With an annual revenue run rate of $35.2 Mn (INR 250 Cr) and 20x expansion since last funding of $2.7 Mn in April 2017, Chennai-based WayCool Foods is set to explore the market further. The agritech startup has recently raised $16.9 Mn (INR 120 Cr) as a combination of equity and debt from LGT Impact, prominent angels, and institutional lenders, including Northern Arc Capital and Caspian.
The startup aims to use the funds to further scale-up operations across southern and western India, and bolster its technology platform. It further looks to reinforce its supply chain by building or acquiring assets and capabilities in sourcing, value-added products, and automation of distribution lines.
Veda Corporate Advisors acted as the exclusive financial advisor to WayCool for the fundraise. Kartik Srivatsa, Managing Partner at Aspada, and an earlier investor in WayCool said, “What impresses us most about WayCool is their execution capability. They have been able to scale rapidly and consistently by leveraging technology to build a high-quality supply chain despite market disturbances.”
WayCool: Looking At Agritech Revolution With High-Quality Phygital Assets
WayCool Foods is a notable agritech startup among the players such as Ninjacart, Vegfru, Lemon Leaf, DayBox, Crofarm, CropIn, Gold Farm and more. Founded in July 2015 by Karthik Jayaraman and Sanjay Dasari, it is essentially an omni-channel food distribution platform leveraging innovative technology to scale-up and operate a complex supply chain.
WayCool distributes fruits and vegetables to multiple end-use segments spanning small local shops, modern retail outlets. The startup has a retail presence currently in Chennai, through the SunnyBee brand, operating retail stores, mobile stores on trucks. In addition, there are a number of private label products that SunnyBee produces and brands through partnerships with sister companies.
The agritech startup aims to build a large food distribution business by leveraging cutting edge technology to create efficiencies and reduce information asymmetry in the supply chain, with high-quality phygital assets. The company operates a full-stack, broadline product range across multiple channels and categories like fresh produce, staples and dairy serving over 4,000 clients.
As claimed by the company over 70% of their tonnage is sourced directly from farmers and farming partners with 100% of payments made digitally in three to five days. Post the fundraise in April 2017, WayCool has expanded its operations to a total of 13 locations now.
As Karthik added “We are committed to solving India’s food supply chain problems while making a substantial positive difference to the farmers and consumers. As we continue scaling across product segments, geographies, and business lines, we will continue to raise funds but at the same time remain capital efficient and achieve quality, mature business at scale by carefully calibrating the stage of the business to the funding needs.”
Agritech Startups: Filling Gaps In The Industry
Rajat Gupta of cold chain logistics solution provider Tessol believes that there are huge gaps in the Indian food supply chain. As Inc42 noted in its ‘The State Of Indian Agritech report 2017′, an absence of an organised marketing structure for produce, malpractices in the existing unorganised agricultural markets, inadequate facilities for transportation and storage, scarcity of credit, and limited access to superior technology to get timely information are some of the many afflictions which obstruct the Indian agricultural sector.
This opens up a number of opportunities for the Indian agritech startups. While chasing its ambitious goal of doubling farm income by 2022, the Government of India is introducing a new AGRI-UDAAN programme to mentor startups and to enable them to connect with potential investors.
At the same time, the increase in investors interest has further brought in the ray of hope for the agritech startups. As agrifintech platform farMart’s cofounder and CEO Alekh Sanghera shared with Inc42, “In the last two years, we have seen many agritech companies find their feet and they are now beginning to scale rapidly. In terms of funding, we are beginning to see a lot of VC money coming in, with multiple companies raising $10+ Mn investment rounds in 2018. I believe the winds of change are here, as mainstream VC funds are looking at agritech sector as a serious sector for investment”
Overall, the Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales, according to a December 2018 report by IBEF.