Indian agrifood supply chain sensor startup AgNext Technologies has raised a $2 million pre-Series A round from early-stage, tech-focused VC firm Kalaari Capital to further expand its product portfolio and to aid in geographic expansion.
Kalaari joins existing investor Omnivore, the India-focused impact venture fund focused on agrifood startups. This round brings AgNext’s total funding to around $4 million, including a $2.1 million seed investment from Omnivore in April 2018.
Based in Chandigarh and launched in October 2016, the startup provides agricultural sensing solutions that collect spatial, temporal, and spectral data across the agricultural and food value chain, helping growers and food processors to improve their productivity, quality, and profitability. Its sensors collect data on a variety of production points like weather, pest management, soil management, crop analysis, produce quality analysis, and the farmer’s daily notes.
AgNext is currently focused on horticultural, floricultural, and plantation crops, as well as select row crops, with an initial customer base across India.
“This is one of those cases where it’s kind of exciting because there was no planned fundraising. We closed our round with AgNext and that basically got the company on the radar screen of some other VC funds who recognized how differentiated, interesting and innovative the company was,” Mark Kahn, managing partner at Omnivore, told AgFunderNews. “We are excited to have Kalaari join because it’s one of the most respected venture funds in India and one of the funds with the longest pedigrees.”
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
India has a rapidly growing population of 1.3 billion and is predicted to surpass China as the most populated country in the world by 2024. With billions of mouths to feed and a broken agricultural supply chain, innovation in the country’s agrifood industry is desperately needed.
Based on AgFunder & Omnivore’s recent India AgriFood Startup Investing Report, startups raised $1.7 billion in venture capital between 2013 and 2017, evidencing the growing startup ecosystem working to address the nation’s food system.
“India has a tremendously strong presence of Silicon Valley firms including key players like Softbank and Sequoia. There has been quite a bit of food tech investing in India, but upstream agtech was pretty much nascent until 2018,” Kahn explains. “There are a couple of pools of capital for fundraising including generalist VCs deep in the ecosystem, and impact funds where India is the largest single market for impact-related capital in the world.”
AgNext is hoping to offer a solution that can assist players in the pre- and post-harvest phases of India’s massive and complex food chain, from growers to downstream players including food processors, aggregators, and commodity traders. Hyperspectral imaging plays a key role in the startup’s technology through handheld devices that allow users to measure things like chemical content and composition in real-time.
“It primarily involves chemical analysis without using chemicals,” co-founder and CEO Taranjeet Bhamra told AgFunderNews. “Using light, we can find the compositions of produce, spices, animal feed, and other ag products. This is something that takes four days in a lab that we can do in four seconds in the field.”
This comes in handy for many different ag players, including people working in procurement where companies are looking for a certain quality of goods. When it comes to spices, for example, imposters are abundant and buyers can end up paying top dollar for a fraudulent product. AgNext’s spectrometer technology allows users to identify the quality and composition of the product to help the parties ensure the price is right.
On the farm, the hyperspectral imaging can assess things like nutrient content and leaf moisture to help growers hone in on how they apply fertilizer, water, and other inputs. The company is also working on a way to apply its technology to real-time contamination detection in the food system, which Bhamra sees as having application globally.
“AgNext is a great example of India-first innovation in precision agriculture that can scale globally,” Vani Kola, MD of Kalaari said in a press release announcing the funding. “We at Kalaari believe that AgNext’s cost-effective and unique technology can offer tremendous savings to agribusinesses and affiliated growers both at pre and post-harvest stages by improving quality and traceability across the ag value chain. We are proud to partner with the AgNext team, who are highly passionate about putting India on the global map for ag data analytics.”
AgNext was incubated at STEP IIT Kharagpur and received seed funding and acceleration support from a-IDEA, which is managed by the National Academy of Agricultural Research Management (NAARM) in Hyderabad.