MRIDA GROUP: A Social Business Venture Aims for Holistic Rural Development

BWDisrupt interacted with Mr. Arun Nagpal, Co-founder, Mrida Group

Founders name: Gurveen Sood, Manoj Khanna, Arun Nagpal

The Man Behind It - Arun Nagpal, Co-founder, Mrida

Mr. Arun Nagpal is a Co-founder & Director of Mrida. At Mrida, Arun oversees the Group’s vision, and the strategic as well as key operational initiatives to achieve the same, including building synergies between different Mrida businesses and entities. His specific focus is on Mrida Renergy – a renewable energy business which promotes energy access as a tool for holistic rural development. He is also involved in Group finance/funding, and marketing/brand building initiatives.

A Mechanical Engineer from College of Engineering, Pune and an MBA from IIM Calcutta, Arun brings to Mrida over 30 years of cross functional, diverse business experience covering Automotive Components, FMCG, Building & Construction and IT, including 12 years at the leadership/CEO/Board levels. He has also worked as an independent management consultant with organizations such as Hindustan Unilever, the United Nations Food & Agriculture Organization, and the Minda Group.

Please share the startup journey from inception to till now?

Mrida Associates LLP was incorporated in Jan. 2014, while the 2 Pvt. Ltd. Cos. – Mrida Renergy & Development (P) Ltd., and Mrida Greens & Organics (P) Ltd. were incorporated in Feb. 2014

What is the Startup About?

Mrida (Sanskrit for ‘Soil’) is a Social Business Venture that seeks to build sustainable and scalable business models aimed at holistic rural development and economic as well as social upliftment at the Base of the Pyramid (BOP).
Mrida sets up solar micro grids in far flung villages not connected to the electricity grid, replacing kerosene lamps with environment friendly LED bulbs and providing mobile charging facilities and hence digital connectivity to remote rural habitats.

Small and marginal farmers in remote villages are encouraged to cultivate high value plants, crops and herbs. Mrida facilitates this, and seeks to build a end-to-end supply chain covering collection, storage, processing, value addition, branding and market access for a range of health and wellness related products and services, including traditional Indian medicine. The aim is to provide income opportunities and remunerative prices to rural households and cultivators, while at the same time offering health benefits to the end user. Central to Mrida’s agricultural initiatives is a fully equipped herbal extraction facility in Umbergaon – Gujarat, showcasing the best of equipment and technology, good manufacturing practices, and a comprehensive testing laboratory.

Let’s hear out the story behind Mrida’s Genesis?

The co-founders worked together many years ago (in 2000 at Oriflame) and remained in touch thereafter. When the ‘entrepreneur bug’ bit, they decided to come together again and take the plunge – a ‘Leap of Faith’ as we sometimes call it…The team initially got together and had a series of discussions at Gurveen’s residence in Delhi (Manoj travelled from his base in Mumbai for these interactions). Funding patterns, future Vision, working arrangements, and a host of topics were discussed, business ideas brought to the table, brainstormed, analyzed, shortlisted, worked on further, and so on. The excitement of creating an organization that drew on the wide ranging experience that the team brought together (Arun/Manoj/Gurveen had 28/25/15 years of experience respectively), to create another organization from scratch - built up as the discussions progressed. A journey had begun……

What are your unique key feature/services?

Mrida’s USP is the holistic approach to development which we feel is key to sustainability.
The Group seeks to move underserved, BoP (Base of the Pyramid) individuals and communities from the vicious circles of poverty, ignorance, lack of energy access/education/livelihoods, into virtuous circles of energy access, quality education, sustainable livelihoods, and access to markets – which in turn provides them with opportunities for upliftment and all round development
Even in cases where development initiatives are funded by others – as in the case of CSR projects for instance, the operations on the ground are still either structured around business models, or in any case made available to beneficiaries once they themselves make a financial commitment from their side as well. Nothing is provided free, and this, we feel, significantly alters the mindset with which these initiatives are perceived and utilized
Finally, the objective is to create win-win situations across the value chain, where everyone – from the farmer and village folk/rural communities, to the end user gains in the process, even as Mrida build financially viable business models, thereby ensuring its own financial viability and sustainability

How is it diff. from existing competing brands in the market?

To the best of our knowledge, most existing models providing the same or similar services are either:
• NGOs, in which case their own sustainability is dependent on availability of funding/donations, and where the rigors of a business model – cost and operational efficiencies, financial viability and sustainability, and so on, are by and large absent, or at least found lacking
• Organizations that focus on a given area of specialization – education, livelihoods, women’s empowerment, and so on. While this approach has its obvious advantages, the absence of a holistic approach, in our opinion, results in a situation where the loop is not closed, which in turn significantly impacts sustainability as well as scalability.

What the current Funding Status of your Company?

Mrida is today self funded as an organization, with an investment of approx. Rs. 4 crores which has gone into plant and equipment for the extraction facility in Umbergaon, startup costs, development initiatives undertaken in different parts of the country, marketing and product development initiatives, and funding of operating losses.

