January 27, 2017

Powai, Mumbai-based IvyCap Ventures, a private equity firm, has invested $4 million into local ag-tech startup RML AgTech, as PE Hub reported. RML, which raised the capital in a Series B round, delivers tailored data to 1.4 million Indian farmers via an app on the farmer’s smartphone. IvyCap directed the capital to RML over a series of tranches in 2016.

RML’s technology is designed to bolster “crop productivity” and farmer incomes by supporting all phases of the growing process, from soil testing to crop selection to crop marketing. The startup will use the new capital to invest in its IT infrastructure and to develop additional products, features, tools, and services for the farming community. RML also plans to bolster its talent pool and expand into new Indian states including Tamil Nadu and Andhra Pradesh, reports indicate.

RML AgTech got in on the ground floor for the adoption of technology among Indian farmers, but further penetration of technology in the emerging nation is desperately needed in order to improve India’s position for food security. Rajiv Tevtiya, RML AgTech’s chief executive, told the Economic Times that India’s farming community has been focused on machinery and that there needs to be a shift toward data science in order to slash farmers’ input costs.

Last year through October private equity investments into India’s food and agribusiness sectors took a turn for the worse, totaling $250 million across 62 deals compared with $1.15 billion across 153 deals in the year-ago period, as GAI News previously reported.

Nonetheless, there is a buzz surrounding further capital commitments for India’s ag-tech sector. For instance, Agrostar, a Maharashtra-based technology platform for farmers to purchase crop inputs via a mobile app, is reportedly near to securing between $10 million and $12 million from Accel India, according to India’s Economic Times. Supply-chain ag-tech startup Crofarm is similarly looking to raise approximately $7 million this year to support farmers in delivering their produce beyond India’s financial and technology hubs.

Meanwhile, India’s Prime Minister Narendra Modi said last year that the implementation of ag tech for Indian farmers could “double farmers’ income by 2020,” reports indicate.

“The agriculture sector today in India stands at an inflection point where food security for future India will be determined. And it is the agri-tech sector that has the potential to address the challenges we face today. We found the product and strategy model of RML AgTech to principally address these concerns and hence a huge potential for the time to come,” stated Vikram Gupta, IvyCap Ventures founder and managing partner.

The number of Indians living in rural areas with access to the Internet is expected to more than double from 120 million today to approximately 315 million by 2020, according to Boston Consulting Group data.

“We are glad to see the faith laid by IvyCap Ventures in our business model. We believe, with the increased penetration of smartphones in the rural area and the push given by the government to go digital, accessibility of our products to farmers will see significant growth over the next two-to-five years,” stated RML AgTech’s Tevtiya.

IvyCap Ventures, which reportedly is nearing the close of its second fund with $44 million, replaced Reuters as the lead investor in RML in 2013 when it reportedly directed $2.6 million-plus into the startup.

-Gerelyn Terzo

Gerelyn is a regular contributor to GAI News. She has been writing about institutional investing and asset management for the majority of her career and has developed a focus on agriculture given the global scale of the industry’s relevance and importance.