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‘Buy land, they are not making it anymore’ a quote by Mark Twain, emphasizes the importance of Agri-Realty and its immense value. Agriculture as an asset class falls under the broad investment category of real assets which are physical in nature and provide hard tangible ownership. Agricultural land has become an attractive investment destination for several reasons. Most important of all being the strong market fundamentals in support of the sector on both the demand and supply side. Increasing population, changing demographics, reductions in arable land, fast urbanization, and climate change have led to the increased demand for agricultural lands. Agriculture lands have outperformed most asset classes throughout history, particularly on a risk basis when considering volatility. The NCREIF (National Council of Real Estate Investment Fiduciaries) Index which is the world’s agriculture benchmark has yielded an annual return of 13.69% since 2000 with a standard deviation of only 7.58%. This far outperforms equities, bonds, and other asset classes. Performance is expected to improve further over the next decade due to strong demand-supply fundamentals.
Owing to this high potential of agricultural land as an investment option, many HNIs in India are interested in investing in agricultural land as an alternative asset but are facing difficulty in finding/searching these lands. Again people from the mid-income group, though they want to invest in agricultural land, are not able to do so due to the lack of financing facilities. Besides, the farmers and agri-realty developers are also facing difficulties to sell agri lands due to lack of liquidity.
At present, there is no liquidity platform to buy/sell agri lands as most of the existing reality portals are focused into listing urban properties or houses/flats. The entire market is untapped and most of the transactions happen through agents reaping huge commissions and margins. To solve these problems and tap the market, SFarmsIndia- India’s First Agri Land Marketplace has created a liquidity platform to buy/sell agriculture lands, estate lands, eco farms, and farmlands.
Read more about SFarmsIndia Business Model, Founders, Revenue, Funding, Competitors, Growth, etc., here in this article.
SfarmsIndia - Company Highlights
- Startup Name-SFarmsIndia
- Headquarter -Hyderabad
- Co-founders-Kamesh Mupparaju, Linus Lindgren
- Parent Organization-Szuper Agridigital Solutions Pvt. Ltd.
About SFarmsIndia and How it Works
SFarmsIndia is an online web application with two core functions; listing and fraction trading. These two functions work together creating a tellable synergy.
Listing Platform: On the listing platform buyers can find/search agricultural lands and sellers can list/post the agriculture lands for sale/lease. The seller has to sign up on the platform and choose the category of agri land that needs to be listed. Once listed, the buyer can search the agri lands based on the selected category and contact the buyer directly. It, therefore, creates liquidity for buying and selling of agri lands.
Based on the land type and functionality, SFarmsIndia categorizes the lands into four types which are as follows:
- Estate Lands – Coffee, Tea, and Rubber Estate Lands
- Eco Farms- Ecological Sustainable Farms and Farmhouses
- Collective Farms- Cooperative farms and Group farms
Fraction Trading Platform: SFarmsIndia's main USP is that it makes an agreement with the seller (agri-realty developer) to issue fractions by digital land contract against their lands. The sellers/Agri reality developers can liquidate their big land parcels utilizing these fractions. Each agri land is assigned with a digital contract and divided into 2000 fractions per acre, thereby enabling medium to small income groups to acquire lands easily. Once the fractions are issued, they will be credited to the agri-realty developer's wallet on the platform, and the developer can sell directly through the trading platform. Buyers can place orders to buy the fractions for whichever price they feel is right. The trade engine will automatically match their order with another customer's orders of the opposite nature (BUY vs. SELL). All orders are displayed through the site's interface. Users can either use the site via the web interface or connect through the API to access the trading platform. The trading platform uses a proprietary trading engine that is automated and manually overlooked.
Buyers are flexible to buy the smallest trade-able fractions of the agri land, and buyers can contact directly to the sellers hence no commission. Sellers can list and liquidate their agri lands very easily by issuing fractions. It's a peer-to-peer platform; hence, no middlemen are involved.
Technology is the core of SFarmsIndias' business operations. Using technology, they intend to create an effective and efficient platform for agri lands that can eliminate the middlemen who inflate the prices. SFarmsIndia has been taking one step at a time in building reality out of its vision. By doing so, SFarmsIndia aims to systematically engage in so far untapped agri realty market by changing the way agricultural land is transacted across India.
Agri Realty Industry Details
India presently has one of the lowest lands holding per capita, lower than the global average. According to the Agriculture Census, the total number of operational holdings in India numbered 138.35 million with an average size of 1.15 hectares per capita. Of the total holdings, 85% are in marginal and small farm categories of less than 2 hectares.
