Matrix Partners Makes First Ag-Focused Investment in Agtech Startup Gobasco
November 9, 2017
Matrix Partners, an Indian investment firm with Rs 4,500 cr (US$676.5 million) under management, has made its first foray into ag funding, investing an undisclosed amount in agtech startup Gobasco.
Launched only this year, Gobasco is a young startup co-founded by Vedant Katiyar and Abhishek Sharma, a former AI researcher with Apple, that is seeking to disrupt the $360 billion agricultural supply chain industry in India through the use of artificial intelligence (AI) to automatically grade and sort vegetables and fruits. Combining large-scale data integration with proprietary technology, Gobasco is working to build a full-stack commerce platform that generates greater efficiency, reduces waste, and lifts prices and market connection through the creation of a standard for reliable trading for agricultural commodities. In its first three months of operation, the startup has already transacted with more than 500 farmers and buyers across 15 locations, both domestically and overseas.
“Our goal is to bring the power of AI and big data to optimize the agri-supply-chain of India which directly translates into the betterment of millions of Indians,” said Sharma. “I am personally thrilled at the rate and scale at which we are bringing the benefits of cutting-edge technologies to the rural backyard of the world.”
A Hot Category
In early October, Indian fresh produce supply chain management and business-to-business (B2B) agtech platform Farm Taaza Produce Pvt. Ltd raised an $8 million Series A led by Hong Kong-based Epsilon Venture Partners, and Tara Indian Fund IV.
The fruit and vegetable market in South India is worth more than $3 billion, but between 30 and 40 percent of fresh fruits and vegetables grown in India are lost due to spoilage due to highly disorganized supply chains with too many middlemen, according to the company. Farm Taaza is working to streamline these supply chains – informing farmers exactly what is needed based on demand, and therefore, allowing farmers to grow and sell their entire crop.
Currently Farm Taaza engages with more than 1,400 farmers and supplies about 20 tons of produce per day to clients including hospitals and hotels.
“We want to enable a seamless supply chain from farm to store and our next focus will be to leverage machine learning, AI and data analytics for improved decision making,” Kumar Ramachandran, CEO of Farm Taaza, told Deal Street Asia.
In August of this year, another Indian agtech startup, Crofarm, announced it had raised a Rs 10 cr (US$1.5 million) seed round that included U.S.-based Factor[e] Ventures Mukul Singhal and Rohit Jain, former principals at SAIF Partners; angel investor Himanshu Aggarwal; co-founder and CEO of Aspiring Minds, Ashish Gupta; and vice president at Paytm, Sunil Goyal, among others.
Through its app Crofarm Agriproducts, the startup sources produce directly from its network of more than 10,000 farmers, which it provides to large scale retailers including Big Basket, Grofers, Reliance Retail, Jubilant Foodworks, Big Bazar, and Metro Foods.
Based on the orders placed through its digitized platform by retailers, Crofarm is able to advise farmers on how much to harvest and what specifications retailers are looking for in their produce. This system ensures zero waste between the field and the store, and provides the freshest, highest quality produce for delivery to customers.
And only days ago, Mumbai, India-based FarmLink – a startup focused on the farm-to-fork food supply chain of fresh produce in India, announced it had secured $3 million in funding from investment firm and incubator Pioneering Ventures, and Swiss global agribusiness giant Syngenta.
Launched three years ago, FarmLink functions as a facilitator of value-added fruits and vegetables that are sourced directly from farmers and delivers to both consumers and commercial scale buyers, such as retail stores, supermarket chains, quick service restaurants, e-commerce food platforms and industrial processors. Through this process, FarmLink also provides farmers with a reliable long-term income generated from offtake agreements.
The company also is piloting FarmTrace – a new B2B analytic platform that enable customers to track produce from the farm to point-of-sale – a technology that greatly increases the level of transparency in the food supply chain.
India’s agriculture sector saw growth of nearly 100 percent between FY14 and FY15 with agricultural exports increasing from a value of $24.7 billion in 2011/12 to $32.08 billion in 2015/16, reflecting a growth rate of 6.75 percent.
Amid such a promising landscape, B2B agtech platforms such as Gobasco, Farm Taaza, Crofarm, and FarmLink are on the front line for investors to seize the opportunity for return on investment that can be gained from streamlining and disrupting severely outdated supply chain systems in emerging markets.
This potential is noted by Rajinder Balaraman, vice president of Matrix Partners, India, who told the Economic Times, “SME’s in India are adopting technology at a rapid pace, thus opening up opportunities in large, underserved markets like agriculture. The [Gobasco] team is growing fast and is highly mission driven.”
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