During the current F/Y (2016-17), we expect to make operating profits in Mrida Greens and also recover part of the accumulated losses. Mrida Renergy will be close to making operating profits though accumulated losses will remain to be covered. However, we expect to have a business model which shows clear signs of financial viability in this, our third year of operations. This will provide Mrida with a sound platform to obtain additional funding for scaling up in subsequent years.

What is the present Monetization model you are working with?

Mrida today has 3 revenue streams for its Renergy & Development business – the Village Level Entrepreneur (VLE)/Village Groups, Corporates for their CSR initiatives and Crowd Funding/Crowd Sourcing using Social Media (currently under development). For the Greens business and the Extraction facility at Umbergaon, revenues are expected to come in from B2B/Bulk customers in the initial stages, and from B2C customers as well, over time.

The Group is building additional revenue streams – for instance, Millets and other healthy grains procured from small and marginal farmers are being converted into a range of multi grain flours and value added products such as cookies and sweet/salted snacks which will be branded and sold in markets in India as well as overseas. Likewise, handicrafts and stitched items sourced from rural artisans and womenfolk will be sold under a ‘Mrida Market Place’ – a combination of web based and direct sales initiatives being planned by the Group.

Given the environment friendly, and socially impactful nature of the business, apart from funding to scale up and achieve economies of scale, we also expect to derive higher valuations for the businesses themselves, and better monetize the initial investments in the process.

Tell us about the current Traction details of Mrida?

Since its incorporation in Feb. 2014, Mrida Renergy & Development has initiated some interesting projects aimed at establishing proof of concept in remote rural areas in the Indian States of Rajasthan, Uttar Pradesh, Uttarakhand, Jammu & Kashmir, and Madhya Pradesh - the initial response and results have been quite encouraging.

The focus over the next 6-8 months would be to set up more such working models of energy access and agriculture related interventions leading to sustainable development in multiple villages/hamlets in different parts of the country.

Mrida has also partnered with leading business houses in India like Infrastructure Leasing & Financial Services Ltd. (IL&FS), Mahindra & Mahindra Ltd., and Reliance Industries Ltd. for integrated Corporate Social Responsibility (CSR) initiatives.

A range of products and services – 30 solar micro grids, 150+ Solar Street Lights, 4 E-Hubs, E-Rickshaws, agricultural initiatives and soon have been instrumental in providing opportunities for rural upliftment and sustainable livelihoods to underserved individuals and communities in different parts of the country. It is estimated that over 2000 households in rural communities have been illuminated, 150+ skills developed, almost 10,000 liters of kerosene saved, and more than 10,000 lives impacted through our efforts so far – a source of great joy and pride.

What plans for future do you have in mind?

Mrida is working on the concept of50-500-5000, whereby we hope to create 50 working models of our business concept in the ground in the first 2 years of operations, and then scale this up to 500 over the next 2 years, and more than 5000 in the next 2 years thereafter.
The predominantly B2B business operations in Umbergaon will be scaled up to include B2B business as well over time, in Mrida’s own brand name
In an effort to provide market linkages for small and marginal farmers, and rural women folk and artisans, the plan is to establish a ‘Mrida Market Place’ – in India as well as overseas.

Over time, the objective is to come up with a range of health and wellness related products and services – millet flours and value added products, turmeric and its derivative products, etc. – to provide additional opportunities for market linkages and also sources of revenue for Mrida.

Plans are also under way to launch an impact tourism initiative called Khoj – Journeys of Discovery, where individuals and groups will be encouraged to travel to rural field locations where Mrida is engaged on the ground, to get a feel of rural life, engage in regular tourism activity, and also continue to the local economy, and to various Mrida initiatives.

Can you tell us about challenges faced and how did you overcame them?
The holistic approach goes against current conventional business theories that speak of core competence, focus and so on – to that extent, convincing existing and prospective customers about the need for such an approach represents a challenge, more so given the relatively long lead time that such an approach entails

Working in remote rural areas itself represents a challenge, partly given the location(s) themselves, but also given the fact that however well-meaning we may be, it takes a long time to establish credibility and trust within the communities involved. Social, caste and political dynamics add to the complexity of the issues involved, and the resulting challenges that addressing these issues entails.

Finally, the holistic approach also stretches significantly, Mrida’s own band widths and resources, more so given the limitations of finance, given the self-funded status of the organization today.

What are the Market size & Opportunities Mrida is looking at?
As we say at Mrida, the only limits, as always, are those in the mind….While the challenges are many, the opportunities are immense, to say the least. Over 300 million people in India today (and over 1.2 billion globally) lack energy access, and in some form or other, are potential customers – not only for energy access itself, but also for the range of education, livelihood, and related opportunities that come with such access.

Health consciousness is something that the world at large is looking at and increasingly conscious about, across age, sex, demographics…. This, coupled with increased social and environmental awareness and consciousness, can potentially provide an excellent platform for Mrida to build its story – across all its businesses.

The constraints and the challenges notwithstanding, having more or less established proof of concept on the ground over the last two years, and having being able to showcase a clear trend towards profitability from a business perspective, and sustainability as well as scalability from a social and environmental impact perspective, we do feel that while we still have a long way to go, we have covered substantial ground in establishing a strong and solid foundation on which Mrida can build a number of strong, profitable, and growing business opportunities.

For more information, please visit: http://www.mridagroup.com/