Venture capitals interest in agritech startups has spiked since the beginning of this year. About half a dozen startups focusing on supply chain and optimising output for farmers have raised close to $45 million from institutional investors.
Companies including Clover, Arya, DeHaat and Bijak received backing from VCs such as Sequoia Capital, Omidyar Network, Surge and several individual investors. Joining the list of these companies, Kamatan Farm Tech has also raised Rs 10.5 crore from Global Innovation Fund (GIF) and Elevar M-III Equity.
According to regulatory filings, the London-based GIF has led the round in Kamatan with Rs 8.5 crore while Rs 2.5 crore has come from Elevar M-III Equity. Kamatan is a Bengaluru-based farm to retail startup. It works with retailers and brands such as ITC, Cargill and Gujrat Ambuja, amongst others.
Apart from a fresh infusion of funds, Clover has also appointed Mark Kahn, managing partner of Omnivore Partners and Vikram Suhas Godse, managing partner at Mayfield to its board of directors.
Another Bengaluru-based agritech startup focusing on a demand-backed supply chain for perishables — Clover also has raised fresh debt funds. It raised non-convertible debentures (NCDs) worth Rs 7 crore from Alteria Capital at a coupon rate of 14.6%, shows the company’s regulatory filings.
The fresh capital infusion for both companies has come after a week of Bijak’s $12 million pre-Series A round from over half a dozen investors including existing investors Sequoia-owned Surge Ventures and Omidyar Network.
Entrackr had exclusively reported Bijak’s new round earlier this month.
Patna-based online marketplace for farm services and products DeHaat also scooped up $12 million from Sequoia at the start of this month. Delhi-headquartered Arya secured $6 million in pre-Series B financing round from existing investors Omnivore and LGT Lightstone Aspada.
The increased interest of investors in agritech startups is encouraging for the sectors as the supply of fresh vegetables and fruits hit a snag due to lockdown and fear of Covid-19 pandemic. Due to the ongoing lockdown, a major impact was felt in the food supply chain because of disruption in logistics and scarcity of contractual labour employed in agricultural farms.
“The pandemic has brought these startups in limelight and more companies in the space are likely to raise more capital in the near future,” said an investment banker who is working with a couple of startups to raise funds for them. He requested not to be named. “We see an uptick in appetite to back agri-tech startups from investors as other businesses haven’t been able to operate because of the pandemic. Justifying transactions in other segments due to the uncertainty of the current crisis is negligible.”
Apart from the interest of investors from small cheques, we also have seen large funding in companies including Ninjacart. The poster-boy in the sector had raised $100 million from US-based hedge fund Tiger Global. It also got backing from Walmart. Other scaled startups in the space include Chennai-based Waycool and Pravega VC-backed Crofarm.