TechnifyBiz — an Indian startup creating a digital B2B marketplace for non-perishable food commodities like nuts, seeds, dry fruits, specialty grains, and honey — has raised $2 million in seed funding from Omnivore and the Insitor Impact Asia Fund.
Shashank Kumar and Harshil Mathur, who are both co-founders of Razorpay, have also invested in the round. Existing angel investors include R Narayan (Power2SME), Rajnish Gupta (Aakash Namkeen), and Indigram Labs Foundation.
Based in Delhi, TechnifyBiz works with SME food processors and farmer groups on the supply side and wholesale buyers on the demand side. The idea is for suppliers to gain value from more efficient processing and aggregated volumes, while customers get transparent daily pricing, consistent quality, and faster delivery timelines.
In a press release sent to AFN, TechnifyBiz co-founder Akash Sharma observed a “massive unmet demand for high-quality food commodities in India.” He added that TechnifyBiz is helping to bridge this demand by “developing back-end supply infrastructure and technology-enabled services.”
Elaborating on these thoughts by phone, Sharma pointed to the nature and pace of India’s retail sector growth; the rapid arrival of large supermarket conglomerates has left back-end supply chains lagging behind. His point echoes frequent reports of India’s suppliers and smallholder farmers facing harsh market conditions in part due to unreliable harvests, opaque pricing, late payments, and scant access to capital.
Traditionally, however, India’s food systems have proven too fragmented and complex for any swift moves to more efficient digital marketplaces. Besides, strong local vested interests from millions of middlemen, or mandis as they are known, often actively forestall streamlined, fully transparent supply chains.
Nevertheless, TechnifyBiz appears to have made good headway so far. Despite never previously raising institutional capital, TechnifyBiz claims to be tracking a monthly revenue run rate of $1.4 million and will cross $10.5 million of sales revenue in FY 2019-20. According to the company, that is an increase of 5x from FY2018-19 when sales were $2.1 million.
Describing why TechnifyBiz had sought to raise this capital round, Sharma’s co-founder Abhishek Agarwal said the funding will help his company “double our base of SME food processors and farmer groups across the country, and strengthen our supply clusters across Bihar, Maharashtra, Karnataka, Jammu, and Orissa.”
As to why investors were interested in backing TechnifyBiz, Omnivore managing partner Jinesh Shah described being “very inspired” by the company’s supplier focus, which is “creating tremendous value for farmer groups and SME food processors.” Country Manager of the Insitor Impact Asia Fund Abhijit Nath also expressed admiration for TechnifyBiz’s “ability to create a scalable, high impact business that is focused on reducing inefficiencies in the agricultural supply chain.”
Well-positioned in the US-China trade war
One area Sharma also acknowledged in his phone interview with AFN was the opportunity for his company in the import-export world by providing internationally-acceptable pricing and quality standards for Indian food commodities. The US-China trade war rumbling in the background is often a cause for concern for companies seeking to get involved in international trade. But with Washington stifling food supplies to China, there might actually be advantages for companies like TechnifyBiz. The Indian government is actively trying to fill some of those agri-commodities gaps in the Chinese market, as the Financial Times reported early last year. And Sharma said his company was open both to trade with China — imports and exports — as well as already being a large supplier of almonds to the Indian market from the US.
Back on the domestic front, TechnifyBiz contrasts sharply with the strategy of another recent Omnivore investment — the ag trading platform Bijak, a company proposing to work with India’s middlemen in a bid for greater accountability and transparency. For TechnifyBiz, the best way to get to those results would be to cut straight past them.
Regardless of who proves to be right, India’s supply chain is already changing fast; tech is offering India’s massive farming population all manner of new tricks to boost supply chain viability. Some of the homegrown contenders are maturing nicely, like Ecozen Solutions, a company developing portable solar-powered food storage solutions. India-based CropIn recently won Rainforest Alliance’s AgTech Developer Challenge for its AI and satellite-powered cocoa solution. Plantix, meanwhile, a platform that harnesses computer vision to enable the early-stage detection of crop diseases with a smartphone camera, raised a €6.6 million Series A last year bid to transform Indian farming.
Elsewhere, DeHaat’s rapidly expanding farmer network provides agricultural inputs, customized crop advising, and market linkages for farm produce, while TheKrishi App is also aiming to boost Indian farmers’ finances by aggregating multiple stakeholders on a digital platform. (Disclaimer: DeHaat is an AgFunder portfolio company.) Ninjacart recently raised $89 million from Tiger Global in India’s largest-ever farm tech deal, while TartanSense is focusing on building robots to assist small farmers throughout the country with pesticide application and Intello Labs is applying computer vision and deep learning to measure the quality of crops.
All in all, this TechnifyBiz seed round is just a taster of what is to come for Indian agri-tech in 2020.
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