In the fiscal year ending March 2023, Agritech platform Ergos demonstrated substantial growth, expanding its scale by two-thirds while maintaining prudent financial management. According to the company’s annual financial statements for FY23 filed with the Registrar of Companies, Ergos achieved a remarkable 66% growth in gross revenue, reaching Rs 224 crore compared to Rs 135 crore in FY22.
Ergos specializes in empowering farmers to convert their grains into tradable assets, access credit against stored produce, and enhance their yields. The platform also offers harvest supply chain solutions through the strategic use of technology.
The primary source of revenue for Ergos stems from the sale of commodities to customers, contributing to 96% of the overall operating income. Wheat emerged as the largest revenue driver, followed by maize, paddy, and other crops. Additionally, warehousing management fees contributed to the remaining revenue.
On the expenditure side, procurement costs constituted 64.8% of the overall expenditure, increasing by 65% to Rs 211 crore in FY23. Other expenses, including employee benefits, rent, professional fees, vehicle, and traveling costs, totaled Rs 249 crore in FY23, compared to Rs 160 crore in FY22.
Despite the substantial growth in scale and effective cost management, Ergos controlled its losses, which amounted to Rs 24 crore in FY23, slightly higher than Rs 23 crore in FY22. The Return on Capital Employed (ROCE) and EBITDA margin stood at -69% and -8.9%, respectively. On a unit level, Ergos spent Rs 1.11 to earn a rupee in FY23.
As of now, Ergos has raised approximately $32 million across various rounds and was last valued at around $55 million. According to TheKredible, Aavishkaar Capital is the largest stakeholder with 48%, followed by Chiratae Ventures and CDC Group. The founder and CEO, Kishor Kumar Jha, holds 11.84% of the company.
Ergos seems well-positioned to leverage inefficiencies in the supply chain, operating beyond Minimum Support Price (MSP) procurement for farmers. However, the potential for expansion into other crops remains a consideration, contingent on building a robust network and accumulating key learnings.
