Greenhouse-In-a-Box

Kaushik has spent the last 11 years on solutions that can deliver income resilience to rural Indians. He spent the first 6 years of his career bringing resilience to rural youth through vocational training and placement services. He was the first employee and leadership team member of B-ABLE, a company that trains 70,000 youth yearly. In 2015, realizing that rural youth were increasingly vulnerable due to the failure of their family farms, he co-founded Kheyti, an initiative bringing long-term resilience to smallholders through climate-smart technologies. As the CEO, Kaushik oversees company strategy, partnerships, finance, and people. 

Kaushik graduated from IIT Kharagpur (top 3 Indian engineering school) and has an MBA from Columbia where he won the Gantcher Prize and the Tamer Grant for his social impact contributions. Kaushik is an Acumen Fellow (one of 20 Indians selected yearly) and a DRK Entrepreneur (one of 20 selected yearly worldwide)

100M farm families in India LOSE money on average from agriculture. A large reason for that is climate risk, made worse with climate change. Globally, 500M families grow 80% of the food we eat. Their plight is similar. We need to fix this vulnerability of these families, fast. 

After many years in rural India and conversations with >1000 farmers, we’ve created the Greenhouse-in-a-Box, a low-cost modular greenhouse that protects crops from climate risk and helps grow more food sustainably. We also offer farmers holistic services that ensure success. 

Over 3 years, we’ve proven we can deliver resilience. Our greenhouses generate additional dependable incomes of $1,000/year; doubling farm income and creating a path out of poverty. 

Our vision is to scale to 1M farmers in 10 years. We will also work with others to make climate-smart farming the industry standard, ensuring millions of farmers across the world become climate-smart farmers.

India is a country of about 120M farming families (400 million people), 85% of whom own less than 5 acres of land. These 100M families LOSE money on average from agriculture. Climate variability, made worse due to climate change are big reasons for this situation. 

Small farmers are extremely vulnerable to the unpredictability of weather conditions. Two-thirds of the sown area is still rain-fed. About two-thirds of this is drought-prone and a big part of the rest flood-prone. ASSOCHAM estimates farmers lose $7 billion yearly from pest attacks. A Nature study found yields dropping 10% annually due to increasing heat. In 2015, news-outlets reported 8M farmers lost incomes due to one unseasonal rain. 75% of farmers (CSDS survey) want to quit farming because of this variability. Considering small farmers grow 80% of food, this is now a problem that affects everyone. 

Covid-19 has worsened things. During the 60-day lockdown, market prices fell 40% & fluctuated 400%, with $6.5B estimated losses. Many farmers are going under, putting food security in jeopardy. The fallout is expected to drop farm incomes by 33% this year

Kheyti’s “Greenhouse-in-a-Box” (GIB) is a low-cost, modular greenhouse bundled with end-to-end services. Our core product is a steel structure that houses farmer’s plants. It's designed to be modular at 1/10th an acre (slightly less than the size of a basketball court and 10 feet in height) and built at 33% cost of traditional greenhouses in India. 

It is covered with insect netting on all sides to cut pest attacks 90%. It uses additional shading cloth on top to reduce temperatures by 5 degrees C and help farmers grow in the Indian summer. It uses drip irrigation to reduce water usage. Overall, it helps farmers grow 7x food at 1/50th the water/kg when compared to traditional cultivation. 

Technology alone is not enough. Smallholders face risks at every step. We are also system integrators and bring together banks to get farmers’ loans, input wholesalers to get farmers cheap seeds and nutrients and market buyers to help farmers sell produce. Our technical team provides training and “plant telemedicine” through a tech-enabled call center.

Today, 300 farmers engage just 2% of their land, use our services, work 2 hours daily, and earn $100/month, a 100% increase in farm income. 

Our customer, boss and reason for being is the smallholder farmer - Farming families who own less than 5 acres of land and depend on agriculture as a primary means of livelihood. India has 100M of these families and they are in crisis. A large percentage are from minority communities. 