India is currently the second most populated country in the world but with a small land area, smaller than China with a similar population. In such a situation, farmland has gained prominence and hence difficult to acquire. The value of land has increased from 3-fold to 100-fold rise since 2000.
There has been a countrywide spike in the price of agricultural land due to a variety of reasons. All of India's farmland was valued at over $2 trillion in 2010, and today it has grown to be valued at around $10 trillion. To put this figure into perspective, it is larger than the value of all the gold ever mined.
SFarmsIndia targets buyers and sellers of agri lands across India. Middle class to high net worth investors looking to invest in agri lands are considered an alternative asset class. According to the World Bank, India's middle class is about 300 million and about 40 million people make up the higher middle class. Their average disposable income has grown year after year, leading into investment in agri realty. The size of agri land market in India is around $15 billion, which is untapped due to lack of liquidity and lack of financing facilities.
Around 3 million transactions (changing the property rights from one person to the other) happened in FY18-19, and 95% of these transactions took place via middlemen. However, with increasing digitalization trend is set to change, and the shift from middlemen to web platforms is inevitable.
Kamesh Mupparaju is the founder and CEO of SFarmsIndia. Mupparaju has a B.Tech degree in Electronics and Telecommunications, followed by an MBA in Finance from Osmania University. Starting with Reliagre Commodities as a Research Analyst, Kamesh served many key leadership roles across companies including Padmakshi Financial Services Ltd., where he served as the Manager of Commodity Operations and Analysis; True Infotech, where he was a Sr Research Analyst. He then moved on to become an FX Analyst and Dealer at Six Capital, SGX Centre 1. Mupparaju finally decided to nourish his entrepreneurial abilities and founded ETHEXIndia (India's first market place for Ethereum Tokens), after he served as a founding Board member of BTCXIndia (first Bitcoin exchange in India) for over 4 years. He also served as the Advisor of Blockonomics before founding SFarmsIndia.
SFarmsIndia currently works with a well-knit team of employees.
How was SFarmsIndia Started
Kamesh, coming from a farmers' family, had primary insights concerning the agricultural sector in India. He observed his father, a farmer by occupation struggle to sell his agricultural land. Kamesh realized that it was really challenging to sell his land since the land is located in the village, and the potential buyers were not aware of the sale. The same situation has been observed with some other farmers in the village. Besides, brokers are a hindrance in transactions due to non-transparency. Taking all these into account, it occurred that there should be a system in place that helps people like Kamesh's father.
Kamesh started his journey of ideation by going through most of the property websites across India. From such intense research, he concluded that there is little or no focus on agricultural land and that there is no platform exclusively for agricultural lands. Nevertheless, in contrast to traditional property websites, the agri reality market is bigger in terms of valuation. As the research proceeded, Kamesh found that in Telangana alone, for FY 18-19, the agricultural land market size is Rs. 15,000 Cr (registration value), and the market value would be somewhere Rs 50,000 Cr. The area of the transacted land is 3.2 Lakh acres. This is only in Telangana and considering pan India he understood agri realty is a very big untapped market in India, hence figuring out the solution.
Going ahead, Kamesh decided to launch the web application, which consists of listing and fractional trading functionality. For the same his 12+ years of trading experience and functional experience of trade engine designs, proved helpful in designing and developing the trade engine and the listing platform. After rigorous testing, he launched the beta version of the listing platform on July '18 and launched the beta version of fractional trading on Jan'19.
SFarmsIndia Launched the live fractional trading by Feb'19 with an MVP of 1.48 Acres. The physical land was divided into 2960 fractions ( 1 Acre= 2000 fractions) and delivered successfully. The company is in negotiations with agri- realty developers to launch big land parcels. SFarmsIndia went out of beta on May '19 for the listing platform and moving forward with good traction.
Once Kamesh developed an understanding of the status and the existing gaps in the agri reality industry; he discussed the idea with a group of farmers at his village. Though there was some reluctance at the beginning due to apprehensions about the online system, they eventually like the idea. Farmers' increasing frustration with the middlemen and the delayed process led farmers to associate with a platform that avoids middlemen and also provides effective prices for the land. As few transactions closed more farmers joined the platform.
