Agritech Startup Origo Commodities Raises $10.9 Mn Funding

Gurugram-based Origo Commodities, which offers post-harvest management services for agricultural commodities, has raised $10.9 Mn (INR 80 Cr) funding from impact investors such as Netherlands-based Oikocredit, Triodos Investment Management, and Caspian SME Impact Fund IV.

Bengaluru-based financial advisory firm Unitus Capital acted as the exclusive financial advisor for the transaction.

“Origo’s business model allows it to serve all participants in the agriculture value chain. With our investment, we aim to support Origo in creating a positive impact within this value chain,” Oikocredit equity officer Anirudh Sarda said in a statement.

Origo Commodities was founded in 2010 by Mayank Dhanuka and Sunoor Kaul. The platform provides post-harvest agriculture supply chain financing and logistics solutions. The company manages agriculture commodities of approximately $1.09 Bn (INR 8K Cr) across 12 states.

Its services also include Origo Finance, a subsidiary of Origo which offers lending products including warehouse receipt finance, procurement finance, and MSME finance.

“We look forward to leveraging our investors’ experience to further Origo’s growth to strengthen our product and our reach to people in need of financing and logistics solutions,” Dhanuka and Kaul said in a statement.

Development Of Agritech Industry In India

Agriculture, which provides employment to about 60% of the population, is one of the pillars of the Indian economy. According to the IBEF, the Gross Value Added (GVA) by agriculture, forestry, and fishing combined is estimated at INR 17.67 Tn (US$ 274.23 Bn) in FY18.

But many problems plague the sector, bringing down productivity and farmer incomes. With a view to disrupting the domain, many startups are trying to bring technological innovation to solve its problems, giving rise to the agritech sector in the country.

Here are some fast facts about India’s growing agritech sector and emerging startups:

• An Inc42 Datalabs report said that around $36 Mn was invested in 15 agritech startups in 2017. Of these, Pune-based agritech startup AgroStar raised the highest funding of $10 Mn led by Accel India in March 2017.
• According to a June 2018 NASSCOM report, India continued to be among top six countries globally with the most deals in agritech as of 2016. The other top countries were the US, Canada, the UK, Israel, and France.
• A report by Accenture said that the digital agriculture services market is predicted to hit $4.55 Bn by 2020.
• At the same time, notable players in the industry are Crofarm, Aarav Unmanned Systems, Aibono, Gobasco, Intello Labs among many others.
• In May, Pune-based agritech startup EarthFood raised seed funding round of $949K (INR 6.4 Cr) from Rairah Corporation.
• Omnivore Partners, Future Venture Capital Company Ltd (FVCCL), IDG Ventures, Accel Partners, Aspada Investments, IvyCap Ventures, and Unitus Seed Fund are active investors in the agritech space.

Despite the problems, things are looking up for the agricultural industry in India. According to the Inc42 Datalabs report, the size of agriculture and allied activities in India underwent a near-100% growth between FY14 and FY15. Besides, agricultural exports increased from $24.7 Bn in 2011-12 to $32.08 Bn in 2015-16 — a CAGR of more than 6.75%.

The central and state governments are proactively pursuing policies to improve farmers’ lives in India. Prime Minister Narendra Modi even announced that his government aims to double the average income of farmers by 2022.

With increasing interest from startups and investors to develop the space along with the government’s aid to improve the lives of farmers in India, the agricultural industry is all set to witness the next generation of digitalised growth.