Startup Profile: Sustaining 600 Million Farmers With a Drip
June 25, 2011 | Robert Puro
Drip irrigation is not new technology, but up until now it has been out of reach for the nearly 600 million small-plot farmers in the developing world. It’s adoption in the coming years by small-plot farmers particularly in India, Africa and China where water scarcity issues continue to grow more acute will play an outsize role in sustaining agriculture and food security. To drive this adoption, Driptech, a for-profit Silicon Valley, CA-based social enterprise startup has developed a high quality, yet low-cost drip irrigation system.
The company’s irrigation solution traces its origin to a course offered at Stanford University called ‘Entrepreneurial Design for Extreme Affordability’ that the company’s founder, Peter Frykman, enrolled in while studying there. As part of the class, Frykman traveled to Ethiopia specifically to work on looking at irrigation solutions for small-plot farmers. “The product and the manufacturing technology that he developed out of this course and out of his experience in Ethiopia really started with looking at the needs of the smallholder farmer,” said Jean Shia, Director of Business Operations at Driptech. The product was also developed to help alleviate poverty and increase food security by providing small-plot farmers with technology to enable them to conserve water, extend the growing season and increase yields.
The irrigation system that Frykman developed requires none of the expensive emitters necessary for larger scale irrigation operations, which enables the company to price its product at two to five times less than a typical commercial system. Driptech also says that on average farmers realize 30% to 70% in water savings and recoup their initial investment in less than six months.
How it works
The Driptech Irrigation System provides small-plot farmers with specially designed drip irrigation tubing, takeoff valves, grommets and a filter. So a small-plot farmer first rolls out the irrigation tubing, which delivers a uniform flow of water to crop roots via precisely punched holes (sold in rolls of 200 meters in length). The farmer then attaches a takeoff valve to the irrigation tubing to enable him/her to control the area of land that he/she wants to irrigate. The farmer uses the grommets to connect the takeoff valve to the PVC pipe that delivers the water from it source. A filter with a mesh-type screen filter to purify the water prior to irrigating crops is connected between the water source and the PVC piping.
The irrigation system can be scaled accordingly depending on the size of a farmer’s field.
According to Shia, Driptech seeks to capitalize on a huge untapped market of small-plot farmers by offering them a high value, but affordable product that provides a substantial improvement over the technology that is currently available.
“We’re looking at addressing the needs of the small-plot farmer who’s not farming at a commercial scale, who’s farming on plots of land five acres or less,” she said. “We’ve put the number around 500 – 600 million around the world.”
Driptech is currently focused on delivering its irrigation system to farmers in China and India, who together make up the largest percentage of small-plot farmers in the world.
To market and distribute its system to small-plot farmers in China and India, Driptech has formed partnerships with corporations, governments and NGOs. Shia said the company does a limited amount of direct sales through its own sales officers, but “we really think the key to achieving scale and volume distribution of our product has to be through more substantial partnerships.”
Shia said another unique aspect of the company’s business model is that the manufacturing technology that it uses to produce its irrigation systems is both portable and modular. “We can set up distributed manufacturing nodes in the markets that we’re working in,” she said. “We don’t need the enormous infrastructure investment of traditional manufacturing.”
Choosing a for-profit model
Shia said Driptech elected to choose a for-profit model over a non-profit model because non-profit organizations are not structured in a way that enables them to focus purely on the commercialization of a particular technology. “[Non-profits] may have grant funding and a lot of programmatic goals,” said Shia. “As a for-profit company we can really just focus on distribution partnerships, commercialization, technical development and attracting the kinds of capital and investors who are interested in seeing a product commercialized.”
According to Shia, Driptech, which was founded in 2008, has so far raised seed capital from a number of angel investors and is about to close its Series A round of funding.
Challenges to Scaling
To scale Driptech, Shia said that the company must grow its employee base in order to meet customer demand. “We have a lot of inquiries from people who want to partner with us, but in each relationship and each organization finding a way to effectively work with the people who are interested in partnering with us takes a lot of work and creative strategizing, planning and execution.”
Another hurdle to scaling the company comes from the difficulties inherent in negotiating the complex regulatory systems and business environments that exist in the countries in which Driptech seeks to distribute its product. “For a small company without a whole lot of infrastructure, and you know we’re a startup, getting to the point where we’re able to operate at the same level of sophistication as other multinational companies will take us a little bit of time,” said Shia.
Over the next two years Driptech projects exponential growth in the scale of its operations, which it believes will come from both an increase in partnerships within India and China and from expanding product distribution to a third country in 2012. The company believes that it will achieve profitability within the next five years. “We want to be reaching millions of farmers within the decade,” said Shia.
With Driptech poised to increase the reach and distribution of its irrigation system, small-plot farmers around the world facing water scarcity issues may finally have a solution to help them farm more sustainably, improve their livelihoods and advance global food security.