SFarmsIndia - Name, Tagline, and Logo
Most of the big land banks/land parcels in India are barren lands or non-cultivated lands and most of the farmers in India hold small farms, which are cultivated not like those in the western countries. The small farms are productive in nature, and SFarmsIndias' main objective is to convert barren lands into produce lands. Hence, the name SFarmsIndia, which means Small Farms in India.
As SFarmsIndia ventured into a unique and untapped market, the tag line was decided as 'India's First Agri Land Marketplace'
The Logo colors refer to:
- "S" color - Sunlight
- "Farms" color - Land
- "India" color - Trees.
SFarmsIndia - Business Model and Revenue Model
SFarmsIndia has a Freemium Model. It charges Rs 2000 for a pro account with three months subscription and Rs 5000 for a pro plus account with three months subscription. Besides, it also has a Fraction Trading Fee, which is capped at 0.5%, as a transaction fee on both buying/selling of the fractions.
SFarmsIndia - User Acquisition and Growth
Initially, SFarmsIndia has created the home page with three simple text lines; SFarmsIndia- India's First Agri Land Marketplace, More details coming soon!! and Notify Me. Using the 'Notify Me' section, they have managed to collect emails of a few early adopters.
Later, Kamesh directly reached out to buyers via agri land meetups, agri tech launch pads, agriculture events, etc. where he shared his thoughts and ideas about the product and requested them to register for the beta launch. He then went to his village to get interested sellers onto the platform through direct contact.
I have researched the information of the interested sellers and created a preliminary database on the website. Ideally, the first 100 users came from these channels.
As SFarmsIndia attained a decent number of seller/property listings on their network, it reached out to potential buyers (who are early adopters and provide the email for notification) through email notifications, promotion in the WhatsApp groups, and social announcements.
In order to retain its customers, SFarmsIndia arranged a beta launch party in an eco-farm in Hyderabad after it reached 100 signups points. For the party, the company invited all its contacts, early signup customers, etc. It was a kind of meetup, where SFarmsIndia collected decent data of the available agri lands. Further, it also opened a customer service desk and did outbound calls for listings. Simultaneously it started promoting through Google Ad network, SMS network, and through social media. SFarmsIndia has spent around 2 million INR on marketing and promotions.
SFarmsIndia - Startup Challenges
Most of the farmers and Agri Realty developers are not technology literates to list their listings on the web platform directly. Hence, SFarmsIndia has faced challenges in terms of getting sellers onto the platform. In order to overcome this, the company has created a WhatsApp listing.
SFarmsIndia - Advisors and Mentors
Advisors at SFarmsIndia include:
1. Linus Lindgren, advisor for business strategy.
2. Siva Sitamraju, Mtech(IIT-D) is an advisor for technology.
SFarmsIndia - Awards
Super Agridigital Solutions Pvt. Ltd, the company behind SFarmsIndia, is recognized as a Start-up by the Department of Industrial Policy and Promotion, Govt of India under Start-up India initiate.
SFarmsIndia - Future Plans
SFarmsIndia has gained traction with over 5000 signups, over 1300 listings and over 200 deals changing hands. Added to this, over 2960 fractions equivalent to 1.48 acre have been traded and delivered. It is the only platform in India exclusive for agri lands where agricultural lands can be listed and traded. Therefore, SFarmsIndia has the opportunity to tap at least 10% of the estimated $15 billion Indian agri realty market.
In the short term, SFarmsIndia envisions to get the highest number of listings in their listing platform for Agri-Realty and create a unique market: an intersection of Agritech, Agri-Realty and Online Marketplace for buying and selling Agri lands. Over the long-range, SFarmsIndia aims become the most respected and trusted brand for on-demand trading/liquidity solutions in Agri-Realty market and tap at least 10% market share in Agri Realty.
Buyers and sellers already love our listing platform. SFarmsIndia is an early-stage startup with good traction in place. We hope the future is bright for us since investment in agri lands is a good alternative asset class - Kamesh Mupparaju says
SFarmsIndia - FAQs
Who founded SFarmsIndia?
Kamesh Mupparaju and Linus Lindgren founded SFarmsIndia in 2018
What is SFarmsIndia?
SFarmsIndia- India’s First Agri Land Marketplace has created a liquidity platform to buy/sell agriculture lands, estate lands, eco farms and farmlands.
What is the main function of SFarmsIndia?
SFarmsIndia is an online web application with two core functions; listing and fraction trading. These two functions work together creating a great synergy.
What is the tagline of SFarms India?
As SFarmsIndia ventured into a unique and untapped market, the tag line was decided as 'India's First Agri Land Marketplace'