IRIS

Solving India’s Fragmented Food Supply Chain Connecting Farmers with Businesses
August 2019

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Agriculture - the Backbone of India’s Economy and the Largest Source of
Livelihood Continues to be Plagued by Severe Inefficiencies…
While the Indian Food Market is Incredibly Large… … It Faces Serious Bottlenecks due to Multiple Structural Complexities

1  Ineffective MSPs resulting in limited price transparency

Poor Visibility into
~60% 7.7% Pricing and Demand  Unpredicted demand, price volatility and post-harvest losses
impacting farmers earnings

India’s population dependant India’s agro economy 2 Uneven Distribution of Procurement System
Distance between Farmlands and Mandis (km)
on agriculture for livelihood contribution to the world’s 60 50+
total agricultural output Limited Reach of 40
Mandis 20 12
5
0
Ideal Distance Average Distance in Average Distance in the
17.9% 157mm India North East
3 Too Many
 Usually farm produce changes hands 5 times between farmers and
Agriculture contribution to hectares agriculture land – Intermediaries and
retailers resulting in 250%+ cost inflation
Information
India’s GDP India has 2nd largest arable Asymmetry  Massive information asymmetry leading to incorrect crop planning
land in the world
4 35mm  Estimated Gap between agri-warehousing supply and
MT demand
Inadequate
 India’s cold storage capacity is barely sufficient for
Infrastructure for 10% 10% of fruits and vegetables produced
Storage
US$ 180bn TAM growing at 9% annually 40%  Food wastage due to inefficient supply chain

Huge potential to unlock efficiencies in Indian agri-supply chain, reducing inefficiencies, increasing farmer realization and curbing food
wastage
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…However, it is on the Cusp of Transformation by Technology Enabling a New
Green Revolution
…Enabling Organizations to Leverage Technology to Positively Disrupt
Rising Digital Adoption and Government Focus…
the Traditional Farming Sector

Tech based applications in Indian agri-

sector to have an economic impact of
On-demand farm
 India home to 500mm internet users
input delivery

US $45-80bn annually in 2025

 Increasing penetration of budget smartphones, affordable
Digital
access to high-speed internet, and the growing regional online
Adoption App based financial E-commerce and
content are helping companies with direct access to farmers
services Market linkage
 Digital payment infrastructure facilitating direct payments

Smart machine and

 Initiatives to double farmers income by 2022 Weather prediction
equipment rental
Increasing
 AGRI UDAAN – dedicated agri-tech infrastructure fund
Government
Focus  AGRICULTURE GRAND CHALLENGE – first-of-its-kind program Soil health
to solve 12 key issues in Indian farm sector Crop protection
enhancement

Increasing Investor Interest in the Indian Agritech Space

Investment in the Indian Agritech sector(1)
# Deals 16 20 41 44 43 25
800 648
Funding Amount
(US$ mm)

600 465
400
200 80 106
12 24
0
2014 2015 2016 2017 2018 2019 (YTD)

Time is perfect for Indian agriculture sector to be disrupted by technology and unravel significant treasuries
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1. Source: Tracxn
IRIS Created a Tech Enabled Sustainable Business Model Connecting Farmers
Directly with Retailers…
 Traditional Fresh Produce Supply Chain Cycle

Farmers Retailers

Aggregators Mandis Processors Last-mile

Distributors

 IRIS Supply Chain: Singular Pipeline Avoiding Multiple Steps

IRIS
Farmers Retailers

Collection Fulfillment Distribution

Centers Center Centers

IRIS India centric and tech enabled solutions disrupting the way food grains move bridging the supply chain gap between farmers, retailers
and consumers
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…Powered by a Well Refined and Made-for-India Logistics Platform…

IRIS sophisticated software algorithms, end to end meticulous planning combined with grass root level innovations enabled cost efficient
and tighter supply chain operations

