Has Roots become the ‘Afterpay’ of the agricultural industry?
Having recently raised $2.5 million, illustrating investor interest in the company, Roots Sustainable Agricultural Technologies Limited (ASX:ROO) has now executed a strategic agreement with major retail and marketing company Amir Marketing and Investing in Agriculture Ltd, (Amir) to promote and sell ROO’s proprietary Root Zone Temperature Optimisation (RZTO) technology in Israel.
The agreement also includes a ‘Buy Now – Pay Later’ component, which will lower the barriers of entry for farmers and expedite uptake.
ROO is based in Israel, and the group has developed proprietary know-how and patents to bring maximum benefit to farmers through their two-in-one root zone heating and cooling technology and off the grid irrigation by condensation technology.
Amir sells a wide range of agricultural products and solutions to private farmers and agricultural businesses in Israel. The group has 25 retail stores and trade centres across all major agricultural areas in the country and service approximately 7,500 customers per annum.
Under the agreement, Amir will promote the ROO’s RZTO technology in its 25 stores and offer a ‘Buy Now - Pay Later’ plan, which will allow consumers to spread payments for the technology over 12 to 24 months.
Amir will be responsible for cash collections and will make payments to ROO up to 60 days from the signing of a purchase order.
The offer is already gaining traction with a first sale valued at A$14,300 for an RZTO system sold to a Peonies grower in North Israel recently installed.
Buy now-pay later offer to assist in entering new markets
This development marks one of the first ‘Buy Now - Pay Later’ plans introduced into the agriculture sector and highlights the company’s innovative approach towards business growth.
Roots is confident that the introduction of this payment plan will significantly decrease barriers of entry for consumers in Israel and expedite product uptake.
To further its global reach and drive product demand, Roots is pursuing additional agreements in international target markets with ‘Buy Now - Pay Later’ components.
Pleasingly, Roots is witnessing increasing demand for its RZTO technology in Israel, as well as in multiple international markets.
The company has an established in-country supply chain which can fulfil any orders from potential customers quickly and efficiently.
A good fit with traditional receivable terms in the agricultural industry
Commenting on the significance of this development, particularly in terms of optimising product accessibility, Roots executive chairman and chief executive, Boaz Wachtel said, “This agreement is a significant milestone for Roots and the agricultural sector more broadly, as it marks one of the first ‘Buy Now – Pay Later’ payment plans for consumers in the space.
“The agreement with Amir provides the company with another sales channel into the Israeli market, as well as visibility for our solutions in over 25 retail stores throughout the country at little expense.
‘’The payment agreement we have struck with Amir will make our technology much more accessible to farmers and other growers throughout Israel as the payment terms align well with farmers’ receivable terms.
“As the world continues to transitions to more ‘Buy Now – Pay Later’ plans for goods and services we will continue to pursue similar agreements with our distribution partners.
‘’We anticipate that this will assist in driving demand for our products in international markets.
Roots is well positioned with a strong supply chain and it has number of initiatives underway to drive sales domestically and in a number of international markets where RZTO is being well-received and accepted.
If Roots can achieve success in Israel using ‘Buy Now - Pay Later’ terms, the readily transferable model suggests the company can tailor this type of plan to other countries.