B2B agritech platform for fruits and vegetables, Vegrow has raised $13 Mn in a series A investment round co-led by Lightspeed Venture Partners and Elevation Capital. The round also saw participation from existing investors Matrix Partners India, Ankur Capital, Better Capital and Titan Capital.
Founded in 2020 IIT alumni Praneeth Kumar, Shobhit Jain, Mrudhukar Batchu and Kiran Naik, Vegrow has quickly scaled among both farmers and B2B customers, resulting in nearly 20x top-line growth with a presence in over 30 cities, the company claims. The company’s technology platform provides features and services for farm discovery, product quality profiling, market intelligence and matchmaking between farm-level inventory and customer requirements.
Commenting on the deal, Vaibhav Agrawal, partner, Lightspeed, added, “Having invested in commerce companies like Pinduoduo, OYO and Zetwerk we have realized that the number one pressing need of the small supplier, a farmer in this case, is higher revenue realization. It’s not accessing inputs, credit or crop advisory. Therefore, we believe companies building marketplaces between farmers and buyers, using technology to eliminate inefficiencies will have the largest market opportunity eventually. Additionally, many marketplaces have scaled up on negative unit margins in this category, so we were really impressed by the growth – and – positive unit margin Vegrow has demonstrated using its technology-oriented approach to standardize quality, minimize inventory and retain farmers.”
Ritu Verma, partner, Ankur Capital, added , “While Indian consumers and businesses have seen tremendous changes in the past 10 years through several waves of innovation, the reality is our fruits and vegetables are grown by independent farmers in a nearly identical manner, and with dwindling yields. Vegrow’s tech-enabled processes allow the company to grow their margins while also driving value to the farmers they work with.”
While India’s B2B agri market is attractive, it is also a complex maze of fragmented supply with over 120 Mn farmers growing across 30 states. When talking about this sector, Akarsh Shrivastava, vice president, Elevation Capital said “Agriculture as a sector has largely remained removed from digital disruptions, despite the strong tailwinds of increasing internet penetration and adoption. We believe any effort to digitize these value chains will have to keep farmers and their interests at the core. Vegrow’s farm-centred approach, coupled with strong insights, which are allowing the team to fundamentally re-imagine and augment these supply chains, stood out in our interactions. Super thrilled to be a part of this mission-driven team as they create access and value for millions of farmers.”
With 58% of the population dependent on agriculture, India is a largely an agrarian economy, and the growth potential of agritech is immense in the country. Recently, several agritech startups such as Otipy, Farmart, and UrbanKisaan raised funding from prominent investors.
India’s agritech market is estimated to reach $24.1Bn by 2025, as per Inc42 Plus analysis. Our latest report titled India’s Agritech Market Landscape Report, 2021 delves into this emerging agritech landscape and finds out what is driving the revenue in this sector.