How Agroop CEO Bruno Fonseca grew to $452.7K revenue and 60 customers in 2024.

hello everyone my guest today is bruno fonseca he is an ambitious tech entrepreneur building in the technology building a technological solution a technological solution for crop monitoring bruno are you ready to take us to the top yeah okay what does that mean technological solution for crop monitoring uh so basically it's a technological solution a very scalable um one uh basically to help farmers in two in two fronts basically we want to help farmers to monitoring their crops water needs in the more efficient way and we want also to help them to monitor to monitor and to prevent some risk factors like pests diseases or fungus so basically these are two this our these are our two value propositions and what does the technology do so so i'm a farmer i sign up i install you call it the stuke sensor i installed the stooq sensor or stock sensor on my farm then what exactly so basically we we develop a very innovative sensor called stuk so basically it's a sensor that can collect the iot device that can collect uh five different parameters uh solar radiation air humidity air temperature soil temperature and soil moisture so and then bases on that parameters we are we build some algorithms exactly to allow our customers using uh through the use of our app to to understand exactly the water needs of their crops and also to prevent some and to to to build some models to prevent some diseases so how many how many of these physical sensors do you have in the wild today how many have been deployed so at this at this point we have 120 more or less and how do you pay for those do you make the customer pay for the hardware or did you raise capital to fund the production which we charge we charge the stock this took the iot device uh one time fee of a price of one and one thousand euros okay and then we will charge also the customer for uh a software fee annual fee uh of 200 euros per year uh per each sensor okay basically do most people just buy one sensor it depends uh it will depends of the heteroandrogenity of the soil so if the soil will be different the texture the texture for us is very important so they put a sensor in an area that can be very representative of the specific area in the crop so how many i guess sorry what i'm trying to ask is how many farmers are you working with so there's 120 sensors deployed how many customers so basically one one customer has two sensors so it's more or less the the the the the half half of that so 50 55 customers more or less okay so so can i take you know 50 or 60 customers times 200 or 220 dollars because it's 200 euros eight you know annual contract value you're doing what about a thousand or 1200 bucks a month right now on revenue software only exactly exactly that's great so here here's what's interesting about this model you're seeing a lot of ag tech products taking off right now which have this kind of model where it's hardware up front and then there's software on the back end and the retention rates are typically through the roof because the farmer actually has to install the thing in the farm they never churn have you lost any customers until until until now uh we we we don't yeah that what i was saying is retention's typically through the roof once people actually install farmers to install the physical software so churns usually really really low um that's great so i mean look the next question is most most of these companies that pair some iot device plus software their number one priority is driving down the manufacturing costs of the physical component because then you can drive much wider adoption and charge more subscription fees what are your costs right now to produce one of these things and how do you plan to drive it down the cost down over time so until now the the the production cost is more or less for for 150 euros per sensor uh so the ideas of course with the with increase of our critical mass with the increase of our customer base that is to be able to to produce more sensors and of co of course the units units price will decrease with with that okay so what what volume do you have to hit to get the price down to 200 instead of 420 euros uh when uh which when you reach for example the 500 500 units uh that cost can decrease uh significantly i see okay so right now it's costing you 420 bucks to build one of these stock uh or stuke sensors you charge a thousand so you have a 580 essentially margin on that you've sold 120 so 120 times 580 that's like 70 000 bucks in cash which i'm assuming you're using to help fuel the growth of the company is that accurate exactly exactly for for the for for to support our of course our our operations costs operational costs but also to to support the next the development of a second product line because we are uh we are trying to develop a new a new sensor a new iot device to complement some of the parameters uh that are not being collected by the actual actual solution yeah so basically because um since we we we got to the market we reached the market we we start listening our customers of course and we felt that for example collecting the rainfall in the very localized way it's it's also very important so that is to develop a solution exactly to also to collect this kind of parameters sorry what kind of parameters uh rainfall uh wind direction wind speed for example oh i thought you said rainfall was already one of the five parameters you collect you don't collect that no no not we don't collect uh rainfall i see okay and help me understand growth so a year ago how much were you doing per month in terms of revenue yeah it's about this point seven seven thousand uh wait well right now you're doing about a thousand dollars per month correct seven thousand seven thousand per month well how do you get that number if you have 60 customers paying 200 a year that's 18 bucks a month 60 times 18 is about a grand a month right now no but we have to count with uh with uh the cost of the we are selling the the sensor so sorry sorry i'm just i just meant i just meant software avenue so a year ago just the software exactly just the software is about one thousand about one okay so the software revenue is about has been flat year over year why is that uh it's it's it's it's it's flat uh because of course uh what we are trying to do we are not so focused right now in the increase our customer base in a very aggressive way what we are trying to do is to also to validate the potential the scalability potential of the solution so what we are doing basically is to sell the sensors also to other markets and uh that for us is having significant significantly significant significant costs um bruno your ability to win this space is going to come down to distribution like how how can you get your sensor cheaply produced into the hands of millions of farmers how have you gotten your first 60 farmers and how do you plan to get the next 60 so basically we are we are trying to to to build a connection and to establish a connection with the with the four types of entities then that can be our channel so basically we are trying to contact uh