What led to Procol's shift from an agri commodity e-auction platform to a horizontal end-to-end procurement solution?

That's a very good question, and I repeatedly get that. When we started, we had one large enterprise customer, which was buying around Rs 7 billion of agri commodities in about 40 different locations. And they were fragmented, with no transparency. All the transactions were happening on phone calls, or emails, or WhatsApp. So we identified one common problem statement that, if the company wants to buy, it wants to buy most efficiently. The initial app that we built was a very basic reverse auction app that enabled buyers and sellers to collaborate faster and negotiate on prices on mobile. And that led to a lot of efficiencies in the supply chain itself. We realized that there are many middlemen in the agri commodity supply chain, which overall, you can either include in your supply chain or get rid of. But the strategy overall became that removing middlemen will not work for now.

It's a long-term play where you can build a digital ecosystem for all the participants to come on a single platform to start transacting. The idea was that if you have to bring cost efficiencies in this market, you have to continue building for different value chains in the same vertical. Whilst this was our initial thesis, we realized early one common thing in all vertical marketplaces. We realized that there are little to no long-term moats for vertical B2B market business. Largely all of them run because of the lower cost of capital and continuous needs of working capital. And so we realized early on in 2020 that we don't want to just build a business for a short-term period. It has to sustain a few decades at least. So we thought what are the moats we can build in this B2B marketplace ecosystem.

The first and foremost that we could see for every procurement or every commerce, the moat came from demand. People who own the demand could basically go back and clean up the supply chain later on, add on multiple solutions on top. So we said, let's own the demand on one side. And what I mean by owning is getting embedded into the demand systems. That's what Procol then became, which meant that we go to enterprises, we start taking over their spend category by category, and start bringing efficiencies and cost savings within their existing processes and systems.

We now deliver 5% to 6% average cost saving for every enterprise we get into. Customers are increasingly using Procol for the raw material spend, logistics spend, packaging spend, MRO spend, and multiple categories because we became the embedded system of these companies. And now, after two years, Procol has become a brand in this segment, where enterprises consider Procol as the go-to partner for consolidating their spend and optimizing their spend management. We believed we would go into SMB, but SMB is always only a working capital or an operations player. That's what led to the shift.