Indian ag fintech startup Jai Kisan has raised ₹2.17 billion ($30 million) in a Series A round comprising equity and debt funding.
South Korea’s Mirae Asset led the round, with existing investors Arkam Ventures, Better Capital, Blume Ventures, Nabventures — the VC arm of India’s National Bank for Agriculture & Rural Development — and Prophetic Ventures also participating.
Syngenta Group Ventures came on board as a new investor in the round, alongside other undisclosed investors including several high net worth individuals.
The debt portion of the round came from BlackSoil, Stride Ventures, and Trifecta Capital.
Jai Kisan wants to improve access to credit for India’s 120 million smallholder farmers and their local suppliers and service providers. Historically, these players in the country’s rural economy have faced multiple hurdles to securing finance, due to small loan sizes which make scant economic sense for larger lenders – and a lack of formal credit histories.
The Mumbai-based startup has built a “rural fintech full-stack platform,” taking a B2B2C approach to partner with intermediaries in the agricultural value chain so that they can lend to farmers at lower costs.
Jai Kisan works with businesses that sell to farmers — such as input or equipment providers — and those that buy from farmers, such as agri-commodity traders and food processors. These partners act as sales agents for the startup and its lender clients by offering finance as an add-on to the inputs they sell.
The partners can then cut their mark-up, leading to lower interest rates for farmers and quicker turnaround times for all participants in the finance value chain. Jai Kisan can also act as a middleman between these partners and apex lenders — such as state-owned Karnataka Vikas Grameen Bank — further cutting interest rates to farmers by sourcing better deals.
Today, the startup — which was founded in 2017 — says it works with more than 700 “organized and unorganized entities in the space” with a cumulative customer base of over 150,000 “rural individuals including farmers.”
Launched in April 2020, Jai Kisan’s digital ledger app for rural businesses, Bharat Khata, has handled over 27.9 billion rupees ($385 million) in annualized gross transaction volume run rate. The startup itself has financed more than 15% of those transactions, assisting it to an annualized loan disbursal run rate of 4.32 billion rupees ($59.7 million) as of March 2021.
Jai Kisan will use the Series A funding to make new hires — particularly with regards to its engineering and data science capabilities — as well as to expand its presence in India, develop a range of digital credit products, and build an on-book portfolio of loans.
Co-founder and CEO Arjun Ahluwalia said the company is dedicating the fundraise “to every member of our team who has suffered during the [Covid-19] pandemic and Santosh Rachawar – a dear colleague who we lost to it.”
In a statement, Ashish Dave, CEO at Mirae Asset India Venture Investments, said that Jai Kisan “is at the cusp of disrupting the rural financing industry.”
The startup’s “stellar growth, excellent asset quality, and expanding footprint make them a highly differentiated player in the segment,” he added.
“We believe that access to credit is one of the key enablers for farmers to adopt quality practices. The low penetration of traditional financing institutions in the sector creates significant financial stress for smallholder farmers,” said Syngenta Group Ventures managing director Shubhang Shankar.
“We have been very impressed by the digitally-driven approach taken by Jai Kisan to manage the end-to-end flow of credit, thereby proving that it is viable to extend formal credit to small farmers and overcome structural challenges that have often kept inherently credit-worthy farmers out of the formal financing ecosystem. We hope with this investment and with partnerships with key stakeholders in the Indian agricultural landscape, Jai Kisan will be able to extend its credit offerings to the millions of underserved smallholder farmers in India and beyond.”
The startup’s last publicly announced funding round was a $3.94 million pre-Series A raise in June last year.
Comment? News tip? Story idea? Email me at [email protected] or find me on LinkedIn and Twitter
