efarm financial plan presentation. Audience : Investors, partners, entrepreneurs

1. eFarm : A Farmer To Consumer Agri Supply Chain Network
Part 3 : Investor Presentation : Financials and Growth Plans
May 2009
Presented by
Venky & Valli , Founders , eFarm

2. Cleaning / Packing
Business Potential Social Impact
Quality Routing
An untapped , niche
Inspection/ Grading
Organizing the large
market with very few Long haul unorganized agri sector of
organized, entities
Transportation
India – bottom of pyramid
Revenue generation More income to farmers ,
through better truck operators and small
optimization, value Rural Produce Local vendors
vendors owing to profit
addition across the chain Collection Centres Small retailers sharing across the
network
Reduced wastage in
transit = more revenue Farmers Support to traditional , eco
Urban area friendly farm practices ,
Has potential to jumpstart
Local
Distribution
Distribution centre
organic farming through
other agri-dependent better marketing
ventures
Convert waste to compost
A professional ly Compost/Manure Food Processing
, providing low cost
managed supply chain is from waste units manure back to farmers.
vital for tapping
international markets Bulk buyers Revival of agriculture
(Hotels / Caterers /
Retailers)
Exports dependent livelihoods ,
Potential to scale across empowering villagers
eFarm Common Services
India as core problem is
wide spread
Planning &
Coordination
Research
Call centre /
Communication
Technology
Training &
Support Under privileged/Disabled
and urban poor get
‘Pull factor’ from rural employment opportunities
India for other services
and products

3.  Often large organizations fail in rapid
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 eFarm would expand in a sustained
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controlled manner as shown
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 Create 1 fully functional, fully
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sustainable unit (eg could be a collection
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centre , or a distribution centre or even a
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store)
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 Replicate the successful model into two
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 Ensure continued viability of this
expanded unit
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Continue to ‘divide and expand’
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In case of any issues, we only need to
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
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xt take one step back to prior state and
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rebuild
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 At a given time, number of units would
be a measure of 2n where n is time taken
1 -> 2 -> 4 -> 8 -> 16 to replicate 1 step
…

4.  Farmer liasion : Government agencies , Agri
institutions , NGOs
 Incubation : ICRISAT / TNAU
 NGOs : RASA , Nandini Voice of Deprived, Exnora ,
Nivedita
 Agri parks/Exports : IFFCO Kisan SEZ
 Software :Microsoft (Bizspark startup program
member)
 Mobile gateway : SMSIntegra
 Micro finance for eFarm entrepreneurs : Equitas,
Indian bank
 Funding : Leading Social VCs, PSBs

5.  Financial Indicators
 Revenue generation from Day 1 , Profit from Year 3
 Sustained scalable model , with organic growth across
locations
 Leadership position across market channels
 Social indicators
 Increase in income to farmers, truck operators, small
vendors
 Reduction in farmer suicides
 Increase in land under cultivation
 New Job creation in rural & urban areas
 Reduction in Migration to city from rural areas

6. Please see attached Excel spreadsheet for balance sheet, sales
projections , funding summary , financial ratios etc.,
Sales , Profit Projections
3500
3000
2500
2000
1500 Sales
1000 Net profit before tax
500
0
-500
Year 1
Year 2
Year 3 ** At end of 3 years
Figures in Rupees Lakhs

7. eFarm Please see spreadsheet for details
Year End Summary
Extended Projections till 6 years
Year One Year Two Year Three Year Four Year Five Year Six
Total Income 34,670,240 144,619,610 341,211,415 474,684,655 654,096,624 898,045,331
Total Cost of Sales 26,520,365 94,373,762 191,751,691 259,230,666 284,621,978 312,525,834
Gross Margin 8,149,875 50,245,848 149,459,724 215,453,988 369,474,646 585,519,498
Total Salary and Wages 9,213,000 18,426,000 36,852,000 63,417,200 69,758,920 76,734,812
Total Fixed Business Expenses 29,654,050 44,481,075 55,601,344 78,235,758 86,059,334 94,665,267
Total Other Expenses 1,259,594 1,254,136 - - - -
Net Income
(Before Tax) (31,976,769) (13,915,363) 57,006,380 73,801,031 213,656,392 414,119,419

8. ROI / IRR : A Sample scenario
 Initial investment : 500,000 $ (approx 2.25 Cr)
 Term : 6 years , Equity : 3%
 Valuation : 108 Million USD
 NPV : 2,180,000 $ IRR : 67%
 Final payout : 3,240,000 $
 Reference :
http://www.bplans.com/business_calculators/investoroffering.cfm
 http://younoodle.com/predictor

9.  Sale of Agri Produce
 Wholesale / Bulk buyers transactions
 Retail (eFarm ‘powered’ shops run by entrepreneurs)
 Premium products – Organic , Export quality items
 Third party logistics and distribution
 Processed food products
 Waste conversion – Compost / Value add products
 Consulting (Supply chain , System integration)
 Registrations in B2B portal
 Ads ( Push carts , Vending stations , Website)
Note : A small set of fully owned demo outlets of eFarm are primarily for marketing, training and
operational studies. These would comprise of low cost outlets , push carts, street side vending
stalls,tricycles etc., These would be fully staffed by efarm directly.

