December 7, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Founded in 2013 in Pune, India, by brothers Shardul and Sitanshu Sheth, AgroStar has built its platform to answer some of the widest challenges for India’s 140 million farmers, including lack of agronomy advice, adulteration, yield gaps, and high cost of production.

Currently operating in the states of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, and Uttar Pradesh, AgroStar is a “one-stop solution” for more than five million farmers. The company’s services touch the entire agricultural supply chain, offering agronomy tools including diagnosis imagery technology, disease diagnostic services, educational content, and a retail platform through which farmers can purchase inputs.

Advancing this work, AgroStar announced that it has closed on $70 million in Series D funding from Evolvence, Schroders Capital Hero Enterprise, and the UK’s development finance institution CDC. Also participating in this round were Aavishkaar Capital, Accel, Bertelsmann, Chiratae Ventures, and Rabo Frontier Ventures. 

This financing follows a $27 million Series C raised by the company in March 2019 that was led by Bertelsmann India Investments, and a $10 million Series B raised in March 2017 that was led by Accel. 

“We are strong believers in AgroStar’s business model as it addresses the service gap in the agri space by building the largest tech-enabled omnichannel platform that enables farmers to access knowledge and buy quality products across channel,” said Abhishek Chandra, managing director, Evolvence India.

India is a top global producer of many agricultural products – producing 81.285 metric tons of fruit and 162.187 metric tons of vegetables, or approximately 14 percent of the global supply – according to the research article Scope of Supply Chain Management in Fruits and Vegetables in India, published in the Journal of Food Processing & Technology. However, due to inefficiencies throughout the country’s supply chain, India sees food waste of up to 67 million tons each year – more than the total food production of Great Britain, according to Zee News.

Often in the agricultural investment field, challenges are seen as opportunities for innovation and return on investment – and increasingly, investors are seeing these inefficiencies in India’s supply chain as a means to not only have a positive social impact, but as a path to positive returns. This trend is reflected in the scale of investments now being made in India’s agtech sector, making the country the world’s third largest nation in terms of agtech funding, following Germany and the U.S., with investments growing at a CAGR of 53 percent between 2017 and 2020 to reach $329 million, according to Bain & Company.

Merely one month ago, DeHaat, another company that has developed and offers a full-stack, end-to-end platform of agricultural services, closed on the largest agtech funding round in the country’s history when it announced a close on a $115 million Series D led by Belgium-based Sofina and Lightrock India. 

The scale of the businesses in India being funded is also growing. AgroStar co-founder Shardul told the Times of India that the company fulfilled one million orders over the course of the last fiscal year, and is projecting the delivery of 2.5 million during the current fiscal year. And although it won’t be profitable as an enterprise for a few years yet, he stated that it is profitable at the operating level. 

With the capital from this round, AgroStar plans to strengthen its technological platform, add senior talent to its team, and expand its omnichannel strategy, having just rolled out its branded stores, increase its number of franchises from 1,000 to 5,000 over time, expand its geographic footprint across India over the next two-to-three years, and possibly begin helping farmers market their produce. 

“We are now doubling down on our omnichannel strategy to provide a seamless experience to our farmers across various touch points both digital and physical,” said Shardul Sheth, co-founder and CEO, AgroStar.

AgroStar co-founder Sitanshu Sheth added, “The platform has seen ten-fold growth in video content consumption over the last year. Our platform is easy to use for the Indian farmer and adds real value on [the] ground for them. We believe this is just the beginning and foresee massive acceleration in digital adoption by 140 million-plus Indian farmers over the next few years.”

 – Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.