Indian agritech startup Arya, which reaches hundreds of thousands of farmers in the South Asian market and helps them store and sell their produce and secure credit, has raised $60 million in a new round of funding as it enters a new phase. of growth.
Asia Impact SA, Lightrock India and Quona Capital co-led the $42 million Series C funding round. The US International Development France Corporation provided an additional $18 million as debt. The new round values Noida’s eight-year-old startup at $300 million, said a person familiar with the matter.
Aria is trying to solve three challenges that have plagued farmers in India for decades. Only about a third of the income they produce makes it to large markets, where most sales take place, creating an uneven concentration that continues to deprive millions of farmers from efficiently storing and selling their produce.
The vast majority of farmers struggle to find buyers for their income and typically go through a cash crunch before selling the products.
Arya, co-founded by Prasanna Rao, is addressing this through a network of about 10,000 warehouses, up from about 1,500 a year ago which it seeded in 21 Indian states. By making these warehouses available to farmers close to their farms, the startup made it possible for them to store their produce for the first time.
The warehouse is designed to store farmers’ grain for about three months and offers insurance coverage. Farmers can monitor in real time how products move from their farm to the nearby warehouse, establishing a level of transparency and trust that is crucial for courting farmers, Rao said in an interview with Ploonge.
At the warehouse, Arya also helps farmers connect with shoppers and gives them the option to negotiate prices. “As we keep merchandise in our warehouses, we have full visibility of quantity and quality. That’s how we’re able to establish a connection between the buyer and seller,” he said, adding that the startup has more than $2 billion worth of grain visibility on its platform.
The startup has developed a level of sophistication that is capable of creating a new warehouse in two days in any region that is needed, he said. Arya does not own these warehouses and instead renovates warehouses owned by other companies. There are over 100,000 of these warehouses spread across the country and most of them are being underutilized.
Arya works with farmer associations to reach farmers. Farmers can use Arya’s smartphone app or use traditional ways such as in-person guidance to use the platform and clear up any confusion.
But the work is not done there.
As we have seen in the case of tens of millions of neighborhood stores in India, farmers are also heavily dependent on the earnings they make from selling their current batches of produce before they can start a new harvest season.
Arya works with banks and non-bank financial institutions to help these farmers obtain loans, allowing them to return to work while their produce is sold. The $18 million it raised as debt in the new round is intended to provide credit to farmers that financial institutions do not deem creditworthy, he said, adding that in the last year, the startup has increased its funding portfolio threefold.
“Arya’s unrivaled reach in rural India, coupled with its technology-driven integrated service model, has made it one of the fastest growing agri-trade platforms in India,” said Varun Malhotra, partner at Quona Capital, in a statement. “Arya is successfully bridging the trust gap in post-harvest agricultural transactions through full transparency and assurance of quality, quantity and payments. We are excited to deepen our partnership with Arya.”
Once a neglected sector, dozens of startups and tech giants are exploring ways to take advantage of what is one of the world’s biggest annual grain crops. IIndia’s agritech industry has the potential to reach around $24 billion in revenue by 2025, according to consultancy EY.
Recently, Amazon began offering real-time advice and information to farmers to help them make crop decisions. Microsoft is working with 100 villages to deploy AI and build a platform.
Rao said it was encouraging to see more industry players paying attention to the industry. He said Arya alone expects to have a network of more than 60,000 warehouses in the next four years and is also looking into acquiring smaller startups to drive faster growth.
“Through the pandemic, we have seen Arya transform agri-commerce across India,” Matteo Pusineri, director of Asia Impact SA, said in a statement.
“Arya will help realize Asia Impact’s vision of integrating underserved farming communities across Asia into markets at scale. We are confident that Arya, under the leadership of Prasanna Rao, Anand Chandra and Chattanathan Devarajan, will greatly contribute to a unique ecosystem that supports rural India’s story of sustainable growth.”