First Mile Planning and Forecasting Non Last Mile Delivery Last Mile Delivery

1 week 6 am 6 pm 9 pm 11 pm 1 am 3 am By 8:30 am

Collection Fulfilment Distribution

Planning and Forecasting Retailers
Centers Center Centers
 Access to farmers harvest calendar gives an  Farmers drop produce at  Merchandise undergoes  Batches the produce according to retailers
overview of food grains supply in each season CCs second check on requirements
randomized basis
 Weekly forecast of SKU level demand  Tested for quality, weighed  Tamper proof tags and RFIDs facilitate unmanned
leveraging historical demand data and market and tagged  Produce from different deliveries
conditions CCs aggregated and
 Messages go through app subsequently batched to  Delivery vehicles procced in the optimized route
 Farmers are notified a week in advance about to farmers on the supplied DCs without waiting for crates to be emptied –
the demand prediction and kept informed quantity and price enables delivery completion to ~2,250 retailers
about the expected purchases by 8:30 am
 Amount credited to the
 Pre-education on the desired quality of farmer’s bank account  Empty crates collected on the way back
produce directly the next day

12 hours from 36 hours cycle from the time produce Delivery accuracy of 99.88% Wastage and pilferage losses
collected from farmers, reaches retailers all year-round limited to 4% of sales
farm to stores
and the empty crates goes back to CCs
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…And a Proprietary Technology Solution Harnessing Full Value through the
Supply Chain…
 Extremely scalable and flexible technology platform that can be feasibly
implemented for both larger metros and tier-I/II towns

 Massive amounts of data around 40 different markets in terms of arrivals, supply, price etc.
 Accurate prediction of demand and production output leveraging data & predictive models
 80+ parameters employed for SKU level price determination

 Best-in-class routing algorithms mapping the optimized delivery routes for drives
 Day to day optimized delivery routes for 500+ vehicles

 Fully automated supply chain enabling adequate safeguards against pilferage and other
wastages
 100% traceability of produce - merchandise tracked at every step of the way

 Innovations at every stage creating immense value at scale

 Faster loading and unloading of trucks through innovations such as Dolleys

Entire technology / data stack is built in-house and visualised for Indian market conditions
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…Creating Strong Value Proposition to all Stakeholders Across the Value Chain…

A• Farmers: ~20% Improvement in Price Realization B• Retailers: 5-10% Improvement in Retailers’ Cost Price
 Provides an efficient price discovery platform to  Competitive prices through # Retailers Ordering from IRIS
farmers direct sourcing from farmers 2,248
Retailers
 One stop sale for all produce  Convenience through
doorstep delivery
 Transparent weighing & pricing 391

v
 High quality graded products
 Direct payment to bank accounts in 24 hours
 Supports planning, sales and Apr-17 Mar-18
 Education about best farming practices in terms warehousing operations
of seed / fertilizer selection, crop planning etc. through technology enabled # Tonnes Sold Per Day
solutions 157
# Farmers Partnered with IRIS Farmers  Saves time from daily 61
morning trips to Mandis
5,000
IRIS Apr-17 Mar-18

C• Consumers: Quality Fresh Produce at Lower Prices

 Hygienically handled – one touch handling method

500
Consumers  100% traceable to farms – improves food safety

Apr-17 Mar-18  Better quality of produce

 Lower prices by removing layers of middlemen

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...Building the Fastest Growing B2B Fresh Produce Supply Chain Company in India

STRONG RETAILER ADDITIONS WITH CONSISTENT RETENTION RATES

TRANSLATING INTO NON LINEAR GROWTH AND IMPROVING MARGINS
# Retailers Ordering From IRIS # Tonnes Delivered / Day Gross Margins
(% of Revenue) 28%
2,500 180 100%
160
90%
2,000 140
80%
120 17%
1,500 2.6x 70%
100
5.7x Growth 12%
Growth 80 60% 11%
1,000
60
50%
500 40
40%
20
- - 30%
Mar-18

