Rituraj Sharma, Zetta Farms: Scaling process-oriented and technology-driven corporate farming and agriculture investments

And we are live. Another CEO Wisdom Pod here today. With us is Rituraj Sharma. He is CEO and founder at Zetta Farms. Quite an quite an articulated guy. Plus I really love his company. He's into agritech, so that's what we're going to talk about today. Fascinating segment because he told me oddly enough that yeah, that was one of the most profitable business he's seen and that comes from a guy that was into um various startups in the past plus has background in technology and so forth.

Really eager to get into that. Before we do this podcast brought to you by podpar.com if you want to start scale, be invited to a podcast to get great guests like Ritu to talk with them, get insights, get subscribers, get leads, get clients, start a podcast with podpar.com. Ritu, I'm really glad to have you on. Can you tell us about Zetta Farms? Yeah, sure.

Sure. Thanks for having me here, Charles. So, let me start with Zetta Farms first. What does Zetta mean? Zetta is like we wanted to show the world the power of 10 to the power 21. 10 to the power 21 is like Zetta. And at Zetta Farms, what we are trying to do there is we are creating process-oriented and technology-driven farm projects. Okay. This is the first statement.

The second they are well secured by way of diversification because uh weather and market prices were the two things which nobody could control in the agriculture industry. So, these Zetta Farm projects are spread across various geographies and different kind of crops are being grown over these these at these different Zetta Farms. Why we are doing that?

Because on certain day at a certain location if the weather is not favorable for the crop, even then we can make money by the crop which are growing which is being grown at a different geographical location. This is all about Zetta Farms. Now, where is the technology and the things is being involved evolved here and involved here is because the way which I have told is is is normal farming like everybody does the same way.

Okay. So, what we have incorporated it in a very technological way was technology was an enabler for us for getting the right kind of tracking and monitoring that what is happening at the farms. Being a company, being as a company we wanted to know that when we are having my farms located in different locations, I want to know that what is happening at my what farm, what kind of people are being involved there, what crop is being grown, at what stage that crop is, was the irrigation given to the farms, was the fertigation given to the farms at the right time or the crop at the right time.

We have deployed those technologies. We have also noticed one thing that most of the agritech starters were trying to create a product or service for the farmers. Wherein we have a different mindset, we have a different thought process behind it. That if when we are into the production, we can make more money, why should we not become the farmers ourselves?

Okay. We should think it in a very corporate way and we can become a corporate farmer. Okay. So, we are working in a very corporate way deploying all the SOPs and all and using the tech and services which was created by these startups in our business. So, it is creating a win-win model that the other startups and the companies are also getting opportunities to showcase their products and service.

We are also giving opportunities to the people in the farming community by giving them assured income in the format of a job opportunity or something. We have already created that thing. So, they are also now mentally sorted there and in a very well uh you can say uh unique way we have involved retail investors to uh become passive farmers with us. We have created a pool fund wherein all the retail investors, even people, uh, like all across the world, are investing with us.

We are pooling that fund to create these Zeta farm projects. Now, this fund is secured by way of diversification. Uh, as the way a hedge fund or a mutual fund works, okay? So, the same way we have created a mutual fund of agri projects. These projects are situated in different locations, that's why the fund is secured. So, you can see from the way I have which I have told that all the stakeholders who are involved, the investors, the farmers, the land owners, and the startup, they're the whole ecosystem is being secured the way which we are doing farming.

That's how this is all about Zeta farm. This is how we are doing it. Yeah, it's a beautiful model and vision in reality, but it's be quite messy to implement all of that. So, how do you make it concrete in reality and how do you fix the the problem and the chaos that emerge from trying to accomplish a beautiful vision like that? Correct. So, it's I really agree with you that it's operational heavy business also because being in farming it involves like lot of labor, lot of machinery, and day-to-day, like ad hoc task there, which which comes and they with the weather changes and all.

So, as I've already told that we are making use of technology and the right kind of, uh, information metrics for us, okay? So, we keep track of all kind of things on daily basis. Why a small traditional farmer gets a win in terms of the operational know-how and the operational control because he daily visits his farm, right? The same way we have incorporated in our farm projects also.

We are daily visiting our farms through technology. We have our eyes, we have our legs through farmers, we have our eyes through technology, we have IoT sensors deployed over farm, we have drone mapping. We have like sprays done through drones and all. Everything is being controlled through the technology. It's a well-knitted thing. Right. So, you have eyes, you have data.

You can control that from dashboards. Correct. You mentioned that that was one of the most profitable business. I'm I'm curious to learn why do you think there's such a an opportunity in a business that hasn't changed in like centuries. One of the oldest business out there. Not necessarily one of in which there's the most competition cuz not a lot of people want to become farmer.

But in India, I'm I'm guessing India's probably yeah, in some places depending on the geography 10 15 years behind uh the world's like I'm I'm guessing. And plus India's growing, right? The people need tons of food. So, what trends are you taking to claim that this is one of the most uh profitable industry that there is? So, by way of industry, it all depends on like every business can be profitable if you know the root level that how the uh base profitability has can be generated.