Farmer centricity is our core DNA. When launching, we spent 6 months talking to a 1000 farmers. While we heard a myriad of challenges, from indebtedness to healthcare costs, the two statements repeated by every family were - “in the end, everything depends on weather” and “climate is worsening every year”.

Kheyti’s mission became bringing climate resilience to small farmers. We baked in the process of farmer centricity. Every single iteration of our product, our services and our training was designed by bringing farmers into the decision making process. Every employee of Kheyti has talked to a farmer in the hiring process. Farmer income and farmer happiness are the north star measures.

Today, our solution delivers $1000/year of climate resilient income to 300 farmers. It doubles incomes and creates a path out of poverty. Our farmer centricity has led to excellent farmer retention and a pipeline filled with farmer referrals.

400M rural people work in Indian agriculture.They contribute only to 12% of GDP and are much worse off than urban India. Poverty in rural India is 2x of urban. Literacy is 67% (15% lower than urban). Rural India also lags in all health indicators. More than 90% of our target customers come from minority groups - religion, caste minorities, which fare even worse.

Our solution increases net income by 100% for rural families. Our farmers use this income to send more children to school, access healthcare and live lives of dignity. We will deliver that dignity to a million families.

In 2009, Kaushik turned down a career in consulting after graduating from the top engineering college of India to join a 1 person startup, B-ABLE, training rural youth in vocational skills. He spent 5 years scaling that organisation to 500 staff. At B-ABLE, Kaushik met Saumya, a professional who had left a thriving career in investment banking. They rolled out training for thousands of rural youth.. Even after reaching such a scale, they were unhappy with the impact. They felt they were addressing a symptom (youth unemployment) and not the cause (agriculture failure).

Sathya and Ayush, the other two co-founders of Kheyti, were going through a similar journey. They spent 5 years building CosmosGreen , an enterprise that has served 8000 farmers through advisory & market linkages. However, when they studied results, they realised their impact was very variable. These 2 partnerships joined forces when Sathya & Kaushik met at the Acumen fellowship. The team decided to reset their understanding of the sector and hit the road to talk to more than 1000 farmers over 6 months. The idea of Kheyti was born after the farmer voices they heard unequivocally identified the problem of climate risk.

I grew up sheltered. A city kid in a middle class family. I went to college with a 10 year plan. This plan involved a consulting job, an MBA and a corporate career. I did not spare much thought about poverty around me - I thought it wasn’t my business.

In my senior year, I had an experience that shattered my world view. I volunteered at a school for orphans in my summer, largely  on the insistence of my father. The 3 months I spent teaching 14 year olds computer skills changed my life. Those kids absorbed my lessons like sponges. Soon, I had to study everyday to be ready for them.

I have had that same experience a 1000 times over in the last 11 years. I’ve worked in 100s of villages and lived in 20 small towns. Every time that my work has created opportunity - a training program, a job offer, a new technology for a small farmer - I have seen that opportunity multiplied manifold.  I am addicted to that experience. I want to experience it at least a million times in my life. Creating those opportunities is my passion, my business and my purpose.

Kheyti’s founding team of 4 has 40 years of experience in rural India. 

• Kaushik, CEO had 6 years of leadership experience before Kheyti and helped drive the strategy to grow an organization from scratch to 500 staff. 

• Sathya, President, is a farmer expert. He built a startup that served 8000 farmers and chaired farmer collectives. He’s advocated for farmer issues and is recognised with Acumen, Mulago and Aspen New Voices fellowships.

• Saumya, Chief Program Officer, is a customer experience guru. She brings 4 years experience leading programs and a Kellogg MBA. She is a Forbes 30 under 30 Social Entrepreneur.

• Ayush, Head R&D, is a crop expert. After 5 years in financial services, he wasa farmer for 5 years managing 100 hectares. 

Over the past 4 years, this team has already proven traction.

