Agri startup Utkal Tubers has raised $4.6 Mn (INR 30 Cr) from CapAleph Indian Millennium SME Fund and Zephyr Peacock India Fund. The early-stage startup, a potato seeds company, completed a year of operation in March 2017, producing 1,000 tonnes of potato seeds last year. This year it is targeting 5,000 tonnes.
The startup proposes to scale up the availability of local varieties through facilities that it has set up in Karnataka. It is also in the process of setting up facilities in Odisha, Gujarat, and Punjab.
The investment marks CapAleph Indian Millennium SME Fund’s first investment in the agri sector. George Thomas, founder of the fund said, “We are exploring startups in the food and agri business. We have raised a corpus of $10.8 Mn (INR 70 Cr) and will raise the balance $4.6 Mn (INR 30 Cr) by the end of June.”
CapAleph aims to deploy the fund over a two-year period in five to six startups that address issues related food productivity, wastage, and water scarcity, among other issues. As per George, the problem with potato seed production in India is its restriction to Punjab and it’s unavailability in states like Chattisgarh, Bihar, and Odisha which lack a seed production base.
He added that CapAleph has taken controlling interest in Utkal with this investment, with the hope of creating a good franchise for potato seeds, improve seed quality and variety in seed deficient states. Going forward, the fund plans to invest in a startup that focusses on hardy crops such as millets, jowar and bajra in its next funding round.
Utkal Tubers has been incubated by Zephyr Peacock last October. Zephyr Peacock is the India-focused PE fund of US-based Zephyr Management. Last April, the startup also signed a memorandum of understanding with Odisha to set up a research lab for tissue culture development and development farms in rural areas for seed multiplication.
Founded in 2016, the private limited company lists Mukul Gulati and George Thomas as its directors. It is also working with a European potato seed major to introduce new potato seed varieties that are suitable for non-traditional potato growing areas in India.
Last month, Zephyr Peacock had invested in ready-to-cook food solutions brand Fingerlix in its $3 Mn Series A funding. Other firms actively investing in the food agriculture and agritech space include SEAF India, Omnivore Capital, Rabo Equity, DSG Consumer Partners and Aspada. Last month, Chennai-based fresh-produce distribution startup WayCool secured $2.7 Mn from early-stage venture capital firm Aspada Investments. Pune-based agritech startup AgroStar, which is an mcommerce platform for agriculture raised $10 Mn Series B funding led by Accel India in March this year.
Early this month, in order to fuel the growth of innovative ideas in the agritech sector, Karnataka’s agriculture department has set aside about $1.5 Mn (INR 10 Cr) fund to be administered by the information technology and biotechnology (ITBT) department.
(This development was first reported in ET.)