Why Syngenta Ventures Invested in India’s Ninjacart

Ninjacart, an Indian agtech platform that connects farmers to retailers, closed a Rs. 250 crores ($35m) Series B funding round from Syngenta Ventures, Accel US, South Korean fund Neoplux, ZIGxN founder Jo Hirao, Russian fund HR Capital, and Silicon Valley seed stage fund Trifecta Capital. Existing investors Accel India, Nandan Nilekani, Mistletoe, and Qualcomm Ventures also participated in this round.

Founded in 2015, Ninjacart is using technology to tackle one of the toughest agricultural supply chain problems: fresh produce delivery. The Bengaluru-based startup aims to increase farmers’ incomes, reduce food wastage, introduce competitive prices for retailers, and ensure quality food for all consumers.

The midstream e-commerce play seems to break tradition with Syngenta Ventures’ existing portfolio and investment thesis, but according to investment manager Shubhang Shankar, it’s right on the money.

“In our portfolio, we have very strong plays around opportunities that address gaps and imperfections in the value chain. We think monetizing produce is one of the big opportunities because there are so many imperfections in that system, especially outside the US,” Shankar told AgFunderNews. “Our rule has always been to find innovations that support farmers not just on the farm, but off the farm too.”

By backing Ninjacart, Syngenta Ventures is hoping to help India’s produce farmers capture better prices for their products and to improve some of the logistical headaches associated with aggregating and selling produce. If farmers are earning better and more reliable prices from these sales, then they are more likely to reinvest in their farm operations, which includes purchasing higher quality inputs, something that is quite appealing for one of the world’s largest agricultural input manufacturers.

Ninjacart currently operates in Bengaluru, Hyderabad, and Chennai with a team of 750+. It has a sourcing network of 3000+ farmers across south India and moves fresh produce from farm to over 4,000 retailers in less than 12 hours on a daily basis. The funding will be used to help Ninjacart expand to new regions, with a goal of claiming 10 new cities and 200 distribution centers across India. Capital will also be used to improve the supply chain infrastructure while strengthening its product and tech team.

E-commerce is one of the busiest and most crowded spaces in food tech, with perishable food delivery being one of the few final frontiers for digital grocery. The decision to invest in India’s e-commerce ecosystem was also a matter of timing for Syngenta Ventures.

“This was the right opportunity that came up at the right time. The e-commerce market in India has attracted investment in other sectors, not just agricultural. We believe there is an acceptance and existence of business models that can be transferred from other sectors. There is a good ecosystem of investors that understand the e-commerce marketplace, and we are proud to work with some of them as part of Ninjacart,” Shankar explains.

India’s massive market opportunity and status as one of the major agricultural landscapes in the world were also attractive aspects of the investment opportunity for Syngenta Ventures. By Ninjacart and Shankar’s account, India is suffering from an agrimarketing problem. The value chain that links growers to the retail market is dominated by intermediaries in a subscale fashion that increases the price for consumers and leaves farmers with a price that is not even close to what Ninjacart and Shankar believe they should receive. The startup hopes to strike a better balance and efficiency in India’s produce supply chain.

Perishable grocery delivery is no easy task, however, as AgFunderNews recently discussed with Farmstead CEO Pradeep Elankumaran. Startups have to figure out how to strike a delicate balance between making sure they have enough products in stock to fulfill orders without having a surplus that creates food waste. They also have to figure out how to get customers’ their orders as quickly as possible while making sure that delivery driver costs don’t max out their profit margins.

“When it comes to perishable delivery, what really impressed us about Ninjacart was the fact that they have taken technology and applied it to what was traditionally a very long-lead supply chain and made it a just-in-time supply chain. They have a fast turn-around time between shelf and procurement order for the growers, which is around 48 to 36 hours,” Shankar says. “Matching supply and demand is something that was really impressive and something that applies to many other markets in India and other regions like Asia, Africa, and maybe Europe.”

Syngenta Ventures was also impressed by Ninjacart’s decision to use technology to solve the challenges that perishable delivery pose instead of throwing more people at problems. The company’s technology is similar to an ERP system that connects order-taking and retail to demand and supply, while ensuring that information, money, and physical goods flow within a single system as opposed to remaining siloed.

Ninjacart may be one of just two e-commerce plays for Syngenta Ventures, but it will not be the last. The fund is also invested in Latin American inputs e-commerce startup Agrofy.

“Do we plan to invest in more e-commerce opportunities? Absolutely. We will, and we are currently exploring e-commerce upstream and downstream in a number of geographies.”