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Ricult is building a ‘Bloomberg Terminal’ for Thailand’s agricultural sector: Startup Stories

Written by Stephanie Pearl Li Published on     4 mins read

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Can a free app improve the livelihoods of smallholder farmers? Aukrit Unahalekhaka thinks so.

In 2014, Aukrit Unahalekhaka, a 24-year-old graduate student of engineering and management at the Massachusetts Institute of Technology, pitched the idea of developing mobile tools to ramp up the income of small farmers in his native Thailand during a Development Ventures class.

Growing up in a family that runs agriculture businesses in Thailand, Unahalekhaka has seen how smallholder farmers have long been plagued with issues like low productivity, high fragmentation in the supply chain, absence of financing, a lack of access to the market, and exploitation by middlemen.

“Most farmers make a loss every season, and they don’t know they are making a loss, as most of them are very old. They are getting older and older, which becomes a structural issue that affects almost half of the country’s population,” Unahalekhaka said to KrASIA.

Aukrit Unahalekhaka, Ricult’s co-founder and CEO. Courtesy of Ricult.

Although over 30% of Thailand’s total labor force is employed in the agriculture sector, this labor only accounts for 10% of Thailand’s gross domestic product (GDP), according to data from the United Nations, while about 40% of farming households earn an annual income below the country’s poverty line of THB 32,000 (USD 1,069).

There are multiple forces working against the farmers of Thailand, some natural, others humanmade. “Without any innovations, farmers are most vulnerable when it comes to climate-related issues such as rainfall and drought. It is very hard for farmers to get any loan from commercial banks, as most of them do not have income statements or monthly salary. They have to resort to loan sharks, who charge them 200% more than banks every year. They don’t have access to the markets to sell their products too,” Unahalekhaka said.

Smallholder farmers generally have difficulty accessing regional and global markets, as they often receive limited information that helps them make key decisions like setting a fair price for their crops. Also, many farmers are in debt, or may feel compelled to sell their output to middlemen who seem capable of managing business matters.

In the same Development Ventures class at MIT, Unahalekhaka met Usman Javaid, who is Pakistani and witnessed similar issues plaguing the farmers in his own homeland. The two went on to found Ricult in 2015. Just a year later, they were joined by two MIT alumni, computer science graduate Jonathan Stoller, who previously worked for Google and Microsoft, and Gabriel Torres, who used to work as a trader for a hedge fund in the US.

They began operating in Pakistan in March 2016, selling seeds and fertilizer to local farmers. In October 2017, the firm commenced its trial operation in Thailand, four months after rolling out its mobile app. Fast forward to now: Ricult has provided services for over 304,800 farmers in Thailand and Pakistan.

The startup’s business model centers on collecting data from the many smallholder farmers scattered across a country, selling it to agricultural stakeholders. This fills a niche—systematic and insightful data about farms and farmers is generally not available. 

Ricult does this on two fronts. It operates a free app for farmers that offers information such as weather forecasts and monitoring, advice on crop performance, and remote crop monitoring via satellite imagery. In return, farmers who use the app must log an array of information, including GPS coordinates of the farm, some personal information, the type of crops they cultivate, their soil’s quality, and fertilizer application schedules.

After compiling the data, Ricult generates credit scores for farmers that indicate their ability to repay loans. Meanwhile, the firm sells the data to banks, lenders, insurers, agriculture input suppliers, forest management firms, or other agribusiness firms so that they can calculate the risk or predict the farming outcomes in a more effective manner.

The app also connects farmers to a digital marketplace where they can purchase seeds, fertilizer, and pesticides sourced directly from multinational firms. It also creates new business connections by linking up farmers with buyers at processing mills.

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Unahalekhaka affirmed that the firm complies with Thailand’s Personal Data Protection Act BE 2562, also known as PDPA, which emulates the European Union’s General Data Protection Law, so as to avoid the misuse and collection of personal data in the country.

Most of the firm’s earnings come from selling its data to banks and major agribusiness firms. It also charges commission fees for products listed on its mobile app. Ads on the app provide an extra dose of revenue.

What Ricult offers is unique in the region. “We are like a Bloomberg Terminal for the agricultural sector that helps firms to monitor and predict the productivity of the crop,” Unahalekhaka said.

The scalability of Ricult’s business model has attracted attention from investors. In August last year, the firm notched USD 2 million in a pre-Series A round, bringing the total seed funding to USD 5 million. The firm had planned to spend the fresh capital by scaling up and expanding to neighboring countries including Laos, Vietnam, and Indonesia, but travel restrictions brought by COVID-19 have put a pin in those plans.

Ricult decided to focus on Pakistan and Thailand, where there is still room to grow, said Unahalekhaka. “In Thailand, the agriculture sector is huge, and we only take about 5% of the market share. That means that we have huge growth potential, as the mobile platform that we built can solve a problem for half of the country’s population.”

The firm experienced 500% growth in its business last year, though Unahalekhaka did not disclose the revenue amount.

In the near future, Ricult expects to close a USD 5 million Series A fundraising round by the first quarter of 2022, which could take the company to new locations in Southeast Asia. “We hope to grow our farmer base to 3 million within the next three years, and expand to neighboring countries like Cambodia and Vietnam in the meantime. Our vision is to use our technology to help lift the farming community in ASEAN,” said Unahalekhaka.

This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.

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