Agritech focussed venture capital firm Omnivore Partners has announced the first close of its second fund at $46 Mn. As per reports, the amount was raised from a clutch of investors, including SIDBI, RBL Bank, Sorenson Impact Foundation, Dutch Good Growth Fund (DGGF) and The Rockefeller Foundation, among others.
US-based single-family office Ceniarth and German government-run development bank KfW also participated in the round.
According to sources close to the development, the VC firm is aiming to make the final close of the second fund at $75 Mn (INR 500 Cr) by August 2018.
Commenting on the development, Omnivore Partners co-founder Jinesh Shah told ET, “We are looking to invest in 18 to 20 startups over a 4 to 4.5-year timeline. We are on the verge of finalising our first two investments from the second fund by the end of March.”
As stated by Shah, the investment firm will be backing Seed funded and Series A stage tech startups that are working in different agricultural sub-sectors, apart from food, nutrition, farmer and rural development-centric innovation.
Under farmer-focussed innovations, for instance, the startups could specialise in logistics and storage solutions, energy and water solutions, farm automation as well as financial inclusion, Jinesh further stated.
On the latest fundraise, the other co-founder of Omnivore Partners, Mark Kahn, added, “In our first fund, it was 100% domestic investors. For the first close of our second fund, we deliberately chose to focus on raising funds from foreign investors. The value add they bring includes defining and measuring impact, focus on environmental and government policies.”
For the second half of the fund, Omnivore Partners is planning to reach out to domestic and existing investors, with the goal of achieving a 50-50 split between domestic and foreign investors.
Shah went on to say, “It takes a longer period of time to invest for foreign investors and for governance reasons, they prefer to be part of the first close of a fund.”
About Omnivore Partners: How It Is Helping Indian Agritech Startups
Godrej Group, one of India’s leading conglomerate, set up the VC firm Omnivore Partners in 2010 to invest in agricultural technology startups and innovations. At that point, the Mumbai-headquartered firm was targeted to reach a $50 Mn fund and started raising funds from August 2011.
Between 2012 and 2013, the investment firm raised around $40.4 Mn (INR 260 Cr) for its first fund, which was used to back 12 agritech and foodtech startups.
Among them are IoT startup Stellapps; Ecozen, which develops solar-powered cold storage units for farmers and weather forecast solutions provider Skymet. Later on, Omnivore made a partial exit from both Skymet and Stellapps.
Post that, in August 2015 reports surfaced that Omnivore Partners was looking to raise its second fund of almost $50 Mn. Around June 2016, Omnivore Capital received the regulatory approval to float its second fund.
As claimed by Omnivore co-founders Jinesh and Mark, more than 5.2 Mn Indian farmers have used products and services developed by the firm’s portfolio companies till date. Omnivore Partners also achieved 7th rank in the ‘Most Active Agri-tech Investors’ list of 2012-2016, released by CB Insights in March 2017.
A Look At Other Investors Active In The Indian Agritech Space
With more than 58% of the rural population relying on agriculture for sustenance, India currently ranks second globally in terms of farm output. According to Inc42 Datalabs, the size of agriculture and allied activities in the country underwent a near-100% growth between FY14 and FY15. Agricultural exports increased from $24.7 Bn in 2011-12 to $32.08 Bn in 2015-16; a CAGR growth of more than 6.75%.
Around $36 Mn was invested in 15 startups in the space in 2017, as per Inc42 DataLabs. Out of these, Pune-based agritech startup AgroStar raised the highest funding of $10 Mn led by Accel India in March last year.
Mirroring Agrostar in its funding amount was Noida-based EM3 Agri Services, which offers pay-per-use farm services for every step of the cultivation process. The startup raised $10 Mn in a Series B funding round led by Global Innovation Fund (GIF) in August 2017.
Following closely was Bengaluru-based B2B agritech startup, Farm Taaza, that raised $8 Mn Series A funding in a round led by Epsilon Venture Partners in October.
Apart from Omnivore Partners, investors that are active in the agritech space include Future Venture Capital Company Ltd. (FVCCL), IDG Venture, Accel Partners, Aspada Investments, IvyCap Ventures, Unitus Seed Fund, Rabo Equity Advisors, SAIF Partners, Villgro Innovations Foundation, Qualcomm Ventures and IDFC.
With Omnivore Partners having made the first close of its second fund, it remains to be seen how the firm will utilise the capital to empower agritech startups that are working on rural innovations.