How Arya.ag Forged A Profitable Agritech Stack From Credit To Marketplace

Dr Verghese Kurien once averred that India’s economic rise would not come from capital alone, but from a blend of the experience of its rural people and the skill of its trained professionals. The words of wisdom from the man known as the Milkman of India and the person behind the ‘White Revolution’ echoed louder than whispers to Prasanna Rao and formed the intellectual foundation for Arya.Ag

The former banker went on to set up agritech startup Arya.ag in 2013 as a post-harvest platform that today runs a network of over 12,000 warehouses, aggregating and storing $3 Bn of grains a year, while enabling disbursement of over $1.5 Bn in loans, according to the company.

“Even today, repeating those lines of Kurien gives me goosebumps,” Rao said in a freewheeling chat with Inc42. “It fundamentally shaped how I think about building for rural India.”

In the 13 years, Arya.ag claims to have become “India’s largest integrated grain commerce platform” and flaunts a consolidated funding of $200 Mn after raising $80.5 Mn in a Series D round a few days ago. With its multiple revenue engines firing from all cylinders, Arya.ag aims for a public listing in the next two years.

Arya.ag helps farmers adopt tech-driven practices in pre and post-harvesting phase, and provides market linkage as the last-mile support to them. 

A Global Panorama On Rural Stage 

Kurien’s philosophy brought intellectual clarity to Rao’s worldview that was shaped much earlier. Born and raised in Jatni, a small town in Odisha’s Khurda district, Rao grew up immersed in an agricultural life. He saw farmers leaving for the fields at daybreak and returning only after sundown. 

As young Prasanna grew up, he witnessed the plight of the farmers with harvests being scorched in famine, produces rotting in lack of storage facilities, and poverty that they could never wriggle out of. The experiences gave birth to an ambition and Prasanna wanted to create something that would address the structural problems faced by farmers, and not surface-level inefficiencies. 

After completing his graduation, Rao studied rural and cooperative economics at the Institute of Rural Management Anand (IRMA). His professional grounding came at Amul, where he worked closely with farmer collectives. At Amul, he was inspired by Kuren’s success in driving institutional systems that could scale participation of farmers, without diluting the value. 

Gaps Spotted Through A Bank’s Prism

In 2003, ICICI Bank launched a commodity-backed financing vertical, lending to agri-enterprises against stored produce. Rao joined the initiative and eventually led the business.

What he encountered was a structurally sound idea constrained by executional limitations. Banks, he realised, were clustered around large agri-trading hubs such as Navi Mumbai, Yeshwantpur, Kota and Bikaner, while production itself occurred far from these centres. Branch infrastructure did not extend to harvest points. Credit assessment frameworks were rigid, and loan sizes were not aligned with the realities of the farmers.

“Banks view risk through a very different prism,” Rao said. “That framework doesn’t translate well to small, decentralised agri-businesses.”

At ICICI Bank, Rao regularly sanctioned loans of INR 2-2.5 Cr. But the farmers and aggregators needed a smaller, more flexible credit window, offering anything between INR 1 Lakh and INR 2 Cr. The mismatch between supply and need exposed a significant structural gap.

In the seven years at ICICI Bank, Rao also crossed paths with Anand Chandra and Chattanathan Devarajan, future cofounders of Arya.ag, though none could then imagine building a company together. Rao exited ICICI Bank to create something independently, but he wasn’t sure where to start until he stumbled upon Arya Collateral, a collateral management firm operating under the JM Baxi Group, two years later.

Rao recognised that a neutral collateral manager between banks and farmers could reduce the risks for lenders while also expanding the reach to a wider section of borrowers. In 2013, he acquired Arya Collateral using personal savings and funds raised from friends and family.

His boyhood experience and realisations later on came handy. “The thinking was very clear,” he said. “If you want to build a post-harvest ecosystem, warehousing has to sit at the core.”

The business initially focussed on managing warehouses for banks by helping farmers to store their produce there and use it as collateral. Arya Collateral soon expanded beyond ICICI Bank and tied up with IndusInd Bank, Kotak Mahindra Bank, Yes Bank, and Central Bank of India. The business turned profitable within the first year itself. 

And, the profit run continues, with FY21 being the only year when the company went into the red on a consolidated basis. 

 

Ownership Pivot Turned A Tough Task 

By 2015, Rao decided to move beyond managing third-party warehouses and start running them directly. Arya Collateral began leasing warehouses and offering storage services to farmers and farmer producer organisations (FPOs), with stored produce doubling up as loan collateral.

