Three-year-old agritech startup Vegrow’s gross merchandise value (GMV) has grown at a rapid clip in the fiscal year ending March 2022. This is evident from its gross collection which blew 8.54X to Rs 100.83 crore in FY22, according to the company’s annual financial statement with the Registrar of Companies (RoC).
Vegrow is a tech-enabled B2B marketplace that partners with farmers to aggregate supply and sell to organized demand through partnerships. The sale of produce was the sole source of gross revenue for the Bengaluru-based company in FY22.
It also made Rs 2.07 crore from interest on fixed deposits and gain on sale of current investment during FY22.
Procurement of produce was the largest cost center for Vegrow which formed 72.2% of the overall expenditure. This cost shot up 8.3X to Rs 95.79 crore in FY22 from Rs 11.47 crore in FY21.
Transportation and employee benefit costs ballooned 14.4X and 5.2X to Rs 16.36 crore and Rs 13.45 crore respectively during FY22. It also incurred Rs 1.46 crore and Rs 2.08 crore on legal and professional charges besides traveling which pushed overall costs by 7.9X to Rs 132.6 crore in FY22 from Rs 16.61 crore in FY21.
While chasing scale like any other growth-stage company, losses for Vegrow mounted 6X to Rs 29.7 crore in FY22 from Rs 4.79 crore in FY21. Its ROCE and EBITDA margin stood at -36.18% and -28.09% respectively. On a unit level, the company spent Rs 1.32 to earn a single unit of operating revenue.
Vegrow is part of a cohort of agritech forms enjoying a golden run of high growth and solid investor backing since 2020. The new confidence in these firms is based on a real improvement in hard infrastructure, a growing urban market for fresh produce and new niches like organic etc.
The biggest challenge remains finding high margin segments , as official policy seeks to ensure a fair share for farmers. Firms that can manage this balance successfully will be the ones that enjoy a successful run without any rude shocks or blowback from the ‘systam’