• Proven incomes with 300 families: This year, our farmers have earned an average of $85/month (90% increase) using just 2% of their land and 2 hours/day

• Built the cheapest greenhouse yet: We partnered with Stanford, Northwestern, Israeli and Indian companies to iterate six versions of the greenhouse, reducing cost by 66% compared to the market. 

• Brought together >100 organisations to help farmers: We’ve partnered with the 3rd largest bank in India + 5 financiers for farmer loans. We’ve partnered with Israel’s leading greenhouse company and India’s largest agri-conglomerate to deliver greenhouses. We have 8 input wholesalers and 20 market retailers with 500 supermarkets providing linkages. 15 global donors support us every year.

Our model requires that farmers get access to loans. Nobody lends large amounts to farmers in India. Everybody we talked to told us our solution would fail because of this. We talked to more than 20 banks and they all rejected us. Some laughed when we said small farmers were bankable. After months of trying, we were losing faith.

Hearing the voices of farmers who were asking us for this greenhouse, we took a risk - we gave the first 15 loans out of our pocket. Over 6 months, we collected data on farmer repayments and kept going back to those banks. They still said no. 

However, using that data, we were able to convince a small non-bank financier to give 15 more loans. We repeated the cycle - collecting data and going back to banks.

Finally, after almost 2 years of perseverance, we convinced the 3rd largest bank in India to sign a first-of-its-kind partnership to give affordable loans to farmers. Today, we have 7 partners. We are asked to speak about farmer financing in many forums today. If we did not listen to our farmers, did not take the risk, did not persevere, Kheyti would’ve been a non-starter.

Leadership is hard. I’ve found  the only way to stay consistent is to be values driven. 

The Covid-19 lockdown and the impending economic downturn tested our leadership. We started the year with goals to grow 5x and had to throw this growth plan out. Uncertainty in revenues that we would not be able to survive the year with business as usual. We had to make decisions.

Kheyti’s first value is farmer centricity. First, I redirected our team to work with authorities and farmers to ensure farmer continuity. Second, I set aside a major part of our cash for farmer contingencies. Third, I launched a short term response to support other farmers.

We had to cut costs. Focusing on our value of caring, I and other leadership took 40% paycuts first. This helped us ensure no paycuts for staff in low income groups (50% of our staff). We had no layoffs - we put 5 people on furlough and ensured benefits.

This paid off. Our team stepped up. Donors and partners were inspired - we raised more funds and got better terms from partners. We survived the storm, reversed some of the decisions and are on our path to thrive again.

Farmer centric design is our DNA. Conventional greenhouses are expensive and available only on a minimum size of an acre, making them inaccessible to small farmers. Our DNA helped us design a modular greenhouse at 1/10th an acre and bring down the cost of our greenhouse over six iterations to 66% compared to market, making them affordable and accessible to small farmers. This low-cost greenhouse has an ROI of 70%, the highest of any other asset small farmers have access to. The next version (Greenhouse Lite by october) will cost 95% less compared to mainstream greenhouses. 

Farmer centricity also made us system integrators. Technology alone is not enough for small farmers because they face risks at every step. This is why we work with partners to offer farmers end-to-end services. We work with banks to offer farmers low-cost loans. We work with input and market companies to provide farmers linkages to markets. We provide training and advisory to farmers over the phone and WhatsApp. 

We are the only ones contextualising greenhouses, a technology used by large farmers for centuries, to small farmers. We are the only ones providing a “one-stop-shop” solution to ensure farmer adoption and success.

• Target audience and stakeholders:

  • Smallholder farmers owning <5 acres of land

  • Farmer collectives and NGOs working with groups of farmers

  • Manufacturers and fabricators

  • Banks and financial institutions

  • Input manufacturers and wholesalers

  • Produce wholesalers and retailers

• Key Activities

  • Kheyti contextualises low-cost technologies to farmers

  • Kheyti identifies and partners with stakeholders

  • Kheyti works with partners to enroll farmers

  • Kheyti facilitates soft loans to farmers from bank partners

  • Kheyti and partners manufacture and install greenhouses for farmers

  • Kheyti facilitates sale and distribution of seeds, fertilizers and nutrients to farmers

