[Funding Alert] Soil-To-Sale Agritech Start-Up Raises $32 Mln, Plans Supply Chain Automation
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Agritech start-up WayCool raised $32 million in a Series C round led by Lightbox, the company said on Friday. The round, which involved a combination of both equity and debt financing, also saw participation from Dutch-based entrepreneurial development bank FMO, existing investor Lightspeed Aspada as well as venture debt firm InnoVen Capital.
Founded in 2015 by Sanjay Dasari and Karthik Jayaraman, the Chennai-headquartered company procures, processes and distributes a wide range of food products including fresh produce, staples and dairy products.
WayCool has previously raised two rounds of funding from Aspada, LGT Impact Ventures, Caspian Impact Investment, and Northern Arc Capital.
The company operates on a soil-to-sale model, wherein, it works with a farmer base of nearly 40,000 to help improve farm income, and brings efficiency through its direct supply chain model. It moves over 250 tonnes of food everyday to 8,000 enterprise clients across Southern India.
In its statement, WayCool also stated that it intends to accelerate its path to profitability while focusing on maintaining as well as further improving its capital efficient model. “We are in the efficiency business, we have to make sure that our own cost footprint is as tight as possible,” Jayaraman told Entrepreneur India, adding that while they are reasonably good at using data science to see general trends, they are looking to get more agile in cases where there are disruptions.
WayCool said it is also developing a range of branded products and currently has brands such as Freshey’s and Kitchenji. Considering the company’s involvement throughout the supply chain, it has the ability to better project demand and supply for various products.
“We started life as an intermediary connecting raw produce, we’ve now started discovering that there is potential to remove work from the kitchen and capture a portion of the value thereof,” Jayaraman said. Some of their products include ready-to-cook dosa and idly batter, puree and pre-manufactured gravies. He said their product formulations are also tuned to the taste of the towns and cities they serve.
Using the Funds
With the fresh funds, WayCool plans to automate its supply chain and build the next layer of data analytics required to strengthen supply chain efficiency. It said it would also develop and expand its range of value-added products to enterprise and retail customers.
“We're already having a certain amount of automation in our warehouses, and we believe we can do a little more so that onerous tasks are not required to be performed by humans. They can focus more on orchestrating the supply chain rather than physically operating it,” said Jayaraman.
Apart from the focus on technology, the company would also deploy funds to deepen and widen ‘Outgrow’, its agricultural extension program. It recently announced the set-up of its first agricultural research station to collaborate with star-tups and bring relevant production technologies to its farmer base.
Jayaraman said, “farm-to-fork has so much potential but when you go soil-to-sale, it has even more potential. If you help the farmers improve their cost structure, and improve their cultivation yield in line with demand, we are really getting into a deeper area which I think is more sustainable. We have been doing that in a small way, and infusion of these funds will help us do that in a slightly larger scale.”
The company will continue to majorly focus on southern India, foraying a little into the neighboring states of Madhya Pradesh and Maharashtra.
“We look forward to working with them (WayCool) and positively impacting the livelihood of farmers and build(ing) a long-term sustainable business,” said Prashant Mehta, partner at Mumbai-based Lightbox.
For FMO, this is the first agritech investment under its new ventures programme that focuses on fintech, off-grid energy and agritech.
“The company leverages technology and innovative concepts to improve logistics and distribution services. Therefore, value chains are optimized thereby realizing reduced food waste,” said FMO’s chief investment officer Linda Broekhuizen.
Going forward, Jayaraman said the company hopes to double its farmer base in the next 2-3 years but the larger focus would be on making more of the base active. “Farmers come in and out, they switch crops and go out of our network and then come back. So one has to make the base more engaged and more continually working with us.”