Mar-18
Apr-17

Apr-17
Aug-17

Oct-17

Oct-17
Jul-17

Jul-17
Jun-17

Jan-18

Jun-17

Aug-17

Jan-18
May-17

Dec-17

May-17

Dec-17
Sep-17

Nov-17

Feb-18

Sep-17

Nov-17

Feb-18
Q1FY18 Q2FY18 Q3FY18 Q4FY18

# Tonnes Delivered / Tonnes Ordered by

Day Existing Retailers (%)

3 Cities Launched US$ 9 MM ARR 45% Retailer 12 month Retention

3 SKUs (Wheat, Rice and 5000 Farmers ~US$ 38 MM Revenue Forced Churn Accounts for ~80% of
Maize) Projection Next FY Lost Retailers
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 More Retailers, More Orders, Cost Efficient Operations – Powerful Unit
Economics
Unit Economics Avg. (US$) Q4FY18A Q4FY21E
Unit Economics per Tonne Organic Triggers for Net Contribution Expansion
Sales Revenue 154 166 A
Delivery Revenue 5 6 Gross profit expansion as procurement turns cost efficient with
Total Revenue 159 172 increase in scale and geographic expansion
A COGS 114 97
Gross Profit 44 75
B
% Margin 28% 44%
Increase in order density and further sophistication of routing
Less: Wastage & other Losses 4 2
algorithms to reduce logistics costs
B Less: Non-Last Mile Logistics Expenses 16 11
Less: Last Mile Logistics Expenses 10 8
C
Less: Collection Centre Expenses 1 0  Warehouses are currently underutilized operating at ~20% capacity
C Less: Distribution Centre Expenses 3 1
 ~800 tonnes can be delivered per day without adding any
Less: Fulfillment Centre Expenses 2 0 incremental collection centre
D Less: Labour Expenses 16 8
Net Contribution per Tonne (8) 44 D
Retailer Level Monthly Unit Economics Ongoing R&D investment to optimize and automate warehouse
# Retailers Ordering 1,758 39,272 operations to reduce labour expenses
E
# Orders / Retailer / Month 16 25
# Tonnes / Order 0.13 0.13
E
Total # Tonnes Delievered / Retailer 2 3
Strong engagement with retailers and superior customer service to
Net Contribution per Tonne (8) 44
enable increase in order frequency to 25 times / month
Net Contribution per Retailer (15) 147

Expansion into new geographies and adjacent SKUs with robust retailer addition to create immense operating leverage in the business
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Key Management and Investors – Building IRIS Together for 4+ Years

Clear Vision Rich Experience Integrity Striving for Excellence

Name | Co-founder Name | Co-founder Name | Co-founder

Led by Previous Experience Previous Experience Previous Experience
Experienced
Management Education Education Education

Team

Investor 1 Investor 2 Investor 3 Investor 4

Supported by Blue
Chip Investors
Investor 5 Investor 6 Investor 7 Investor 8

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IRIS: On a Mission to Create the Largest and Innovative B2B Food Supply Chain
Company in India
While IRIS is solving some of the toughest problems in Indian agri supply chain by addressing information asymmetry and distribution
inefficiencies, the business model is exposed to few limitations

Key Positives Certain Limitations

• Large and growing market opportunity with US$180bn TAM but highly  Business subjected to seasonality considering the harvest calendar,
fragmented and unorganized volatile market conditions and government driven MSPs

• Technology first business model, sophisticated algorithms and usage of
data science for demand / price predictions creates powerful economic
impact and superior customer service
• Retailers addition creates significant non-linear growth in the business
 High risk of wastage during unpredicted weather conditions
 Branching into new markets is challenging owing to strong local
relationships of middlemen and unique dynamics of different micro
markets

• Well curated supply chain and logistics framework with in-depth  Delivery of short-shelf items such as frozen foods and dairy products is
ground level understanding enables faster scaling across geographies / constrained given the inefficient storage and infrastructure facilities
SKUs

• In-house built end-to-end tech stack provides flexibility to operate in

both larger metros and smaller tier-I/II towns seamlessly

• Scale expansion enables tremendous operating leveraging leading to

industry leading unit economics

• Created a powerful ecosystem by delivering great value proposition to

all the stakeholders – farmers, retailers and consumers
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