  • Kheyti’s agronomists offer training and ongoing advisory services to farmers in-person and through tech-enabledTt call center

  • Farmers grow crops in greenhouses

  • Kheyti facilitates sale of farmers’ harvests to produce buyers

• Outputs

  • Farmers have improved cultivation knowledge (validated through detailed assessment of farmers from training, photos and visits by our technical staff)

  • Farmers have increased use of quality inputs (validated through farmer feedback and assessment of other inputs available in region)

  • Farmers have decreased water, pesticide and fertiliser usage (validated through controlled tests in R&D farm and farmer feedback)

• Outcomes

  • Farmers have increased yield (validated through R&D benchmarking, detailed data collection of farmers’ greenhouses and farmer surveys)

  • Farmers have increased profit (validated through detailed farmer income data collection and farmer surveys)

  • Farmers have increased water availability

  • Crops and soil have reduced chemical exposure (validated through initial soil and water tests of farmers land)

• Impact

  • Primary

    • Increased net agricultural income (validated through preliminary farmer surveys)

    • Improved farming environment (validated through initial soil and water tests of farmers land)

    • Improved farmer health (not validated - requires long term study)

  • Secondary

    • Improved quality of life for farmers (validated today anecdotally through investments seen from farmers in housing, education and healthcare)

    • Improved food safety (validated today by food residue tests done periodically for samples of produce)

We are currently serving 1500 people in 300 farmer households. In one year,  we will scale our reach and impact 7,500 people in 1,500 farmer families and 4500 lives. In five years, we aim to impact 250,000 people in 50,000 farmer families with our direct interventions.

Kheyti aims to scale its impact by 5x in the one year and 150x in five years. To achieve this ambitious plan, we are planning 3 phases.

Consolidation (1 year): We have built the foundation needed for scale in partnerships, product, people and process. We will spend 1 year fine-tuning these and launching our ambitious new product, greenhouse lite, an ultra affordable greenhouse that will cost 95% lower than mainstream greenhouses. We will reach 1,500 farming families in this time and grow team to 65.

Replication (2 years): This phase will primarily focus on proving the replication of Kheyti’s scale engine. We will work with farmer collectives to scale our model geographically. We will expand partnerships with banks, market players and manufacturers to be able to deliver faster. We will invest significantly in technology and farmer training to ensure standardization of our solution. We will also engage with policymakers to create partnerships that can help us scale rapidly. We will be reaching 10,000 farmer families during this phase and grow team to 200.

Rapid scaling (2 years): Once our recipe for scale is proven and tested with 10,000 families, we will focus on rapid expansion to ensure that our solution reaches many more farmers. We will also start playing a role to make our solution the industry standard, so that it can be replicated by other partners across the world. We will reach 50,000 farming families during this phase and grow team to 500.

When Kheyti ran it’s pilot program with 50 farmers in 2017 and 2018, we identified three key challenges to scale.

1. Farmer financing - while our greenhouse costs 33% lower than market and is modular at 1/10th an acre, small farmers still don’t have the cash available to purchase them outright. Providing financing, therefore becomes a requirement. Because most mainstream financial institutions don’t provide loans to farmers, this was a key barrier to scale.

2. Market linkages - Greenhouses grow high quality vegetables. Existing supply chains don’t allow farmers to take advantage of this quality. In the absence of market linkages, farmers won’t increase their income as much as we target.

3. Cost of advisory - Farmers don’t just require training, they require ongoing support over the first few years to help them succeed in their greenhouses. In our pilot program, the cost of providing this advisory on the ground using field staff was found to be prohibitive.

All these three challenges were mitigated largely by 2019 (7 bank partnerships,500 super market partners and tech enabled advisory). However, Covid-19 has thrown those concerns back into the focus. 

