Agroha.io

Solution Name:

Agroha.io

One-line solution summary:

One Brick, One Coin: Using Micro-Investments to Finance Stronger Communities.

Pitch your solution.

Agroha.io is working to enable the power of group economics at scale - to unlock financial resources for BIPOC entrepreneurs and business owners traditionally overlooked by investors and banks. 

We achieve this by allowing entrepreneurs, local business owners, and creators to submit funding goals for specific purposes (expansion, new inventory, hiring, etc.) which can then by selected by our users to finance. 

The financing is sourced from a 'spare-change' model - as popular with apps such as Acorns - except in this case, the spare change is rounded and contributed towards 'causes' which the user can select. 

So besides good intentions what other incentives do users have? For their contributions, users will receive specific 'perks' offered by the cause-owners (eg. - 25% of haircuts, free small soda for every purchase, etc.) 

We'll empower stronger money circulation within communities and this model can be adapted to various countries and cultures. 

What specific problem are you solving?

For Agroha.io, the mission is reducing barriers to access which BIPOC entrepreneurs face in terms of finances. The business owners are often integral parts of their community but we found that several of them were at a disadvantage for considerations related to PPP and other institutional resources during the pandemic. 

According to a survey by advocacy group Small Business Majority. 23 percent of Black business owners who did not receive PPP or Economic Injury Disaster Loans said their PPP applications were denied, compared to 9 percent of white business owners. Also alarmingly, in Michigan overall, only 3 restaurants that received PPP loans of $150,000 or more self-identified as Black-owned, compared to 223 that self-identified as white-owned, according to the Detroit Free Press.

The distribution of PPP was among the factors the New York Fed researchers examined in trying to understand why an estimated 41 percent of Black-owned small businesses became inactive during the early months of the pandemic, more than double the 17 percent of white-owned businesses that did.

At the same time, there was a significant uptick in the savings and disposable income of several middle class to high-income households which could be used as a win-win for both parties. 

What is your solution?

The Agroha.io platform allows users to link our solution with their bank accounts in order to calculate 'spare-change' contributions (rounding change to next dollar) that the user contributes. 

Users will have the option to browse for initiatives they choose to support - local barbershop is raising $5K for expansion or a local restaurant needs $15k as a deposit for a new lease, etc. - and their contributions will then be routed to the local business. 

To prevent these small business owners from falling into a 'debt-trap' (a major issue) these will be interest-free but instead the business owner can offer perks to their supporters. (Discounts, free add-ons, free services, etc.) 

This value-exchange allows users to be incentivized for their contributions. 

In prototype, our tech stack consists of a bubble.io interface with a Plaid API integration which allows linking to bank accounts and approving the 'spare change' contributions. On the backend. a database will allow us to register each user, their contribution amount, and the initiative they chose to support which then allows us to tally numbers and process payouts. 

We have a gated landing page with a waitlist sign-up that allows us to control rate of access. 

Who does your solution serve, and in what ways will the solution impact their lives?

Agroha.io will serve two distinct personas: 

1) An entrepreneur-in-need, most likely BIPOC (our target demographic) who has a community of customers but due to circumstances or their own operations do not qualify for traditional financing or investment.

Our platform enables them to access funds - interest-free (a major differentiator) - while also increasing customer engagement and loyalty. Since the value exchange entails offering specific 'perks' to the users - such as discounts, free add-ons, etc. this also strengthens customer loyalty and customer LTV. In fact, great perks = more transactions = more money in the business' own pocket both by the bill and also the spare change round-ups! 

Traditional financiers rejected these businesses on the basis of 'risk-assessment' - which naturally harms businesses in high-risk communities. Therefore, we have negated this entire barrier to access - by rephrasing to conversation from financial risk to value-exchange. 

2) Users will comprise of everyday community members - these users either have a strong desire to contribute towards their community, support local businesses, or perhaps simply access better discounts, savings, perks, etc. 

The 'spare change' model ensures that they do not overspend - while accessing better perks to places they'd be spending their money at regardless. 

To better understand their needs our team has to look no further than our own associates and local community, Prior to working on Agroha.io, our CEO was leading a startup growth marketing firm with a specific focus on minority-founders. With the pandemic we saw founders' resources dry up in terms of revenue and committed investments - even forcing several to abandon their businesses for full-time employment. 

In our Phoenix market, several businesses including a Black-owned BBQ shop which had been around for 15 years had shut down. The owner had been there every single day running his shop and was all of a sudden left without his biggest asset. 

This was further informed by several conversations we had with other fellow entrepreneurs describing their rejected PPP applications and EIDL loans. 

Although some private and community grants served as a beacon of hope - there were far too few and also we wanted to create a solution that would be sustainable, scalable, and easy-to-access for those in need. 

Many of the businesses that went out simply needed $10k-$25k to stay afloat temporarily - but were taken out before they could see the recovery. 

Agroha.io is inspired by the legend of the ancient city of Agroha - a city in ancient India which was a haven for traders and entrepreneurs. What made it so successful? The city had a policy known as "One brick, One Coin" - which meant for every new resident that would settle in the city, each of the existing entrepreneurs would contribute one brick and one coin. This gave the new citizen bricks to build a home with and enough coins as startup capital. At its zenith the city is said to have housed 100,000 entrepreneurs creating massive opportunities for new settlers and therefore creating a thriving local economy. 

We are confident that by applying this ancient principle in the context of modern technology - we'll be able to support, sustain, and enable powerful economic growth for communities. 

Which dimension of the Challenge does your solution most closely address?

Explain how the problem you are addressing, the solution you have designed, and the population you are serving align with the Challenge.

Agroha.io leverages modern technology to solve the biggest challenge facing BIPOC businesses: access to non-predatory capital. 

Traditional financiers rejected these businesses on the basis of 'risk-assessment' - which naturally harms businesses in high-risk communities. Therefore, we have negated this entire barrier to access by reframing the conversation from 'financial risk' to 'value exchange'.

There has recently been a massive rallying cry for group economics in minority communities - which creates a great opportunity for us to drive user adoption to a concept they are familiar with.

Local communities have suffered with the recent dominance of online businesses that has sucked dollars out of communities - our platform helps to at least keep some portion of that money circulating within the community. 

The tech solutions we provide will enable BIPOC entrepreneurs to start up, grow, and scale their businesses without falling into debt-traps or vicious cycles of predatory lending. 

This will further lead to more jobs in the community. 

What is your solution’s stage of development?

In what city, town, or region is your solution team headquartered?

Explain why you selected this stage of development for your solution.

We are already building out our product - we have our tech stack finalized for our working prototype, we have our landing pages with waitlists already set up, and are actively working on interface building. 

Furthermore, we are already in talks with entrepreneurs and also microfinance early-adopters to create our initial test ecosystem of users and initiatives. 

Who is the Team Lead for your solution?

Anuroop Kumar