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Building a B2B Marketplace Business
A B2B marketplace playbook, LLMs in molecular biology, user research, product led growth, jobs, events, and more
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Building a B2B Marketplace Business
In today’s Startup Pirate, we’re digging into B2B marketplaces and how Wikifarmer has created Europe’s leading marketplace and go-to source for all things agriculture. I have Ilias Sousis, CEO & co-founder of the company, with me to chat about their journey since 2017, how they kickstarted and scaled growth among marketplace sellers and buyers, and what led Point Nine, backers of Delivery Hero, Zendesk, and Revolut, to invest in the company earlier this year.
Let’s get to it!
Ilia, it’s great to chat today. You’ve built an agricultural marketplace that’s point of reference in Europe and beyond, so I’d love to discuss lessons learned. But before we get to that, how was the idea for Wikifarmer born?
IS: Thanks for having me, Alex! We started Wikifarmer with my co-founder Petro Sago, an agronomist I’ve known since childhood. Petros had experienced first-hand the problem of farmers contacting him for advice. At the same time, I worked for Google for almost 11 years, following closely the growth of e-commerce. Agriculture is an industry that still lags in education. Farmers lack the knowledge to efficiently and sustainably grow their corps, as they mostly use outdated techniques, which are bad for their yield and environment. There are millions of Google searches daily around how-tos, but language is a barrier for non-English speakers. And surprisingly, until recently, there was no established wiki site for farmers. There was a wiki site even for baseball players and Game of Thrones fans, but not for farmers. We decided to do something about it.
We knew that by answering 20% of the questions (the most popular ones), we could cover 80% of the demand. That’s how Wikifarmer started. Today, the library consists of thousands of records with definitions, how-to guides, and practical examples on ensuring higher yield and environmental sustainability, written by university professors, young students, trainees, research institutions and agronomists. It’s the only user-generated agricultural library in the world translated into 17 languages. Within a few years of operations, it has attracted millions of farmers from India to Brazil and US to Europe. The Food and Agriculture Organisation of the United Nations referred to it as the “Wikipedia of Farming”.
Searches for products are increasingly moving away from Google towards specialised websites: Amazon for retail, Skyscanner for flights, and Booking and Kayak for travel. We aim to be the go-to site for every question for agriculture.
You also decided to build a B2B marketplace to help farmers get direct access to the global market.
IS: Yes. Soon after we launched the library, we realised that agriculture was the least digitised industry due to legislation and relatively low internet penetration among farmers. In many cases, 7-8 intermediaries were involved in a transaction between farmers and businesses that buy their products (food processing companies, wholesale importers and exporters, supermarkets, hotels, restaurant chains, etc.), with farmers capturing only ~ 20% of the value. For buyers, purchasing was often complicated, with low credit flexibility and a high % of fraud. This led to a lack of trust in suppliers and the need for logistics optimisations to ensure quality control.
Therefore, taking into advantage the large number of farmers already coming to our library, we decided to build a marketplace to help them sell their products, bringing together an encyclopedia with a B2B marketplace. We launched this in December 2019, right before the pandemic hit. To some extent, we rode the tailwinds of many farmers forced to go online to sell their products during the lockdowns. This was a pivotal moment for the digitisation of the whole sector.
Our marketplace has over 4,000 B2B buyers who can purchase products safely, transparently and efficiently from 14,000 suppliers. We have recorded over 19,000 interactions between sellers and buyers with 30,000 transactions.
In the “chicken and egg” problem that marketplaces typically face, you first cracked supply through the library. But often, marketplaces fail, sooner or later, due to structural industry reasons. Why is agriculture a good fit for a B2B marketplace?
IS: In the early days, most marketplaces face the following: “Should I first kickstart growth in demand or supply?”. In our case, farmers had a clear reason to visit the library and already trusted us, so converting them to marketplace sellers was relatively straightforward. We think there’s fertile ground for a B2B marketplace in the agricultural industry for the following reasons:
Fragmentation of supply. Industries, where the power is concentrated in the hands of a few players on either side of the network are usually not a great fit for scalable B2B marketplaces. In agriculture, although in certain countries a few large companies and cooperatives control the supply, things are very different in Greece, Italy and Spain, where we currently focus, and the supply primarily originates from numerous small and medium farmers.