agronomists uh advisory companies agricultural companies fertilizer companies and uh and farmers associations so basically we are trying to reach our our core targets the end customer the the youth the farmer through these channels so what we are doing right now we are selling we are identifying some of these entities basically we are mainly constituency companies advisory companies so we are selling we are using them as prescribers of our solution because our idea is to use this united group as a technological company just a technological company so we need to find economical uh consulting companies able to to to resell our products and make them the final the final contact with with that customer and bruno how do you incentivize these farmer associations and agronomists what kickback do you pay them uh basically we we allow them to to to have a margin a margin over the the product over the the sensor and then we are also sharing with well how much margin sorry it's 25 okay so 25 of the thousand euros exactly okay and then we are also uh uh sharing the presentation over the software fee of how much the recurring revenue model at 35 so it's more or less 70 euros per uh each fee interest because it's 200 or 200 euros for the year exactly yeah that okay so that's good so so i mean again it sounds like you know what your target is why why don't you have 30 of these groups signed up today like what's challenging about getting them to sell your software and your hardware i think that the biggest challenge right now is uh the fact that our company is not new in the market so we need to to build some some trust level uh with this kind of agents because for them it will be it will be very important to um to represent the products that they know that will work uh 100 so of course the the product is we are in the beginning so we have still some some things to improve uh so we need to build this kind of relation for a while and it takes always sometimes to to build this kind of trust uh so what's your team look like today and who's in charge of those relationships so we have a our team is constituted by 10 10 people working at full-time and basically we have two business developers uh responsible to to to have and to create that connection with the with the potential channels and potential potential partners and so how are you paying everyone because you're not doing a ton of revenue yet did you guys raise capital exactly we raised we raised capital we we were the first portuguese uh startup that um successfully completed uh uh not just one but three crowdfunding campaigns on cders oh great how much have you raised to date total uh more or less 800k oh wow okay i mean so you've had a pretty successful kickstarter kickstarter campaign then was it kickstarter or which what was the site it was a platform a crowdfunding equity platform called cedars cedar yeah from uk okay so there's 10 of you guys and where's everyone based is everyone in portugal yeah for now everyone is in in portugal that's great and then and then i mean you know you obviously have to manage your cash as you as you you know fund the team and the hardware costs and all that i assume you're burning capital right now is it accurate exactly can you share kind of a general arrangement are you burning like 10 grand a month 100 grand a month how how aggressive are you being so the the burden rate is of about 20 20k per month okay so that's that's not horrible you have plenty of runway what will it um in order to get your costs down i mean can you afford right now to just go in and buy you know 300 units of the hardware so you can get it at a cheaper price you know you'd have to obviously be certain you could then sell those and make a margin yeah definitely definitely we are thinking exactly on to undo that because this last year was a was a market fit so our idea was to to understand the traction of the product before uh developing a great uh great production line or a bigger one so yeah we now that we our we have more confidence in the traction of the product i think we will be more comfortable to to increase the order and to to produce more are you waiting to buy a big chunk at cheaper prices because you want to build in the rainwater measuring and the two you know the two other features first not really right now uh the focus is to to have more products like uh the one that we were selling this this uh the the morse tooks um and then the second phase will be that's that product because basically that problem product will complement the data collected by this one is this like a tesla where you can sell the hardware and then update the software whenever you want or every time you want to add a different measurement thing like rainfall do you have to update the actual hardware and reship at all no we we are thinking to to integrate uh some some parameters some of them i cannot talk about them right now for uh patent problem uh reasons uh we are trying to protect some some of our knowledge of course um but yeah the idea is exactly to to to allow to improve uh and take more advantages of the sensors just for uh over the year um upgrades yeah and and when did you found the company what year in 2014 august 2014 very good well listen we're rooting for you bruno let's wrap up here with the famous five number one what's your favorite business book um how to make friends and influence people number two is there a ceo you're following or studying right now sorry is there a ceo you're following or studying uh he's not a ceo but he's a very influenced guy um called simon sinek oh simon cynic yep number three um what is what billing tool do you use what billing tool do you use a building tool tool chilling billing for fees for payments we will use a stripe stripe okay number four how many hours of sleep do you get every night uh maybe six okay healthy and what's your situation married single kiddos uh singles married to the company and how uh and no kids no kids and how old are you bruno 32 32. last question what do you wish your 20 year old self knew sorry what's something you wish your 20 year old self knew uh um new uh i would i would like to uh to know uh how to measure attraction uh in the more in the less expensive way uh i would like to i would like to to know that guys there you have it wish you could measure attraction in a more efficient way launch the company group back in 2014 helping farmers really measure uh five parameters on the farm so they can grow crops more effectively currently you serve about 60 farmers that have deployed 120 of these kind of hardware measuring uh stations called stooqs they pay about a thousand bucks for the piece of hardware it costs bruno 450 bucks to produce he's looking at driving that cost down over time and then once they install the hardware they pay 200 euros or 220 usd per year for the software they're doing about 1100 bucks per month right now just in the software burning about 20 grand per month as they look to scale they got about 800 grand from crowdfunding campaigns which is fueling and funding their team of 10 in portugal as they look to scale bruno thank you for taking us to the top thank you