing to replace their conventional fuel pumps, especially during times of global crisis [like] fuel shortages and higher fuel prices.
What end-user financing product/model do you offer?
[A couple of different] financing products are offered to our farmers. Our first entry point is to calculate the fuel savings and the payback period based on those savings. Once the payback period is attractive, we will try to sell the product in cash.However, [if] the farmer doesnât have the cash on hand but still can afford to pay it off quickly, then Agrosolar offers a âPay After Harvestâ plan. [T]here is a partial payment at the moment of installation, and the remaining amount is paid after the next harvest, within 4 months. If the farmers still struggle to pay the remaining amount within the next 4 months, we work with local microfinance institutions (MFIs) and non-banking financial institutions (NBFIs) to provide loans or leasing plans for up to 18 months. Depending on the farmerâs future cash flows, these can be paid monthly or per season.
What end-user financing product/model do you offer?
[A couple of different] financing products are offered to our farmers. Our first entry point is to calculate the fuel savings and the payback period based on those savings. Once the payback period is attractive, we will try to sell the product in cash.However, [if] the farmer doesnât have the cash on hand but still can afford to pay it off quickly, then Agrosolar offers a âPay After Harvestâ plan. [T]here is a partial payment at the moment of installation, and the remaining amount is paid after the next harvest, within 4 months.
Farmer using Agrosolar water pump
If the farmers still struggle to pay the remaining amount within the next 4 months, we work with local microfinance institutions (MFIs) and non-banking financial institutions (NBFIs) to provide loans or leasing plans for up to 18 months. Depending on the farmerâs future cash flows, these can be paid monthly or per season.
Was there a need to be innovative in designing/implementing your end-user financing model?
The innovation is found in two main aspects of the end-user financing model: (1) [the] structuring [of] payment terms to align with farmersâ seasonal income, and (2) the developing [of] automated underwriting systems to align with the nature of our business and clients.
The products must be affordable and reliable, so our target customers may purchase the system at reasonable prices. To reduce the risk and cost of financing, we must broaden the financing options by providing internal financing rather than relying on external loans or MFIs, which will undoubtedly assist farmers in purchasing the system at a lower cost and in a shorter period of time.
[Our customer-focused innovation] doesnât end there. On a daily basis, the team talks to farmers and sees how to improve our finance offering. The key is to match it to [farmersâ] cash flows to guarantee affordability and high repayment rates. The advantage of financing productive use appliances is that there is an increased income, which can be used â and almost guaranteed â to repay the financing [product]. This makes it very attractive to launch these financing plans, even in developing countries.Why did you decide to create a partnership?
Forming partnership for commercial and end-user financing with external organizations is beneficial for both parties. With a commercial partnership, we can reach out and serve those customer segments which are not under the coverage areas due to logistical, geographical, or operational constraints. The same goes with financial partners, such as consumer loan organizations or MFIs,[as it provides] a long-term financing scheme [for businesses/operations that have] limited resources, internal financing systems, and manpower for the cash collection. [T]he partnership is essential for the long run and to fulfill the requirements of [base of the pyramid] customers and smallholder farmers.
A member of the Agrosolar team advising a farmer on product and financing options.
What sort of complementary value was brought in by the partner to implement the end-user financing model?
Having [our] partner implement the end-user financing model brought us better coverage and capacities over existing market segments by providing longer-term payments to those farmers who need the financing. Sales traction and market penetration have increased through the qualified leads, and [it]is easy to launch new operations with low start-up costs. Also, farmers can take advantage of income savings and invest more in the lands. Getting the sales team up and running in minimum time helps to ensure t[that we start to profit from the partnership and get a head start in boosting sales and marketing. This will effectively reduce the workloads on extensive credit assessment and follow on payment risk. Meanwhile, we can focus on improving after-sale service and product development to meet the market requirement.
Agrosolar smart meter
Agrosolar provides products and services that enable farmers to double their income and reduce their carbon footprint to zero. Agrosolar is the pioneer in providing affordable, reliable and customizable solar solutions that allow farmers to continue producing food for the growing population. In addition, their last-mile distribution ecosystem tackles climate change and alleviates energy poverty in developing countries in Southeast Asia.
