Chiratae invests Rs 23.5 Cr in Patna-based agritech startup Ergos

Agritech startups have had a good run in 2020 with half a dozen companies such as Clover, Arya, DeHaat, Kamatan Farm and Bijak raising close to $70 million in total funding. Patna-based Ergos had announced an investment of Rs 35 crore in its Series A round from Avishkar Bharat Fund(ABF) in April. The company had allotted convertible debentures worth Rs 20 crore to ABF earlier this year.

Now the company has topped its Series A round with an infusion of  Rs 23.5 crore and Rs 15 crore from Chiratae Ventures and ABF respectively, taking the total funding in Series A round to Rs 58.5 crore. Ergos has allotted 427,250 Series A preference shares at Rs 901.11 per share and the convertible debentures held by ABF have also been converted into 221,861 Series A preference shares.

As per Fintrackr’s estimate, the Ergos has been valued around Rs 134-136 crore or $18-19 million post allotment.

Following the allotment of shares, Chiratae holds 17.6% in Ergos while Avishkar Bharat Fund has 26.22% stake in the company. Founders Kishore Kumar Jha, Praveen Kumar and Priyanka Kumari hold 12.84%, 7.2% and 1.48% stake respectively.  

Ergos acts as a grain bank that enables farmers to convert their grains into tradable assets, avail credit against their stored produce via NBFCs and Banks, and get better prices for their produce.

The five-year-old venture was backed by Avishkar in 2016 when it was in the ideation stage. At present, Ergos claims to have close to 30,000 farmers registered on the platform who have sold Rs 125 crore worth produce. 

The increasing interest of investors in agritech and supply chain startups is encouraging for the sector as the supply of grains hit a snag due to pandemic. Apart from investment in early-stage startups, the segment also saw large funding in Ninjacart. Last year, it raised $90 million from US-based hedge fund Tiger Global. 

Ninjacart also got backing from Walmart. Other notable startups in the agritech space include Chennai-based Waycool and Pravega VC-backed Crofarm.