The DeHaat team. Photo credit: DeHaat

UPDATE: Sequoia joins AgFunder portfolio co DeHaat’s $12m Series B to get India’s farmers to market

April 6, 2020

UPDATED April 26, 22:50 EST, with comments from investors and DeHaat’s CEO on the funding and Covid-19’s impact.

Indian ag marketplace DeHaat has raised $12 million in a Series B round led by Sequoia Capital India. Netherlands development bank FMO also participated in the round, alongside existing investors Omnivore and AgFunder (disclosure: AgFunder is AFN‘s parent company).

DeHaat provides “full-stack agricultural services” to farmers. It helps them to buy inputs, offers customized advisory and financial services, and links them to retailers and markets in order to sell their produce.

Located in rural areas across India, the startup’s network of 443 retail centers handle last-mile distribution of agri inputs purchased by farmers, as well as the collection of their produce for onward sale.

Covid-19 smallholder impact

India’s agriculture sector is made up of an estimated 100 million smallholder farmers, and is worth more than $350 billion to the country’s economy, according to Sequoia. About 58% of the population relies on agriculture to earn a living.


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At a time of restricted movement for most people globally as governments try to get to grips with the Covid-19 pandemic, small-scale farmers like those in India – which has instituted a strict lockdown – are subject to specific challenges, according to the International Fund for Agricultural Development (IFAD).

“These rural producers are particularly exposed to the impacts of Covid-19. Access to healthcare, medicine, water, and sanitation is often inadequate in rural areas of developing countries, where more than three-quarters of the world’s poorest and hungriest people live, depending on agriculture for their livelihoods,” wrote the agency in a recent note.

“Over and above the impacts of the virus itself, interruptions in input supply – for example, seeds – and difficulties in accessing markets, as a result of restrictions of movement and border closures, are already threatening the livelihoods of small-scale farmers.”

IFAD added that both government and the private sector need to work together to make sure that smallholders can make it through the crisis, and specifically referenced “ensuring inputs such as seeds and fertilizer continue to get through to farmers, taking measures to ensure that local markets function, maintaining rural financial services and credit and strengthening information platforms.”

“Mixed” demand amid pandemic

Shashank Kumar, DeHaat’s co-founder and CEO, tells AFN that amid the limited mobility brought about by Covid-19 containment measures the startup has experienced increased traction on its platform.

“To leverage the current scenario, and considering overall everyone’s spending more time on digital interfaces, we have started a campaign of live Facebook sessions, video calls between farmers and scientists, and online forums with farmers. This is mostly to maximise farmers’ engagement with DeHaat,” he says.

Kumar says that demand from output buyers has been “mixed,” with corn feeling the knock-on effect of low demand from the poultry industry, while the call for fruit and vegetables has become “very high.”

“In the longer run, beyond this lockdown stage, we are foreseeing impact of agri commodity prices as well as availability of agro-chemicals, and we are working on the right forecasting of [this],” he adds.

Scaling up

In a statement, DeHaat said the Series A capital will be used to scale up to 2,000 rural retail centers by 2021. In the same timeframe, it wants to up its customer base from the 210,000 farmers it currently serves across the states of Bihar, Jharkand, Odisha, and Uttar Pradesh to 1 million.

This bold ambition is a key reason for DeHaat’s continued success, says AgFunder founding partner Michael Dean. “DeHaat continues to go from strength to strength and it is testimony to Shashank and the whole DeHaat team that they have been able to convert their vision and focus on rapid growth to become the preeminent supply chain player in India”.

Mark Kahn, managing partner at Omnivore, tells AFN that the startup “is well positioned to help farmers manage the Covid-19 related disruptions to the agri value chain. Farmers are struggling to find markets for their crops and DeHaat’s deep expertise facilitating market linkages is the need of the hour.”

The funding will also help DeHaat to further automate its operations and build out its data analytics capabilities to enhance efficiency.

“Automation of the supply chain will help us to bring 100% transparency for all agribusiness companies. This will further help us to maximize revenue through adding more crops for aggregation, or more input products for last-mile distribution,” Kumar tells AFN.

3.5x growth

At time of publication, DeHaat provides more than 3,000 agricultural inputs. It also offers AI-based crop advisory content – covering topics such as pest and disease management – through its mobile app and call centers. On the supply side, it amasses cereals, fruits, and vegetables from its farmers, selling produce directly to 200-plus bulk buyers such as retail chains, e-commerce portals, and FMCG companies.

Kumar explains that DeHaat doesn’t charge farmers for its crop advisory services, but “generate[s] revenue in case of any other transaction related to agri input, market linkage of produce, or financial services.” The startup claims its revenue has grown 3.5x over the past 12 months.

Farmers that want to join DeHaat’s platform either download its mobile app or give a missed call to the startup’s toll-free phone number.

“From the very first day of enrolment, they start getting customised crop advisory alerts on their phone and subsequently they use the same channel to place other queries or demands related to input or output linkage,” Kumar says.

Farmers that sign up see “an overall 50% increment in their net income from agriculture, including a 15-20% jump in the yield due to timely and customized advisory,” he adds.

Explaining his firm’s decision to back DeHaat, Abhishek Mohan, vice president at Sequoia India, said in a statement that India’s agricultural industry “is on the brink of a massive transformation with ease of regulation, farmers getting organized, and increasing smartphone penetration.”

He continued, “DeHaat is leveraging these trends to build the next-gen product in agricultural supply chain […] The tipping point that led to [our] decision to partner with them was the field visit, where the farmers expressed how proud they were to be associated with a platform they felt truly worked in their favor.”

In March 2019, DeHaat raised $4 million in Series A funding from Omnivore and AgFunder. It secured close to $3 million in venture debt funding the following May from Trifecta Capital.

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