2021-07-20

Matrix-backed Vegrow raises $13M co-led by Lightspeed Venture Partners and Elevation Capital

20th July 2021, India: Vegrow, a B2B agritech platform for fruits and vegetables, has raised $13M in a series A investment round co-led by Lightspeed Venture Partners and Elevation Capital. The round also saw participation from existing investors Matrix Partners India, Ankur Capital, Better Capital and Titan Capital.

Established in 2020, Vegrow has scaled rapidly among both farmers and B2B customers, resulting in nearly 20x top-line growth with a presence in over 30 cities. At the heart of this growth is their unique technology platform, which powers everything from farm discovery, produce quality profiling, market intelligence to smart matchmaking between farm-level inventory and customer requirements. The impact of this platform is clear in deep customer love and positive unit economics early on in the company’s journey.

While India’s B2B agri market is attractive ($300B), it is also a complex maze of fragmented supply with over 120M farmers growing across 30 states. Vegrow is on a mission to unlock the power of India’s agri value chain, initially focusing on the $50B fruits and & high value vegetables segment. The company addresses challenges around farmland under-utilization and supply fragmentation for farmers and delivers consistent quality along with fill rate to customers. Their unique farmer engagement model and tech-driven quality profiling are core to delivering higher returns to farmers, reducing supply-chain wastage and improving procurement for wholesalers.

Vegrow was founded by IIT alumni Praneeth Kumar, Mrudhukar Batchu, Kiran Naik and Shobhit Jain, who have developed deep agri expertise as well as a hyper-growth marketplace culture, having previously worked across companies such as ITC, Urban Company and Chronus. This combination of deep agri value chain knowledge, product thinking, and farmer-empathy makes for a powerful driving force in the sector.

At Vegrow, we focus on select products as compared to building a large basket. Each of these products is a multi-billion dollar opportunity. This enables us to go deep in the product value chain and unlock massive growth in this sector. In fact, we have become one of the largest companies for pomegranates in the country in less than a year. We are excited to expand to 100 cities, invest in technology and launch new products with this fundraise.” said the founders of Vegrow.

Agriculture as a sector has largely remained removed from digital disruptions, despite the strong tailwinds of increasing internet penetration and adoption. We believe any effort to digitize these value chains will have to keep farmers and their interests at the core. Vegrow's farm-centred approach, coupled with strong insights, which are allowing the team to fundamentally re-imagine and augment these supply chains, stood out in our interactions. Super thrilled to be a part of this mission-driven team as they create access and value for millions of farmers,” said Akarsh Shrivastava, Vice President, Elevation Capital.

Vaibhav Agrawal, Partner, Lightspeed, added, “Having invested in commerce companies like Pinduoduo, OYO and Zetwerk we have realized that the number one pressing need of the small supplier, a farmer in this case, is higher revenue realization. It’s not accessing inputs, credit or crop advisory. Therefore, we believe companies building marketplaces between farmers and buyers, using technology to eliminate inefficiencies will have the largest market opportunity eventually. Additionally, many marketplaces have scaled up on negative unit margins in this category, so we were really impressed by the growth - and - positive unit margin Vegrow has demonstrated using its technology-oriented approach to standardize quality, minimize inventory and retain farmers.

Ritu Verma, Partner, Ankur Capital, added, “While Indian consumers and businesses have seen tremendous changes in the past 10 years through several waves of innovation, the reality is our fruits and vegetables are grown by independent farmers in a nearly identical manner, and with dwindling yields. Vegrow's tech-enabled processes allow the company to grow their margins while also driving value to the farmers they work with."

Sudipto Sannigrahi, Vice President, Matrix India, also commented, “We are privileged to be the first to partner with the Vegrow team on their journey of building one of India’s largest agritech platforms. The team has the unique experience and know-how of grassroots agriculture — in fact, a few co-founders come from farming families! and have experience in building high-growth internet marketplaces. We love the company’s focus on aggregating fragmented farms to help unlock economies of scale with technology-led interventions which have enabled them to scale rapidly and profitably over the last 12 months. We believe they are well-positioned to emerge as the front runners of this space and streamline India’s largest yet unorganised industry.”

About Elevation Capital:
Elevation Capital is a leading venture capital firm which provides seed and early-stage capital for emerging companies in India. Founded in 2002, Elevation is currently investing out of its seventh fund, and has over $2 Bn under management. The fund is led by Managing Partner Ravi Adusumalli, along with five Partners Deepak Gaur, Mukul Arora, Mridul Arora, Vivek Mathur, and Mayank Khanduja. The firm has a portfolio of over 100 companies across the internet, SaaS, consumer, financial services, and logistics sectors. Elevation has been an early investor and partner to founders of category-defining companies, such as Acko, FirstCry, Justdial, MakeMyTrip, Meesho, NoBroker, Paytm, ShareChat, Swiggy, Unacademy, and Urban Company.
 
About Lightspeed:
Lightspeed is a multi-stage venture capital firm focused on accelerating disruptive innovations and trends in the Enterprise and Consumer sectors. Since 2000, Lightspeed has backed entrepreneurs and helped build companies of tomorrow, including Snap, Affirm, OYO, Nutanix, Byju’s, and Udaan. Lightspeed and its affiliates currently manage more than $10 Bn across the global Lightspeed platform, with investment professionals and advisors in India, Silicon Valley, Israel, China, Southeast Asia and Europe. Visit us at https://lsvp.com
 
About Ankur Capital:
Ankur Capital (https://www.ankurcapital.com/) is an early stage venture capital fund focused on transformative technologies for the Next Billion Users. Established in 2014, its investment thesis underscores the emerging opportunities created by the growing aspirations and greater digital access of this audience. The following portfolio companies successfully illustrate Ankur Capital’s highly differentiated thesis: CropIn (SaaS solutions for farmers, present in 53 countries); String Bio (alternative protein generation from methane); Niramai (AI-powered thermal imaging for breast cancer diagnosis); and Captain Fresh (aggregators of fresh seafood across select states). Considered a pioneer in India’s agtech investments, Ankur Capital incubated ThinkAg, the country’s first think tank in the agritech space. Its founders are consistently counted amongst India’s top AI influencers. With the second fund, Ankur Capital strengthens and deepens its commitment to and investment expertise in agtech and healthtech, and expands its reach through opportunities across fintech, edtech, localisation, and insurtech.
 
About Matrix Partners India:
Matrix Partners India is an investment firm with approximately $1 billion under management. Founded in 2006, the firm invests in companies targeting the Indian consumer and enterprise market at the seed, early, and early growth stages. Matrix India has invested in several market-leading companies such as Ola (mobility), Dailyhunt (mobile local language platform), Razorpay (payments), Five Star Business Finance (SME lending), OfBusiness (credit led B2B marketplace), Ola Electric (electric vehicles), Stanza Living (tech-enabled student housing platform), OneCard (mobile-first credit card), Country Delight (D2C dairy & fresh foods brand), DealShare (social commerce platform), Bijnis (digital B2B marketplace), Captain Fresh (seafood marketplace), Mswipe (mobile POS), and Cloudnine Hospitals (leading chain of maternity hospitals) among others. Matrix India has advisory offices in Bangalore, Delhi, and Mumbai. Matrix Partners has a global network of funds investing in the US, China, and India, with approximately $5 billion under management. Further information is available at www.matrixpartners.in. To know more about our investment philosophy & ideologies, check out the #MatrixMoments podcast series.