So, the good part in agriculture is the base profitability can be easily generated at the crop level. Okay. So, each crop gives an average margin of around like 50 to 60% there. Now, it all depends upon the logistic, the supply, when we do the grading, sorting, or the packaging part of it. It it curves down some some certain margins. But, the good part in agriculture is when we do it at a scale, everything becomes assorted.

It gives the normal curve there. It gives is like normalizes the thing there. Normalizes the risk of the fluctuations and all. Everything gets normalized at the scale there. So, in India also, uh India being an agrarian economy, people have agri lands. People are doing agriculture, but it's very much fragmented. Okay. A normal traditional farmer holds less than 1 hectare of land area with him.

Okay. So, it is really low. Okay. So, he needs to have or he needs to bear the risk of all the changes and all. Where in our case, what we do is we aggregate all these farmers and the land areas with them and along with the HNI land areas which we have, okay, and create big scale projects over over it. Now, these big scale projects are also diversified in nature.

To just to give you an scale, it's like you can say uh 5 billion hectares of land area is there in India, okay, over which if diversified agriculture is done or you can say in a single statement I could say the agriculture ecosystem of the globe cannot be failed in a single day, okay. So, even if like we are getting floods in India, China will be eating food.

China will can provide food to everyone. US can provide food to India everyone, okay. So, there are like wheat growing in Russia, there is like multiple fruits and nuts growing in Argentina, Canada, like all the locations are related, but it the weather changes or the uh you can say the unfavorable weather condition will not be same in every location.

That we are making use of that and that's the good part in our business. With a scale, we'll be making money and making profits out of it and the average distribution of the profit margin can be taken care of through this model. The investment um bar is really low. It's 50 USD cuz that's 5K Indian rupees um which is quite Great. Great. interesting. According to what you're claiming, that should be one of the lowest hanging fruit.

I mean, I still need to wait 36 months to have that estimated return on my investment. But that's quite impressive and you know, agriculture, it's been one of the first commodities on the stock market nowadays. So, my brain is telling me you're either trying to create, you know, you're putting VC into uh farming and agritech and or trying to recreate a more version of a more agile and more verse versatile version of the stock market for agree culture.

What Am I Am I getting somewhere here? It's a hybrid. Yeah, it's a hybrid thing. Okay, so we are not creating a true VC here, but a retail investor is getting a feel that he's becoming a VC in agriculture. Okay, so they are not true VCs because you can see the ticket size is really low. You can understand that. Right? Now, it is not also a stock market thing because we are promising the fixed returns out of it.

So it's like a fixed deposit. Okay. Another good part is just to like from the perspective of the proposition of the investment nobody needs to wait for 36 months. It's like the payouts are given every quarter. Okay. So it means the IRR increases plus also certain kind of liquidity benefits are being passed on to the investors who are associated with it.

Okay. So it means till the time the fund is there with us the person can earn money every quarter. Because on an average agriculture cycle in the format of like the crops and all is of 3 months. So that's why we pay every 3 months. That's That's how the quarters are being formed. That's how we do it. That's why it is it is it can be treated as an innovative model.

Yeah, I see like a future stock market in which like you would be part of me as an investor, you know, a non-standard investment strategy. And you know, like and also it's very low level and I think that's pretty cool because it gives the opportunity to folks to try to experiment and try making bets until they become very good with that. Um You're in India right now.

Like do you want to expand because I know your investor base is is out there, but like will you be uh taking terrains out there and promoting other markets? Why the focus on India? Yeah, yeah, we will definitely be going outside outside India also. We are already getting certain projects or you can say farm projects in in some African countries and also in South Asian countries there.

And uh we have already uh on the verge of closing one of the linen projects in uh in Belgium also in Europe, okay? So, this is about the farm project. But about the investment, we are already getting certain investments from Indians and NRIs who are living outside India. We can soon open FDI or you can say funds from foreign investors as well because in India agriculture FDI is allowed like FDI investments are allowed in agriculture in a in a true sense.

That's why. We will definitely be we are definitely open for that and we are working around it. What are your goals for the remaining of this year as this year So, uh we are trying to have our agriculture or you can say the projects expanded over to approximately 25,000 acres of land area, okay? With uh uh you can say the turnover of around uh 60 million dollars there with a profit margin at the net net level of 25% after giving like all the payouts, returns, and everything there.

Love it, man. That's quite ambitious. Where can people find out more about you, Rituraj? Uh yeah, you can you can like check me out over LinkedIn and you can like definitely like we can definitely connect and have like a detailed discussion over this part also. So, that is Rituraj Sharma on LinkedIn. Uh we have gropital.com here. Like gropital.com and zettafarms.com.

zettafarms.com, there you go. And I'm your host, Charles Cormier. That was another CEO Wisdom podcast, agritech edition. I was really glad to have Rituraj on. It's an exciting uh project right there. If you want to start your podcast, scale one or be invited to one, that is podpir.com, which is my company. Good job, everybody.