By Monika Ghosh and Sharon Lewis This article is the last of a four-part Tech’s Year in Review series reviewing developments across industries in 2020. It discusses the world of healthtech and biotech, foodtech and agritech, and sustainability. This article is the last of a four-part [...]
Arya will utilize the fresh funds to expand financing to farmers; strengthen its post-harvest services and market linkages platform.
Indian agritech startup Arya, which offers capital and post-harvest services to farmers, has raised US$21 million in its Series B round, the startup announced in a press release today. The funding was a mix of equity and debt capital, the statement said.
The equity round was led by fintech-focused venture capital firm Quona Capital, the statement said. Existing investors LGT Lightstone Aspada and Omnivore also participated in the round with multiple lenders providing additional debt financing, it added.
As part of the deal, Principal at Quona Capital Varun Malhotra will join Arya’s Board. Investment bank IndigoEdge was the exclusive advisor on the deal.
The fresh funding will be utilized to strengthen the startup’s post-harvest services and market linkages platform, and to expand financing to farmers through Arya’s fintech arm Aryadhan, the statement noted.
The problem Arya is trying to solve
Arya Co-founder and CEO Prasanna Rao said in the statement, “Of the food grains worth US$130 billion produced by India annually, there are huge losses in primary and secondary markets due to lack of storage, forcing farmers to sell off-cycle for lower returns.”
Food waste is a dire problem in India. According to UN estimates, over 40% of food produced in India is wasted before reaching consumers. The COVID-19 pandemic has only compounded the problem. According to data released by the Ministry of Consumer Affairs, over 1,550 metric tons of food grains were damaged in Food Corporation of India (FCI) warehouses during the lockdown period.
This fear of wastage due to lack of proper logistics and storage facilities often forces farmers into distressed sale of produce.
“These same farmers are dependent on financing for their cash flow needs but are vastly underserved, hurting their ability to store and sell their produce optimally,” Rao said. “Arya’s digital solution pairs warehousing with financing and critical market linkage services to help smallholder farmers thrive.”
Arya’s post-harvest services include logistics, warehousing supported by a web-based software, fumigation of commodities in transit and in storage, quality testing, handling of agricultural cargo at the port and railway rake points.
The startup’s clients include farmers, farmer producer organizations (FPOs), financial institutions, SME agri-processors, commodity traders and corporate agribusinesses, the statement noted. Arya has over 2.5 million metric tons of storage capacity across 1,500 warehouses in India.
Arya’s non-banking financial company (NBFC) subsidiary called Aryadhan Financial Solutions provides financing and related services to farmers to avoid distressed sales. According to the company, it has completed loan disbursements of nearly $34 million (INR 2.5 billion).
According to Quona Capital Co-founder and Partner Ganesh Rengaswamy, “Arya is addressing a vastly underserved market of farmers in India, half of whom previously had little access to post-harvest finance.”
“We believe Arya’s unique approach, providing a full-service digital platform with embedded finance and differentiated efficiencies for small farm-holders, will drive the future of farming in India,” he added.
Header image by Warren Wong on Unsplash