1. The economic impact is going to reduce the focus of financial institutions on farmer loans and farmers’ capacity to take large loans

2. Many market players might go under because of the economic downturn. In addition, the willingness to pay premiums for higher quality crops might reduce

3. The lockdown and social distancing norms completely remove the possibility of providing physical advisory services.

Over the past 3 months we have been working on mitigating the barriers caused due to Covid-19.. 

1. Farmer financing: We have gotten commitments from our existing financing partners to continue to make loans during the pandemic, with the first 30 loans after the pandemic being released this week. We have also negotiated longer moratoriums to ensure farmers get some cushion. To mitigate this barrier further, we need to expand our partnerships to more institutions

2. Market linkages: By working with authorities, we have ensured essential logistics of our farmers during the pandemic. The increased yields from our greenhouse have offset the market shocks for many farmers. However, as we look towards scale, we have a two expand our network and create a brand for our farmers.

3. Advisory: Starting January, our team has been working on a mode of “plant telemedicine”. Using WhatsApp (a tool farmers already use) and simple back-end technology, we have been able to provide remote advisory services to farmers. During the lockdown, with 0 physical visits, our farmers had 0 crop failures. WE need to continue investment in technology to make this scalable.

In addition to the above, the biggest mitigation plan for Kheyti is our new product, Greenhouse Lite, an ultra-low-cost product to be launched by October that will be easier to finance from banks and more accessible to small farmers. It will also grow staple vegetables, reducing the need for high-touch market linkages.

Another value of Kheyti is Collaboration. We strongly believe in working with others rather than reinventing the wheel. By building reliable production capacities in smallholders and by aligning incentives, Kheyti has inspired more than 100 organizations across the value chain to work inclusively with smallholders and make our solution holistic. 

• We have worked with Stanford’s Extreme, Northwestern’s design school, Israelin and Indian companies to design our greenhouse product. Most recently we have partnered with Dalberg Design for our next iteration of the product

• We have collaborated with more than 20 NGOs, farmer collectives an co-ops who have more than 1 million farmers to spread awareness.

• We work with Mahindra (largest Indian agricultural conglomerate) and Top Greenhouses (leading greenhouse manufacturer in Israel) to fabricate and install greenhouses

• Bank of Baroda (India’s 3rd largest bank) and APGVB (a rural bank with 1m+ customers) and 5 other non bank financiers offer affordable greenhouse loans to our farmers. 

• To provide farmers right training and advisory, we also work with behaviour change experts (Appleseed Impact) and more than 20 crop experts

• We work with Rijk Zwaan (Netherlands), Syngenta. Fortis AGro etc for the supply of quality farm inputs and with Big Basket (India’s largest e-commerce grocer), Metro, Ninjacart and 25 others (with 500 supermarket outlets) for procurement of our farmers’ produce at fair prices.

• Target customer: Our target customers are small and marginal farmers, who own <5 acres of land, and for whom farming is the main source of livelihood. There are 100 million of these farming families in India.

• Offering: We design and deliver low-cost (33% of market) greenhouses which increase  their income (by 100%) and protect from the climate. We also provide end to end services to ensure farmers make steady money. This includes financing linkage to help farmers buy greenhouses, inputs, and market linkage to ensure farmers can grow & sell crops, and advisory to ensure high yields.

• Value Proposition: Our solution not only provides 7x yields and additional climate-resilient profits but an option to practice farming throughout the year. Our product’s 50X water efficiency makes it an ideal asset for smallholders living in 80% of India’s arable drought-stricken terrain.

• Revenue model: - One time revenue from greenhouse sale. Recurring revenue in the form of commissions from input and market linkages.

• Go to market: We work with farmer collectives, banks, and local third party agents to spread awareness and enroll farmers. We play the role of a system integrator rather than reinventing the wheel - we have partnerships with financiers, input suppliers, material fabricators, logistics providers, and market linkage partners to ensure an end-to-end service to the smallholders.

