Agro Star, an Indian company selling agricultural inputs directly to farmers through their mobile phones, last week raised $4 million after getting commitments from venture capital firm IDG Ventures India and existing investor Aavishkaa, an early stage firm.
In a country with a hugely fragmented supply chain, from inputs to farmers to consumers, Agro Star is offering the Indian farming industry a “transformational” service, according to Sohil Shah from Intellecap Impact Investment Network (I3N), one of the company’s first investors.
“It’s hugely transformational,” he told AgFunderNews. “It is a one stop shop for farmers to purchase their entire requirement of agri input. It solves the problems faced by farmers by providing them quality products at affordable prices delivered to their doorsteps.”
The company, which first launched in 2013 from the state of Pune, is now serving farmers in four states with expansion plans to cover eight states using its latest funding, according to Vineet Rai, chief executive of Aavishkaar. While Rai believes Agro Star is the only service like it in India today, he believes others will soon follow.
“One of the unique selling points of Agro Star was that this was a disruptive model, but we are sure with its success many more will evolve,” he told AgFunderNews. Reducing the cost of inputs for farmers is a big opportunity for investors, and many other opportunities exist more generally in the supply chain, according to Rai.
Another Aavishkar portfolio company is InI Farms, a fresh fruit producer, processor and exporter that also provides farm extension services, post harvest management and processing for smallholder farmers. Post harvest waste is a huge problem in India where there is limited infrastructure to support the agricultural surpluses of smallholder farmers. InI Farms has reduced post-harvest losses to 2 percent, according to its website. Impact investment firm Aspada Investments — an arm of the Soros Economic Development Fund — is another investor in InI Farms.
Also working to reduce post harvest losses is Aavishkar’s other agriculture portfolio company Ergos. The warehousing and procurement business stores agri commodities such as maize, wheat and rice, and links farmers with end buyers. This not only reduces waste, but helps farmers to realize the full value of their harvest and optimize the cost of their inputs.
Aavishkar’s Rai also sees opportunity for investment in food processing and semi processed exports.
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