Local inefficiencies. Every year there’s a disruption in the production of specific goods caused by the weather, labour issues, drought, wars, hail, etc., leading buyers and sellers to form new partnerships, even cross-border. For instance, last year, the production of olive oil in Spain was affected due to drought; hence many B2B buyers globally sought new suppliers and used Wikifarmer to discover and purchase from countries such as Greece.
Lack of digitisation. Most farmers don’t have an online presence. You can only find them through special catalogues or local exhibitions. Through our platform, they get a digital storefront and become discoverable worldwide.
Lack of transparency. There are not much public data on the prices and availability of agricultural goods. The fewer the available data, the more critical the role of a marketplace in that industry. For instance, a buyer doesn’t know the price of olive oil across the Greek market, as there’s no unique price point.
What are the key ingredients to grow the demand side and attract business buyers?
IS: I think demand works mainly on the basis of convenience: Save time for buyers and deliver what is expected at the right time. On average, Wikifarmer buyers purchase anything between €1,000 and €50,000 in products per order and range from food processing companies looking for raw products to create juices or other products to wholesale importers and exporters, grocery stores, and hotels to restaurants. To facilitate them, we increasingly act as a merchant of record in all transactions — we purchase the product from the farmer and then sell it to the buyer — to ensure quality, payment, delivery, etc. In fact, financing has been a key reason why large buyers are used to purchasing from intermediaries, as small and medium farmers cannot afford to get paid with 60 or 90 days’ credit.
Through our platform, buyers can work with a variety of farmers, something that previously required enormous effort from their side. Think that it would take 2-3 days just to negotiate with a dozen of farmers to order a few products. We aim to make the whole process even more efficient with an online purchasing assistant that collects the best product offers at the best prices.
Before we wrap up, what’s the decision-making process for introducing new product categories and seller countries?
IS: For now, marketplace sellers are based in three countries. We started in Greece and later expanded to other Mediterranean countries such as Italy and Spain. All three present high fragmentation of supply and market inefficiencies, and they are big markets located within the EU. Hence, dealing with logistics, legislation, and customs is quite straightforward. Though, buyers are more geographically dispersed (South and Central Europe, Nordics, US, etc.), so cultivating trust in both parties is critical as a lot of transactions are cross-border.
Regarding the selection of product categories, we consider things like demand, market fragmentation, and at the same time, goods that are produced across the countries we mentioned and where the Mediterranean is the leader in production. Farmers on Wikifarmer mainly sell “non-commoditised” products (i.e. not those listed on commodity markets, e.g. wheat or soy) such as fruits, vegetables and some packaged goods from the Mediterranean area, like olive oil, olives, honey and pasta.
Thank you, Ilia. It was great to talk to you.
IS: Thanks, Alex. We have a busy roadmap ahead, so if you want to help democratise agriculture, take a look at our open job positions. We’re hiring!
Check out job openings from Greek startups hiring in Greece, abroad, and remotely.
We’re hiring a VP of Finance at Marathon VC to join us and streamline fund operations, reporting, and compliance. Apply here.
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Anodyne Nanotech, a preclinical-stage biotech company developing transdermal forms of drugs, raised $2.25m.
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Investments from the Hellenic Business Angels Network in over ten startups, here’s the list.
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Maximising product-led growth with Konstantinos Giamalis, CPO at efood. (link)
Addressing hallucination in generative AI by Matina Thomaidou, VP Data Science at Dataseat. (link)
Thoughts on pragmatic product management by Joseph Alvertis, VP Product at TileDB. (link)
A journey from backend engineer to data engineer with Ioannis Foukarakis, Senior Data Engineer at Mattermost. (link)
The story of a cybersecurity startup from Cyprus to Y Combinator with Maria Terzi, co-founder & CEO of Malloc. (link)
Apple VisionPro's EyeSight may be a killer feature by Panayotis Vryonis from WeatherXM. (link)
Feature engineering for machine learning by Vasileios Tsakalos, Senior AI Developer at UBS. (link)
“2nd Patras AI meetup” by Patras AI Meetup on Jun 11
“Elastic - Gitpod | Greece User Group Meetup” by Elastic Greece on Jun 14
“Neuromorphic Photonics & Applications” on Jul 13 / 14
If you’re new to Startup Pirate, you can find previous posts here.
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