Arul Kumar became the first aqua farmer in his family four years ago when he bought a six-acre land in Chidambaram, Tamil Nadu, to build a pond at a friend’s suggestion. The 38-year old thought that he is only a few shrimps and 120 days away from a flourishing business. But shrimps aren’t as pleasant to farm, as they are to eat.
For the next two and a half years, Kumar’s pond seemed no less than an underwater shrimp lab; with every culture cycle, he struggled with how much shrimp feed to use or how to maintain the water quality. This is until he registered himself with FarmMOJO. The app acted as the old dadaji with knowledge gathered from good ol’ days, and mentored Kumar on optimising the feed. Next cycle, Kumar’s margin increased by almost 20%.
And that is exactly the role that this farm advisor app plays in the lives of these shrimp farmers —an AI-enabled dadaji who teaches them all the tips and tricks of the trade. “We look to provide assistance on three grounds: good water quality management, feed utilisation and diagnosis of the animal’s health,” says Rajamanohar Somasundaram (fondly known as Raj), founder and CEO of Aquaconnect — the company that launched FarmMOJO.
The idea of the app came to the founder in “a moment of serendipity”, as described by Raj. On a train journey to his hometown Chidambaram, the serial entrepreneur from IIT got talking with a local shrimp farmer and realised that the sector is severely lacking in technological advancement. “Farms in Norway and Scotland have deployed devices such as lice-shooting robots to protect their salmon, while the highest form of technology at the disposal of Indian aqua farmers is the timed feeding system that goes back to the 80s,” says Raj.
Launched in 2017, FarmMOJO is a huge leap from that. Its proprietary SaaS (or software as a service) tools and AI guides a breeder on how to increase revenue, minimise costs and reduce risks due to disease outbreaks. The farmer has to enter necessary data (or the start-up could even send its staffer to help out with that) and the proprietary model judges the water quality on 18 parameters, including salinity, pH, dissolved oxygen and bloom levels. Based on findings, alerts and suggestions on basic pond management practices are sent to the farmer. One out of every four shrimp farmers incurs loss because of outbreaks from poor water quality, says Raj. “There have been several instances where a single diseased animal has destroyed the entire culture, bankrupting the farmer,” he adds.
When the stakes are so high, it should be easy to win over customers. But if a shrimp farmer is still not convinced, s/he could try FarmMOJO’s beta version for free before taking the subscription model of 2,000 per pond per culture cycle. With the paid model, s/he can integrate the app with smart farm tools such as IoT and sensors. Currently 6,000 farmers in Andhra Pradesh, Gujarat and Tamil Nadu are using the app, with 5x increase in their number over last year. Aquaconnect offers a third service, but that is to the big corporate aqua farms. Here it customises its tools to offer advance services such as cost and inventory management.
Imran Khan, who has a six-hectare shrimp farm in Palsana, Gujarat, has been in the business for eight years now. He used the app for the first time in the last cycle. “FarmMOJO gives me weekly and monthly data on the water quality of my pond and the adequate amount of shrimp feed. I can access it anytime on my mobile phone, and I don’t have to depend on local analysts anymore for their opinion,” Khan says. The start-up offers more than just a touchscreen experience; it deploys field assistants or runners, who are graduates in aquaculture, to do water-sampling calculations. In fact, they are just a call away to facilitate app services for the farmers in the local language.
Why is this a good industry
It seems like a good thing to do, to help struggling aquaculturists in far off places. But why should investors be interested? They should be because shrimp farming is expected to do very well in the next five years. India is already at an advantage — we are the world’s largest shrimp exporter in value, and this contributes close to $5 billion to the country’s $7 billion seafood industry. An International Market Analysis Research and Consulting (IMARC) report has predicted that the current production of 600,000 metric ton will reach 1.13 million at a CAGR of 9% over this period.
Aquaconnect’s FarmMOJO could be the beginning of a seismic change. Anand Ramanathan, partner at Deloitte India, says that once technology becomes the norm in fisheries, it won’t take much long to introduce higher innovations that will further increase yield and improve productivity. Globally, there are various solutions that are being tried out, such as fish farms (pods) that are left to float in open seas, and sensors that detect how hungry a fish feels and triggers prompts. These products may seem like a far reality now, but companies are investing in them because of a growing demand for seafood in this increasingly health conscious world.