10.  The truck , being the main mode of deliveries
, represents the fundamental unit of volume ,
utilization & growth indicator
 Based on trials and metropolitan traffic
regulations , a 4 tonne truck has been
identified as a standard, viable, long haul unit
which can freely come within city at all times.
 All figures are tied to “How many truckloads
of produce” is being transacted

11.  Primary revenue is through produce sale, and commissions
on truck loads transacted.
 The produce is sold across different marketing channels –
bulk/whole sale , retail , premium segments
 A truckload is assumed to be operating at 75% utilization at
peak.
 An average blend rate of Rs 15/kg is taken as sale price and
Rs 10/kg as purchase price of goods.
 Wastage in transit & handling is assumed at 5% . This is
lower than current industry avg. of 40% as we would be
deploying better practices & demand prediction.
 As all price points are expected to stabilise over time to a
predictable flat model , operating margins are achievable
 Net Profit margins would be at 20%

12. Portal Registrations, eFarm portal allows users to interact and trade . Registration would be
Ad revenues fee based. Transactions executed using eFarm logistics are charged.
Advertisements placed in our website , shops , trucks are also on fee
basis.
Assumption : Fees range from Rs 300 – Rs 3000 based on nature os
registrant. Transaction fees would be 2% of value of goods.
Franchisee fees All eFarm operations are primarily run by trained entrepreneurs as
franchised operations . This outsourced model offers better flexibility,
competition and scalability. The franchisee fees would cover initial
training , support & setup fees.
Assumption : 1 % of annual turnover
Consulting Advisory/technology implementation projects to agri industries ,
institutions, high end customers, entrepreneurs etc., Consulting
charges would be on per-diem/time & materials basis.
Manure/Compost/ Revenue from waste can be created by converting it to manure or using
Products from agri byproducts to extract other value items (such as mango oil from kernel)
waste

13. Sourcing Set up standardized collection centers in rural areas, pre-processing
centers, quality control , training of personnel and Outreach sessions
Distribution Set up standardized distribution centers within urban area, Training and
developing logistics and transportation network, setting up marketing
channels across metro areas , sorting/grading/packing/labelling and
special storage facilities , build franchisee /entrepreneur network
Sales and Set up model outlets & vending stations, media campaigns, training
Marketing videos/material, market research
Technology Software, hardware, hosting, portal development, backend ERP system
development, MIS
R&D Demand/Supply data and price line study , In-transit storage
mechanisms, waste reduction and composting, food processing etc
HR Employee salaries & benefits , External consultants
Miscellaneo Company registration, trade marks & licenses , IPR , Travel etc.,
us

14. Apr-09
Nellore Agri SEZ ,
Indian delegation member Jun-09
First eFarm powered store at
Feb-08 May 08 Dec-08
Neelangarai
Concept Initiation Portal launched TePP Grant from Govt
Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09
Jan-08 Sep-09
Jul 08 Mar-09 May-09
Live Trials begin Launched Organic Sales Press coverage :
Hindu, TOI, NDTV

15. Current/ Completed pilot phase studies, market studies for demand/supply prediction, Identified top 20
Completed vegetables/fruits and buying patterns, Set up pilot distribution centre in Mylapore, Chennai ,
(Mar 09) Setup model pushcarts/mobile vans, Setup separate unit for handling Organic produce
sourcing & distribution, Setup website , Identified pilot group of suppliers, transporters &
customers , Running operations and revenues
Short term Seek funding/investors, Setup first model collection centre, Build street sales force, Setup low-
(By Jul 09) cost POS vending stations, Build core functionality of B2B portal, Setup call centre operations
, Setup mobile/SMS interfaces, Develop Training material
Mid term Expand franchised shops network, Marketing campaigns/promotions, Setup food processing
(By Dec 09) pilot, Initiate pilots in Tier II cities, Expand sourcing to include neighboring states, Enhance
portal for third party integration, Pilot usage of third party warehouses/cold storage
Expand to 1 more metro area in S.India (TBD) , Export grade sourcing, Expand portal for data
(By Dec 10) analysis & trends, Integrate third party storage (wet/dry), Supply to branded retail chains,
Reverse logistics of farm supplies, manure, compost to villages
Long term Setup pilots in other major metros in India, Cross-border / Inter state supply chains,
(By Dec 11)

16.  Year 1 : Rs 3.1 crores (~ 690K USD)
 Year 2 : Rs 1.3 crores ( ~ 290 K USD)
 Year 3 : None ( Will be generating profit)
 Utilisation of funds :

17. • Focused in India and Rural centric/ Social sectors
• Domain knowledge in (one or more of) agriculture, supply chain, retailing
, food processing , technology , exports
• Bring in Industry and government networking
• Ability to sustain and stay invested to mid/long term (at least 3 to 6
years)
• Exit in phased , mutually agreeable manner . Open to exit through buy
back arrangements , entry of larger investors , corporate investments etc.,

18. Venky
venky@matchboxsolutions.in
Valli
srivalli@matchboxsolutions.in