Once overlooked, agritech startups are beginning to have a moment in India.
On Tuesday, DeHaat, an online platform that offers full-stack agricultural services to farmers, said it has raised $30 million in a new financing round as the Indian firm looks to maintain its accelerated growth despite the pandemic.
Prosus Ventures, formerly known as Naspers Ventures, led Patna and Gurgaon-based startup’s Series C financing round. RTP Global and existing investors Sequoia Capital India, FMO, Omnivore and AgFunder also participated in it, bringing the startup’s to-date raise to over $46 million. (Dexter Capital was the advisor for this funding round.)
One of the biggest challenges farmers in India face is securing agri-input items such as seeds and fertilizers and then finding buyers after producing the yields.
DeHaat, which is Hindi for village, is solving this by bringing brands, institutional financers and buyers to one platform, which is accessible through a helpline and an app in local languages.
Only about a third of the yields Indian farmers produce reaches the big markets, according to industry estimates. It’s traditionally proven immensely difficult for farmers to find buyers for their produce.
Once the season is over, DeHaat helps farmers sell their yields to bulk buyers such as business-to-business marketplace Udaan, Reliance Fresh, and food delivery firm Zomato.
The 10-year-old startup has also developed a database of crop tests and uses artificial intelligence to provide farmers with free-of-cost personalized advisory on what they should sow in a season. DeHaat also helps farmers secure working capital through partnership with hundreds of institutional firms.
We wrote about DeHaat last year, when it had raised a $12 million financing round. The past nine months has been the story of its accelerated growth despite the coronavirus pandemic, which prompted lockdowns across the nation for several months.
The startup, which today has presence in eastern part of India — states such as Bihar, Uttar Pradesh, Jharkhand, Odisha and West Bengal — serves close to 400,000 farmers, up from about 210,000 in April last year, Shashank Kumar, co-founder and chief executive of the startup, told News in an interview.
How the startup is tackling these challenges is equally impressive. It works with nearly 1,400 micro-entrepreneurs, up from about 400 last year, in rural areas who distribute over 4,000 types of agri-input goods to farmers from their regional hubs and then bring back the output to the same hub. “They are the ones responsible for last-mile delivery and aggregation,” he said.
DeHaat has grown on every front, including the revenue it clocks, which is up 3X to 3.5X since last year, he said.
“At the end of March, our daily volume out was around 200 metric tonne. Now it’s over 600 metric tonne. Everyday we aggregate this much from farmers and supply to FMCG players and modern retails. Similarly on the agri-input side — seed, fertilizers, and pesticide — we are processing close to 10,000 orders everyday, compared to about 2,600 in March of last year,” he said.
“Prosus Ventures invests in industries around the world where innovation can significantly address big societal needs,” said Ashutosh Sharma, Head of India Investments at Prosus Ventures, in a statement.
“DeHaat is catering to a massive market in India with the agriculture sector worth more than $350 billion to the country’s economy and consisting of an estimated 140 million+ farmers. Through its end-to-end agricultural services offerings, DeHaat will have a major societal impact in India, improving the earning potential for Indian farmers and overall yield for the sector while also enabling microentrepreneurs all over the country, including in rural areas where there is often less income opportunity,” he added.
The startup plans to deploy the fresh capital to expand to more states in India including Rajasthan, Madhya Pradesh, and Maharashtra and eventually serve 10 million farmers.
And another area where it intends to focus is hiring top tech talent. The startup has doubled its workforce since the past year, with many high-profile hires from major firms. The startup, which recently made its second acquisition, is also open to exploring more M&A opportunities, said DeHaat’s Shashank Kumar.
Once ignored, scores of agritech startups have cropped up in India in recent years — and many old startups are beginning to receive large-sized checks from investors.
Further reading: Omnivore and Accel recently co-authored a report on India’s agritech landscape.