Aavishkaar Capital, the impact investment arm of the Aavishkaar Group, on Wednesday, said it has invested Rs 35 crore ($5 million) more in its existing portfolio firm Ergos Business Solutions Pvt. Ltd.
The investment is part of the Series A funding round of Ergos, Aavishkaar said in a statement. The agri-tech startup is looking to raise a total of Rs 100 crore as part of this investment round.
A Limited Partner (LP) in Aavishkaar Capital and a technology venture capital fund are also set to participate in this round, the statement added without disclosing their identities.
Ergos, which was founded by Kishor Jha and Praveen Kumar in 2010, has been building a "Grain Bank" model that is aimed at the small and marginal farmers in India. The model, which has been piloted in Bihar, helps farmers digitize their food grain and provide doorstep access to end-to-end post-harvest supply chain solutions. Currently, the technology platform of Ergos supports more than 20,000 farmers and it has a presence in more than 60 locations.
Jha, who is also the CEO at Ergos, said the company aims to rapidly enter nearby states and serves more than a million farmers by 2025 with over 2,000 branch locations.
Vineet Rai, founder and managing partner at Aavishkaar Capital, said the business model of Ergos is a "beautiful combination" of entrepreneurial spirit, technological intervention and massive demand-pull that matches the criteria of the investment firm.
Aavishkaar had first invested Rs 4.2 crore ($640,000) in Ergos in 2015. In 2017, the impact investment firm had put additional money in the company, VCCircle had reported.
The Aavishkaar Group is one of the world’s largest impact investors. It helps entrepreneurs via equity funding, venture debt, microfinance, investment banking intermediation, consulting, research and access to global networks.
It has raised six funds so far and says it currently has $450 million in assets under management. The group claims its investments have impacted over 105 million lives, and creating over three lakh jobs. Companies in the group’s portfolio include AgroStar, Butterfly Edufields, PayWell, Fabelio, The Karadi Path Education Company, and Soulfull.
Earlier this month, Aavishkaar Capital had invested $5 million fintech startup Chqbook.com.
Deals in the agri-tech segment
Ergos is among the several startups in the agri-tech sector to receive interest from strategic players and investors, especially social-impact backers. Players in the segment seek to address gaps in India’s existing agricultural processes and provide fair economic incentives to farmers and other members of the ecosystem.
Earlier this month, Arya Collateral Warehousing Services Pvt. Ltd, which runs the post-harvest services-focused agricultural-technology platform, raised $6 million in pre-Series B funding from Omnivore and LGT Lightstone Aspada.
Last month, for example, VCCircle reported that the Green Agrevolution Pvt. Ltd-operated DeHaat was set to raise funding from the venture capital arm of a development finance institution. In March 2018, DeHaat had raised $4 million (Rs 27.5 crore) in a pre-Series A round from Omnivore and US investor AgFunder.
In January, agriculture enterprise resource planning platform FarmERP raised Series A funding from software company TechnoGen IT Services India Pvt. Ltd. In December last year, Sathguru Catalyst Advisors, the asset management arm of Innovation in Food and Agriculture Fund, said it would invest up to $6 million in Nu Genes Pvt. Ltd, a seed company focused on nutrition crops.
