In India, farming is a way of life. About a third the size of the United States, the country produces billions of dollars’ worth of produce, largely to feed its own ballooning population. It’s estimated that India has more than 100 million small-scale farmers, and they all face a looming and growing problem: a volatile climate that is increasingly less conducive to growing.
After two consecutive years of underwhelming monsoon seasons, small-scale farmers in India — who depend heavily on rain because of limited irrigation — are reeling. As the climate continues to change, millions of farmers who rely on produce to feed themselves and make a living will need to find an alternative.
The co-founders of a hot new social enterprise believe they have that alternative. Kheyti — Hindi for farming — is a one-year-old startup based in Hyderabad that aims to turn India’s class of small-scale farmers into “smart” farmers. Founded by a team of two graduate students currently in the United States and three full-time staffers on the ground in India, Kheyti provides 2,500-square-foot, technologically based modular greenhouses for small-scale farmers at $280 a piece. Dubbed “Greenhouse in a Box,” farmers with 0.2 to two hectares of land may grow faster-producing crops like tomatoes and cucumbers in addition to the more traditional wheat and rice they grow on the rest of their land.
WINNING COMMONBOND’S SOCIAL IMPACT AWARD
Over the past six months, the Kheyti team has taken a smart approach to growing the venture. Half of the team is working with the product and farmers in India (currently growing cucumbers) while the graduate students pile up funding through grants and competitions. Since December, the team has scooped up more than $100,000 in grants and awards, most recently a $25,000 grant courtesy of Columbia University’s Tamer Fund Investment Board and a $10,000 win at CommonBond’s Social Impact Award.
CommonBond, a financial tech student loan-providing startup with a social twist of its own, has hosted a social impact startup competition for the past three years with a lofty goal. “The CommonBond Social Impact Award is meant to award $10,000 to the country’s top social entrepreneur,” David Klein, CommonBond CEO and co-founder tells We See Genius. This year three finalists were whittled down from more than 100 nominations to pitch Klein and a panel of judges at CommonBond’s New York offices, which are very much the epitome of a startup office — think beer-stuffed fridge, a massive open room with hardwood floors lined with scrambling 20- and 30-somethings in denim, and an over-worked Keurig.
Finalists spanned geographies and industries. From traffic safety issues in Uganda to refugee placement in New York City, Klein says choosing a winner was difficult. What elevated Kheyti, he says, was its go-to-market readiness.
“We want to be a leader in this social business space,” Klein says. “And as a leader you’ve got to lead and model the right behavior. You’ve also got to find next-generation talent to support. And that’s a lot of what the CommonBond social impact award is largely about.”
A ‘SMART’ PLAN TO FOREVER CHANGE FARMING IN RURAL INDIA
Klein and company can check that box. Despite its relative youth — no one on the team is older than 30 — experience is compensated by smarts. The team of five boasts a pair of Acumen fellows as well as current Northwestern Kellogg School of Management MBA candidate Saumya (who has only one name). Saumya and co-founder Kaushik K, a graduate student at Columbia University, have extensive vocational training experience. Meantime, co-founders Sathya Mokkapati and Ayush Sharma have already founded Cosmos Green, a farming production practices dissemination venture in India.
Traditionally, greenhouses in India have been massive and expensive. At $100,000 per 40,000-square-foot monstrosity, a greenhouse wasn’t anywhere close to a reality for the typical Indian farming family — the median annual income for an Indian farmer being around $290. “We decided this was a problem worth solving,” Saumya tells We See Genius. Kheyti has begun doing just that by leveraging internal research of “off-the-shelf” technologies to reduce costs.
With their low-cost, climate-controlled and automated “smart” greenhouses, they hope to forever end the days of farmers battling the elements in a do-or-die struggle to feed the family and sell enough to keep the farm going.
LEVERAGING B-SCHOOL RESOURCES
For Saumya, Kheyti is the extension of an entrepreneurial thirst and a couple of friendships. When funding was pulled from her previous startup, a vocational training venture in Bangalore called YellowLeaf Solutions, Saumya decided to pursue some formal entrepreneurial training. “I thought if I had more formal training in business in things like leadership, or even simply getting financial models better — all of those things I learned on the job (at YellowLeaf) in a structured environment — it would help also accessing a lot of resources,” she says.
About the same time Saumya started at Kellogg last fall, she spoke with Mokkapati and Kaushik K, who were researching “technologies at the bottom of the pyramid” as part of their Acumen fellowships. They had found about 200 companies around the world that were using technology to increase impact and scale. Focused on organic farming in India, the duo began looking into greenhouses.
Saumya was sold on the idea. But there was one potential problem. “I thought, if I start an agricultural company while in business school, I’m not sure what type of support I’d be getting,” she recalls.
It turns out, quite a lot. Saumya quickly met Mohanbir Sawhney, the McCormick Tribune professor of technology who also directs the Center for Research in Technology & Innovation at Kellogg. Sawhney didn’t just like the greenhouse idea — he awarded Saumya a fellowship to pursue it full-time during the summer between her first and second years. “This is all I’m going to do for the next two years while I’m here,” Saumya says.
PILOT TESTS PENDING
After completing her core courses, Saumya promptly enrolled in Kellogg’s New Venture Launch course and leveraged Kellogg’s resources even more. She’ll soon join the rest of the team in Hyderabad, where they have five farmers signed on for pilot tests. They’ve also established a partnership with a local bank that will loan 90% of the greenhouse cost for farmers. Meaning that, for $280, farmers can purchase the greenhouse and begin farming.
Kheyti plans to offer an “end-to-end” service that assists farmers in gaining necessary inputs — like seeds and fertilizers — and then connects them to buyers. Saumya says from years one to five, they expect farmers to earn about $40 a month while feeding their families and paying back the loan. At $480 a year, the potential dwarfs the annual national median rate of $280.
Once the debt is paid off after five years, Saumya says, farmers could make up to $100 a month.
And the market potential is massive. Of rural India’s 100 million farmers, Saumya says fewer than .05% currently have access to protected horticulture. Noting the economies of scale model, she says costs for the greenhouses will decrease as more farmers purchase them, and more will purchase them as a changing climate makes water even more scarce — the greenhouses are expected to use 80% to 90% less water than traditional farming.
If all goes according to plan, Saumya says, Kheyti hopes to have 1,000 farmers using their greenhouses by the end of 2016 — and a million by 2025.