“This wasn’t an overnight decision,” Rao noted. “Collateral management gave us the operational capabilities to run the warehouse ourselves.”

The pivot served two strategic purposes. First, warehouse operations became a major revenue stream that continued to anchor the company’s topline. Second, direct operations brought Arya closer to farmers, offering them a deeper insight into post-harvest distress.

Storage also addressed a fundamental market failure. Farmers were forced to sell immediately after harvest, when prices were lowest because of oversupply. Warehousing allowed them to delay sales and exercise price discretion.

Arya scaled this model across Bihar, Karnataka, Rajasthan, Uttar Pradesh, and some major agri states. On the back of this expansion, the startup raised its first institutional round of $2.4 Mn from Aspada Investment Company in 2016.

Financing Foray Hit The Next Hurdle 

Liquidity turned out to be the next bottleneck as Arya’s warehouse network grew to 300-400 locations within two years. Instead of owning the properties, the company took the warehouses on lease. “Farmers sell early because they need cash, not because they want to. Our next challenge was to solve liquidity, and storage adoption,” Rao said. 

In 2018, Arya secured an NBFC licence and launched Aryadhan Financial Services. The model was tightly integrated, where farmers stored their produce in Arya Warehouses and borrowed against it.

While Aryadhan’s interest levy of around 13% is marginally higher than bank loans, it is significantly lower than the 16-25% typically charged by non-bank financiers. More importantly, Aryadhan offered flexible ticket sizes and operated directly at harvest locations, not from distant agri hubs.

Aryadhan today provides loans ranging from INR 1 Lakh to INR 2 Cr. The financing vertical accelerated growth, helping Arya cross INR 100 Cr in revenue in FY20. The company reported INR 130 Cr in revenue that year, along with a profit of INR 2 Cr. The startup ended FY25 with a topline of INR 425 Cr and a bottomline of INR 32 Cr.

The integration also reduced customer acquisition costs. A farmer using storage naturally transitions to credit, with warehouses acting as de facto branch infrastructure. 

Market Linkage Completes The Stack

With the storage and financing resolved, market linkage turned out to be the final layer. “For us, this was a natural progression. Once you control storage and credit, enabling discovery and sale is inevitable,” Rao said.

In 2021, Arya rolled out Aryatech Private Limited, a marketplace connecting farmers, FPOs, and buyers. The expansion paved the way for fresh funds and the company raised $42 Mn from LR India Holdings, Lightrock Growth Fund, and Accion Quona.

The group soon reorganised itself under a single holding structure, Arya.ag, housing three verticals – Arya Collateral, Aryadhan Financial Services, and Aryatech Private Limited. The operating logic remained consistent: layer new services on existing infrastructure to grow revenue without proportionate cost increases.

“If a farmer comes for warehousing, financing follows almost organically. And, because we don’t run branches, our cost structure stays lean,” explained the founder. 

Can Arya Annex The Road Ahead?

India’s $9 Bn agritech market is accelerating at 25% a year to reach $28 Bn in valuation by 2030, according to Inc42 and StarAgri’s Indian Agritech Market Landscape Report, 2025. In a $452 Bn agricultural economy, the numbers may appear incremental, but they mask a deeper shift that agritech is moving from scattered pilots to system-level infrastructure.

Against this backdrop, Arya.ag stands at a vantage position because the strongest momentum comes from platforms that connect farmers directly to markets, addressing long-standing inefficiencies in procurement and distribution. These supply-chain and market-linkage models are expected to account for over $12 Bn of the market by the end of the decade.

With an eye on the IPO, Arya.ag is now piloting additional services, including third-party logistics, for buyers and processing units near warehouse clusters. While still at an early stage, both the initiatives are designed to extract more value from editing assets.

“It’s still too early for us to comment on the IPO, but we are targeting for a potential IPO listing in the next 18-20 months,” Rao said. The company has also set aside a portion of the recent fund-raise for potential acquisitions aimed at bringing affordable technologies to its customers. 

Arya.ag competes in the farm management space with startups like StarAgri, DeHaat and AgroStar. Another competitor, BharatAgri, shut shop last November in dearth of external funding. In a market without any major competitor in the race, Arya.ag finds itself rather comfortably placed to sail with the raging wind.

Edited By Kumar Chatterjee