Earlier this year, Aquaconnect raised $1.1 million from impact venture fund Omnivore and aquaculture accelerator programme HATCH. “Aquaculture is one of the most profitable and progressive industries at the moment and Aquaconnect’s network using a SaaS model and predictive AI principles is one of its kind in India,” says Mark Kahn, managing partner at Omnivore.
Every cycle (of 120-150 days) a farmer spends 900,000 to a million per acre and earns close to 1.5 million. FarmMOJO’s paid version of the app charges 2,000-10,000 per pond per cycle and these subscriptions made up nearly 10% of its FY19 revenue of 10.85 million. A major chunk (60%) of FarmMOJO’s revenue comes from their marketplace, where other aqua-industry stakeholders including feed mills, seafood processors and farm product and equipment manufacturers can sell their products. The remaining 30% came from their data intelligence component, which connects the farms with the upstream (hatcheries, feed producers, farm equipment manufacturers, lenders, insurers) and downstream of the supply chain (processors, exporters and certifying bodies). The data intelligence improves the chances of farmers getting low-interest credits from banks and certification for exporting to the overseas market.
Gujarat’s Khan goes to this marketplace for better prices. “The same products that are available at the local market can be found on the app at a discount. My margin in the last cycle went up by 15%,” he says.
Carsten Krome, CEO of HATCH Accelerator, sees this as Aquaconnect’s bigger achievement. “Aquaconnect has built a large community on its app. The technology is subsidised through the sale of products and services on the platform,” he says. This is a model many farming-assistance applications are trying. For example, eKutir founded in 2009 provides guidance to land farmers and sells them everything from soil to seeds.
There is a third line of revenue that Aquaconnect plans to launch by 2020. It is planning to partner with credit and insurance providers to serve this capital-deficit sector. Otherwise financial institutions stay a mile away from this sector for want of organised data. FarmMOJO’s data collection and analytics can help in such a situation. For example, it can gauge the health of a farm and the likely produce from it, and a lender can decide to extend credit based on that. Again, start-ups such as CropIn, for land farmers, are trying such a solution where banks monitor the running of a farm through data collected by the app. Aquaconnect’s data intelligence products could also be used by processors for sustainable procurement or even by certifying bodies.
Currently the app services largely the shrimp farmers, but it is working to include Indian farmers of basa and tilapia fish. The app, available in English, is also going to offer telephonic support in six regional languages to extend its reach. It is also eyeing farms in the Indonesian, Thailand and Vietnamese waters — the global aquaculture production hub. “We’ve already started pilots in Aceh and Sulawesi regions in Indonesia. Those areas have very similar practices to India and farm the same species. So it’s the next natural progression for us,” says Raj.
Investors see this global ambition as a unicorn move. “In five years, we envision Aquaconnect as a full-stack global aquaculture technology venture in South Asian countries, reaching 15,000 farmers by the end of 2020,” says HATCH’s Krome. “We are potentially looking at helping build a unicorn start-up in the aquaculture sector,” he exclaims.
The start-up has won the innovator award by Seafood Innovation Project Accelerator (SIP), Indonesia and partnered with the Australian (which partly funds SIP) and Indonesian governments as part of the project to help build resilient communities engaged in the Indonesian fisheries sector. The firm has also partnered with IDH- The Sustainable Trade Initiative for its project FIT, or Farmers in Transition. In this project, machine learning is used to predict disease occurrence in aquaculture populations in developing countries such as Indonesia, Malaysia, Vietnam, Haiti and Thailand.
As Aquaconnect forays into deep seas, it will face competitors such as San Francisco-based AI-company Aquabyte, Australian machine-learning platform Sense-T and Norwegian Seafood Innovation Cluster’s AquaCloud. While they offer sophisticated tools and fairly advanced features, Raj believes his company is still at an advantage.
One, he says, that their solutions are way beyond what is affordable to the farmers here. Two, there is a need for assisted models in India. “The sector isn’t developed enough for farmers to hop on to sophisticated technology quickly,” he says, adding, “it has to be phased. Thirdly, our models are tailor made for Asian fish such as basa and tilapia and white pacific shrimp, which is the most bred in India. Our expertise lies in that, while their expertise lies in salmon and other European fish.”
Aquaconnect has got many things going for it — an evolving market, enthusiastic investors and first mover advantage. There is also Government of India’s announcement of the new Department of Fisheries with a budget of 804 crores, which could help further the start-up’s plans. But these are still unchartered waters in India, and it will take a while for the start-up to post real profits.