• Distribution: For input and market linkages, we use third-party transporters to ensure last-mile delivery. For our advisory service, we use a tech-enabled call center to provide on-going support to the farmers

Our goal is to build a sustainable and scalable model for impact. We are creating financial sustainability with two revenue streams. The first is from the one time sale of the greenhouse, an amount that is paid upfront by farmers through an affordable loan they receive from bank partners. Today, our greenhouses costs $2,700, farmers pay $270 and a bank finances the rest. 

The second is a recurring yearly revenue in the form of commissions from input companies and market players for the linkages we provide to farmers. Today, a Kheyti greenhouse farmer does $3,000 of transactions/year on input and market out of which we get a commission of 10%. We have already validated both these revenue streams. 

In 2019, 50% of our $1M budget was funded by earned revenue. In 2020, despite the pandemic, we are maintaining this ratio for our $2M budget. By 2022, 85% of our $8M budget will be funded by earned income and by 2024, we will be able to make this model self-sustaining.

April 2019 to March 2020

• Earned Revenue - Greenhouse Sales and Service Commissions - $544K
• Grant Revenue - $900K

Some key grant makers

• Mulago Foundation

• Cartier Philanthropy

• Jasmine Social Investments

• Peery Foundation

• DRK Foundation

• Sophia Akash Foundation

• We seek to raise $2 Million in Grants for the next two years; $500K to be closed by end of CY 2020 and $1.5 million by end of 2021

• We would also like to raise $2 million in low-interest debt funding for working capital purposes

Our estimated expenses for 2020 are $ 2.1M.

• COGS & Direct Costs: $1.06M

• Salaries & Travel: $0.34M 

• Other overheads: $0.06M

• R&D: $0.41M

• Tech Enablement: $0.14M

• Farmer Contingencies: $0.12M

1. Increased brand: The on amplifying our work would be essential for multiple reasons.
   1. Collaborative action: Many parts of our model and our barriers on farmer financing and market linkages, depend on our ability to bring together large institutions. This will be immensely more easy with a stronger brand.
   2. Higher prices for farmers: As mentioned above, to ensure that our farmers get higher prices for their produce, we need to be able to tell their story to consumers. The prize’s work will help us do that better.
   3. General benefit: The increased brand will also help us attract talent and additional funding, essential items for our growth.
2. Mentorship
   1. Go to market strategy: Apart from brand, for us to really solve both the farmer financing and market linkage problem, we need strong mentorship from industry leaders on go to market strategy, something the prize’s offerings will really help us in.
   2. Technology strategy: For us to really support farmers at scale and deliver high quality services, we need to invest in technology. There is not other place better than the MIT network to get this expertise from.
   3. New product strategy: Our new ambitious project, Greenhouse Lite, requires us to rethink design, technical inputs and roll out strategies. This is another area the MIT and Elevate networks would be invaluable in.
3. Funding for Greenhouse Lite: We need $800K total to get Greenhouse Lite to scale by next year. We’ve raised ~$450K. This prize can get us close to the last mile

As mentioned above, the partnership focus for us would be around the mentor ship required on

1. Go to market strategy: Apart from brand, for us to really solve both the farmer financing and market linkage problem, we need strong mentorship from industry leaders on go to market strategy, something the prize’s offerings will really help us in.
2. Technology strategy: For us to really support farmers at scale and deliver high quality services, we need to invest in technology. There is not other place better than the MIT network to get this expertise from.
3. New product strategy: Our new ambitious project, Greenhouse Lite, requires us to rethink design, technical inputs and roll out strategies. This is another area the MIT and Elevate networks would be invaluable in.

While we are unsure today of the exact organisations that would be in the Elevate network. A few potential organisations/individuals that could be great for us:

1. MIT - Agriculture and design focused divisions like the Tata Center or MIT Open Agriculture (Media Lab), MIT Design Lab that could mentor us on our product development and go to market journey
2. MIT - Applied computer science divisions that could mentor us in building a technology platform for serving farmers
3. Loan making organisations that can help us build a farmer financing strategy for scale
4. Entrepreneurs who have built large rural enterprises to advice us for our scale journey
5. Food systems experts that can help us build our market linkage strategy for scale