Omnivore Partners has announced the first close of its second fund, Omnivore Partners India Fund 2, on $46 million.
Omnivore, which calls itself an “impact venture fund” is solely focused on agtech investments in India, and investors (LPs) in the fund were largely impact-minded funds from Europe, India, and the US, demonstrating the growing link between agriculture and impact investing.
“I think agriculture is becoming a key part of impact investing globally and these investors are very aligned with our long-term goals,” Omnivore founding partner Mark Kahn told AgFunderNews.
LPs invested in the fund include German government-owned development bank KfW, the Small Industries Development Bank of India, the Dutch Good Growth Fund (DGGF), The Rockefeller Foundation, US-based impact-focused family office Ceniarth, Indian commercial bank RBL Bank, and the US-based Sorenson Impact Foundation.
Omnivore is targeting a total of $75 million for this, its second fund and plans to complete fundraising by August 2018.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
“We expect to make the second fund’s first two investments by end-March 2018,” said Jinesh Shah, also a founding partner in the firm.
Omnivore is primarily focused on increasing profitability for smallholder farmers along with increasing sustainability and decreasing uncertainty. The fund currently has 12 companies in its portfolio and expects to make five new investments in 2018, two of which are in their final stages.
In a statement Omnivore estimated that in aggregate, over 5.2 million Indian farmers currently use products and services developed by Omnivore portfolio companies.
Kahn said he’s been encouraged to see major generalist investors like Accel Partners getting into the agtech space, as well as international players turning their attention toward India.
He offered the example of Japanese billionaire Taizo Son, founder of Japanese startup hub Mistletoe, who created a food and agriculture investment vehicle and incubator in India in partnership with the GSF Accelerator in September.
“There is generally a maturation, a growth in the ecosystem very broadly. We have more early-stage investors interested in ag and food than ever before,” said Kahn.
Though India’s agtech scene is maturing, holes and imbalances in the market still remain. (Stay tuned for our 2017 AgriFood Tech Investing Report coming soon!)
After a string of startup shutdowns in the consumer food e-commerce space, which has significantly cooled in recent months despite the continued building of the Swiggy war chest, investors began to look farther down the supply chain and agribusiness marketplaces cropped up at a noticeably fast clip — at least nine in the last two years.
“It’s undifferentiated right now, but its early days because the market is very large and these companies aren’t burning money the way delivery companies are,” said Shah. Omnivore has not fallen prey to the hype in this sector, favoring on-farm digital technologies and supply chain IoT plays to date (see below).
Kahn said what is yet missing from the Indian agtech startup market is more technology startups in the area of water management.
“We need data around water. We need precision solutions around water. I think the hardware can be improved. The entire space is ripe for transformation,” he said.
Omnivore Fund 1 has twelve active portfolio companies:
Arohan Foods – India’s only pork processor
Barrix – Sustainable crop protection products
Eruvaka – On-farm diagnostic equipment for aquaculture
Ecozen – Solar-powered technologies for irrigation and cold storage
FR8 – Technology-driven long-haul trucking solutions to large corporates, SMEs, and the agribusiness ecosystem in India
GramCover – Digital, customzied crop insurance products and risk analysis for Indian agriculture
Khedut – Mechanization and equipment technologies for farmers
MITRA – spraying and harvesting machinery for specialty crops in emerging markets
Retigence – Inventory and analytics app for supply chain optimiztion
Skymet – Climate, weather, and crop analytics for insurance companies, banks, agribusinesses, and public sector institutions in India.
Stellapps – Indian data collection and analysis stack for the dairy supply chain
Y-Cook – Precooked, packaged farm to fork vegetable provider