SaaS Interviews with CEOs, Startups, Founders
1710 Crop Optimization Software Hits $2.4m in ARR, $12m Raised
30 Mar 2020
Chapter 1: How is technology transforming the agriculture sector?
He's now helping farmers be more productive, serving about 185 companies that manage millions and millions of farmers. He's doing about $200,000 per month right now, or $2.4 million run rate. Just raised an $8 million round, 12 million bucks in the company to date, 150 people in Bangalore and other remote locations, 1% revenue churn per month. They make that back up with expansion.
So north of 100% net revenue retention each year, spending five grand to get a new company like McCain. Again, that's managing all these farmers with an eight month payback period. Hello, everyone. My guest today is Krishna Kumar. He's the founder and CEO of Croppen Technology Solutions. He's made it possible to enable data-driven farming by connecting all the stakeholders in the agri ecosystem.
Croppen is a leading global full-stack ag tech organization that provides SaaS solutions, thus enabling businesses to utilize technology to effectively drive their initiatives around digitization, predictability, risk management, compliance, sustainability, and traceability. All right, Krishna, are you ready to take us to the top? Sure. All right. Very good.
So tell us specifically what the company does and what's your revenue model. How do you make money?
Yeah. So, you know, Dropin is a full stack active company and we work with B2B. We are a SaaS B2B company and we work with all the businesses who are interacting with the farmer for their business. For example, we work with companies who are into farm production like McCain, ITC, Philip Morris, Syngenta.
We also work the input side of the businesses who are trying to sell chemicals and fertilizers to the farmer where they want to manage the farmer from the advisory perspective and also from managing the retailers and dealers point of view. So one side we are managing, helping the companies to help them to grow better with less input, providing all kinds of advisory support to the farmer.
At the same time, we're also helping input companies to educate the farmer how to use their inputs in a better way. The third piece is we also work with the banks and NBFCs and insurance companies to underwrite their product because lately what we saw in 2015 that we are sitting on a huge amount of data. It was a critical mass of data. It was like close to 88 terabytes of data.
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Chapter 2: What is CropIn Technology Solutions and its business model?
We thought, how can we learn from this data and give back the insight back to the customer and also to their farmers? And we built a lot of machine learning AI-based capability to provide this insight in real time to the customer to make sense of it and also help the farmer to grow better.
So who's your actual customer? Who's paying for the technology? I think it's businesses who are paying for the technology. The farmer or what kind of business?
No, so the customers who are engaging the businesses are paying for the money. For example, if you look at McCain, McCain does potato growing for their chips making. They engage in the background, a lot of farmers to grow the potato. So, but the company will pay to us, but they will use our platform to manage their 100,000 growers in different countries. I see.
Yeah. I see. Okay, very good. So McCain, you've also got like Sayadri Farms, these kinds of companies. Correct. Correct. Yeah. Okay. Very good. And then what do they pay on average for this per month? I'm sure you have a lot of cohorts, but on average, what would you put it at?
So if you look at our international, international customers pay us on an average, uh, uh, you know, $50,000, some customers have a hundred K, 200 K, uh, dollars also.
You said $50,000 per year.
Per year on an average, if I, you know, divide the international businesses by the revenue. And if you look at Indian businesses, they are somewhere around $13,000 on an average. But again, there are customers who are at the enterprise level paying more than that.
Okay. When you look at if you put your income, including domestic and foreign altogether, though, it sounds like the average might be around $15,000, $16,000, $17,000 per year, something like that.
You can say that.
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Chapter 3: Who are the primary customers of CropIn and what do they pay?
So they're almost on the verge of closure.
Okay. So you're currently, as a whole company right now, doing 2.4 million bucks a year. You're saying, with almost complete confidence I'm watching your face, you've got contracts where there's going to be a million dollars that they are wiring into your bank account in the next two months.
So more than 50% of your whole business size today is going to come in from one new customer in the next two months.
No, a couple of customers. So there are five, six customers we are talking to. Two, three customers will convert. And the ticket size are going to be north of a million dollars.
How have you been able to, so your current ticket size with 185 customers at the run rate you just told me would be, I don't know, what is that? 200 grand per month divided by 185? They're paying about a grand per month or 12 grand per year. How did you go from these contracts averaging 12 grand per year to ones that are gonna be 700, 800 grand per year? I mean, that's a math.
In other words, if I was a company talking to you about to sign a million dollar deal with you, my first question would be, introduce me to two other customers that are this size. You would have no one to introduce them to because everyone else is paying 12 grand a year.
No, so as I mentioned, there's a mix of customers. There are customers who are paying 300K as well as an error, I mean, on the yearly basis. And there's a plan to be expanding with them in the multiple countries as well as while we are talking to them. So they talk to the world of Syngenta. Syngenta is a multi-million dollar company. They are using our product in 20 countries.
Now, when we are talking about million dollar clients, because we are talking about a multi-country implementation, while they talk to Syngenta and other Philip Morris, who has been our customer. So there are already large MNCs who are working with us, scaling up with us, and that gives the confidence to other companies to also sign up that scale of product.
So it sounds like you have serious kind of power laws happening here. True or false, if you take your highest paying three customers, they make up more than 30% of your total revenue.
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Chapter 4: What challenges did CropIn face when launching?
So a customer comes with $10,000 in three months, they expand to 100K because they've proven the product in one location. They take it to 20 locations because with their learnings and expansion.
Okay, but that's not happening across your entire base because you told me over a year. Yeah, so I'm not looking for your best case scenario. I'm saying that cohort, right? If it's turning 1% revenue per month, on average, what's that cohort adding back per month? Is it more than 1%?
I need to check the numbers on this one. But I think, yeah, I mean, we are expanding with the customer.
Do you know your net revenue retention? What do you mean by net revenue? Net revenue retention means you look at people that signed up a year ago, you subtract out churned revenue, then you add back expansion revenue. If expansion is more than churn, then you have more than 100% net revenue retention.
I think we are at that.
Okay, but you don't know. I'm a little surprised you just raised $8 million. These things usually come up in those kinds of conversations. Were there no conversations about these kinds of numbers?
So basically, we talked about the churn, the number of churns in terms of the value pack. We do talk about all these numbers, but I think our retention, so as I said, if our churn is like 1% of the value churn.
What do you mean by value churn?
So if I have a 100K customers, even if there are four customers churned, the value churned will be 1% of the 100K.
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Chapter 5: How does CropIn utilize data for farming insights?
26. Last question. What do you wish your... 36. 36. Okay. What do you wish your 20-year-old self knew?
Can you repeat the question, please? Sure.
What do you wish your 20-year-old self knew? I didn't get you. Sorry. What do you wish your 20-year-old self knew? 20-year-old self knew. Sorry. When you were 20, what's something you wish you knew?
Oh. That, you know, there's a world... world beyond engineering. Because India, mostly, either they want to become an IS officer or engineers.
So sorry, I didn't catch the lesson there. What do you wish you knew when you were 20?
So there's a world beyond the engineering. Got it.
Guys, get outside of engineering. There's a world beyond it. Coming from GE, he's now helping farmers be more productive, serving about 185 companies that manage millions and millions of farmers. He's doing about $200,000 per month right now, or $2.4 million run rate. Just raised an $8 million, around 12 million bucks in the company to date. 150 people in Bangalore and other remote locations.
1% revenue churn per month. They make that back up with expansion. So north of 100% net revenue retention each year. Spending five grand to get a new company like McCain. Again, that's managing all these farmers with an eight-month payback period. So healthy economics there, Krishna. Thanks for taking us to the top.
Thank you. Thank you, Nathan.
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