Digital Marketplaces Tackle 3,000 Years of Agribusiness Inertia

For more than 3,000 years, the agriculture industry has been doing business manually. It started with stone tablets and still clings to last millennium’s paper documentation.

That ancient legacy makes it one of the toughest to digitize.

“It’s the world where IBM has a real different meaning — it stands for ‘It’s Better Manual,’” said DiMuto CEO Gary Loh.

That didn’t stop Loh from launching his company in 2019 to solve the industry pain points he encountered when his private equity family fund got involved with the industry by investing in a large apple producer.

Loh realized that the best way to turn this company around was to make it asset-light, turning it into an operation he characterized as “the Dole of Asia”— moving beyond apples to other produce.

The Messy Middle

One of the lessons he learned was the need to get rid of what he called “the messy middle.” The quality of perishable goods is always questionable, which means sellers don’t get paid, creating reconciliation nightmares. A certain amount of waste was thus built into the business. Given its narrow margins, even a single percentage point waste factor can cut margins by a third or more. The subjectivity of quality evaluations and risk of nonpayment made banks reluctant to fund producers.

DiMuto’s mission includes solving for that by ensuring unquestionable quality of goods delivered — and prompt payment.

The platform accomplishes this by using video of produce before packaging is sealed, digitizing it through the Internet of Things (IoT) using QR and bar codes, and consolidating invoices, bills of lading, and other formerly paper or emailed documentation associated with transactions on its trade solution platform.

The Black Hole

That initial solution to the messy middle was the offer that persuaded many old-fashioned produce businesses to get into the digital swing of things with DiMuto. The next layer DiMuto addressed is what Loh called “the black hole” that plagues cross-border payments.

“You could have a bank sending the money from Singapore to China,” he said. “On one side, the bank account shows that the funds were transferred, but on the other side, the bank says it hasn’t received it.”

DiMuto solved for this by using wallet-to-wallet payment rails to speed payments and ensure money flow visibility.

Trade Financing

Addressing the first and second layers of the business problem laid the groundwork for monetizing the business with the capstone of trade financing. DiMuto can assist the industry by lending money and ensuring that it is used for proper purposes.

Having addressed the initial key pillars of the digital transformation of the global produce industry — traceability, visibility and monetization — the next logical step was to capture the trading process itself. Thus, the fourth layer of the journey was to create a B2B eCommerce marketplace for the trade.

Loh compared the enterprise to automating the stock market, which was once a highly manual, paper-and-phone-based business.

“What we’re doing is like what the Ameritrades and Charles Schwabs of the world did for the financial markets,” he said. “I like to call it Alibaba on steroids.”

The marketplace includes a trade management system, insurance and financial services. The goal is to bring value to both buyers and sellers from end to end.

Room to Run

Loh said global fresh food is a $3 trillion-plus market. Since the firm has captured only a small share, there’s plenty of room to grow.

“We are very focused on the fruit and vegetable side,” Loh said. “We’re moving into livestock and seafood, but we’re really at the tip of the iceberg.”

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