India’s DeHaat Raises $2.87m Venture Debt to Launch Financial Services Pilot

May 28, 2019

Farming is expensive, and the payout isn’t always guaranteed, but DeHaat hopes to soften the financial stress for its members with new offerings like credit and insurance. *Disclosure: DeHaat is an AgFunder portfolio company.*

Indian agribusiness marketplace and supply chain platform DeHaat has raised Rs20 crore ($2.87 million) in venture debt round from Trifecta Capital Advisors to be drawn down over the next 12 months. The funding will be used to help the Gurgaon-based company launch a financial services program pilot for its members featuring tools like credit and insurance.

DeHaat is a technology-based platform offering end-to-end agricultural services to farmers, including distribution of high-quality farm inputs, customized farm advisory, access to financial services, and market linkages for selling their produce. Earlier this year, DeHaat had raised a pre-Series A round of INR 29 crore ($4 million), led by Omnivore and AgFunder.

The rapidly-expanding farmer network provides agricultural inputs, customized crop advising, and market linkages for farm produce. It’s on-boarded 50,000 new members in Bihar and Uttar Pradesh in the last three months, bringing its membership to 100,000 farmers. The company is aiming to work with 1 million farmers providing full stack services by March 2021.

In India, around 70% of farmers are smallholders with just one or two hectares to farm, whether they own it or not. This fragmentation, coupled with limited supply chains means they often lack access to high-quality seeds, fertilizers, and crop protection products, leaving them plagued with low productivity.


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The lack of access to inputs, capital, and other financial instruments is a worldwide problem for farmers. A few other startups have picked up on how this vacuum prevents farmers primarily in developing countries from running their businesses. Impact Terra, an agtech and fintech for-profit social enterprise, is building a way to provide financial institutions with credit assessments for farmers in Myanmar. Agrofy is offering a host of agribusiness services to farmers in Argentina, including financial support. myAgro is helping Kenyan farmers save to purchase inputs, and Turkey’s Tarfin provides farmers with better credit terms to buy inputs.

Now, DeHaat is setting its sights on providing farmers with vital financial services that they’ve found lacking in the current market. According to CEO and founder Shashank Kumar, the new pilot is something that platform members have been seeking. We caught up with Kumar to learn more about why DeHaat decided to launch this new pilot and the new services that its members will be able to use.

What caused you to create the pilot?

DeHaat has aspirations to provide a complete, 360-degree package of agricultural services to farmers. Currently, we have been offering services like agri input, crop advisory, and ways to link farm produce to market, which results in a 50% increase to our members’ net income. However, access to credit and insurance is equally important and are highly sought after services for Indian farmers. While offering our existing set of agri value chain services, DeHaat will build transactional relationships with farmers in a transparent way.

We will offer agri input credit based on the member’s transaction history with DeHaat. We assign each member a certain score, and that determines his or her eligibility to use other value-added services.

Why are financial services a need for farmers in India?

Due to scarce capital, Indian farmers can’t use high-quality seed and other agri inputs, and as a result, the average yield for most of the crops is less than many other developed countries. At the same time, 80% of the net sown area in India is used to produce low-value crops like Wheat, Paddy, Mustard. Again, due to limited access to financial support and insurance, farmers are less capable of switching to crops that provide better profits.

Are there any financial services available specifically for farmers in India?

There are several banks and other financial institution in India that are mandated to lend to farmers but they don’t have direct access to farmers, and they also lack information about farmers’ finances and their farming operations. Therefore, less than 10-12% of Indian farmers have access to structured credit from banks and Indian farmers have to borrow money from local lenders at a 3% -5% monthly rate.

Are there any services or features that you don’t plan to offer? Why?

We do not plan to offer mechanization services, but we plan to partner with service providers who want to use our platform to aggregate demand for various mechanization services.

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