Vegrow, a B2B agritech marketplace for fruits, has raised $25 Mn in its Series B investment round led by Prosus Ventures.
The cofounder of Vegrow, Shobhit Jain, told ET that the agritech startup would use the incoming funds to expand its geographic presence, develop its tech stack and hire across multiple positions. The Bengaluru-based startup last raised $13 Mn in July 2021 in a Series A investment round.
Founded in 2020 by Praneeth Kumar, Shobhit Jain, Mrudhukar Batchu and Kiran Naik, Vegrow claims to have a presence in more than 100 cities and it helps around 20,000 farmers to reach the market.
Vegrow provides a range of tech solutions such as grading, packaging, logistics and sales as a service to farmers, along with crop advisory, among other farming-related services. According to Jain, Vegrow processes more than 200 tonnes of fruits per day.
According to Vegrow, it has grown 15 times in the past year, with a gross margin of about 20%. “The growth has been unlocked on the back of our deep tech and data stack across the value chain. We have built capabilities to harness farmer chatter, estimate farmland produce and measure demand across tier-I, II and III markets,” he said.
According to Vegrow’s website, the fresh fruits & vegetable business has an addressable market size of $43 Bn. At the same time, an Inc42 report on India’s agritech market suggested that India’s agritech opportunity is expected to grow to $24.1 Bn by 2025. A Bain & Company report pegs India’s agritech market at $35 Bn by 2025.
Vegrow has an annualised revenue run rate of $200 Mn. “We aim to grow sustainably and deliver a $5 Bn outcome within the next five years,” Jain added.
Over the last few months, both investors and the government have shown an increasing interest in agritech startups in the country.
In May, Union Minister of State For Science and Technology Jitendra Singh said that agritech startups are critical to India’s future economy. According to Singh, these startups are solving problems related to supply chain management, improper infrastructure and the inability of farmers to access a wider range of markets.
Last month, two of the government’s initiatives, the Open Network for Digital Commerce (ONDC) and the National Bank for Agriculture and Rural Development (NABARD) joined forces to bring ecommerce to agritech. The two entities also organised the NABARD-ONDC Grand Hackathon on 1st-3rd July 2022.
Last year, agritech startups raised around $684 Mn across 47 funding deals. In total, the agritech sector has raised $1 Bn in funding between 2014 and 2021. Recent funding events in the agritech sector include the $40 Mn raised by WayCool, an agritech startup that delivers agricultural perishables to retail stores. Further, Absolute, another agritech startup, had raised $100 Mn earlier in May.