Agritech-focused venture capital firm Omnivore has marked the first close of its third fund at $150 million (about Rs 1,230 crore) and now aims to secure more commitments from limited partners than it initially set out to raise last year.
The firm aims to close the Omnivore Agritech and Climate Sustainability Fund 3 at $175-180 million next year, managing partner Mark Kahn told VCCircle Wednesday.
Omnivore, which has backed startups such as DeHaat, BharatAgri, BioPrime, ReshaMandi and Ecozen, floated the fund in April 2022 with an aim to raise $130 million.
For the first close, a fundraising milestone that allows it to start deploying the capital, the venture capital fund received commitments from new limited partners such as the government-backed Self-Reliant India (SRI) Fund and International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group.
The Bill and Melinda Gates Foundation Inclusive Agritech Facility, Louis Dreyfus Company Ventures and Yara Growth Ventures also joined as new LPs to the fund.
Omnivore’s existing limited partners that contributed to the fund include Germany's KfW, Dutch development bank FMO, Swiss Investment Fund for Emerging Markets (SIFEM), the Dutch Good Growth Fund (DGGF) and the Belgian Investment Company for Developing Countries (BIO).
From the third fund, the VC firm plans to make 25-30 new investments at the seed to Series A stages of agritech startups. Omnivore, which typically invests $1-2 million, aims to increase cheque sizes to as much as $5 million and lead some investments in the Series A round. It led only seed-stage investments from the previous two funds.
In terms of the key sub-sectors that the firm is targeting, Kahn said agrifood life sciences, rural fintech, and climate-smart agriculture will be given primacy.
“Our new fund will focus on catalyzing climate action in agriculture by funding startups addressing climate mitigation and climate adaptation,” said Kahn.
Founded in by Kahn and Jinesh Shah in 2010, Omnivore has been investing in India over the past decade. It has bet on over 40 agritech startups. It has fully deployed its second fund, which marked the final close in April 2019 at $82 million, overshooting the initial target of $75 million. Omnivore raised its first fund in 2013 with a corpus of Rs 260 crore.
The firm has also exited two startups. In July 2022, Omnivore sold its stake in aquaculture internet-of-things (IoT) startup Eruvaka to Nutreco, an animal nutrition and aquaculture-based company. VCCircle had reported that the acquisition was done for $40-50 million and Omnivore, which had invested a total of around $1.6 million in Eruvaka, made 9-10x returns from this investment.
Subsequently, in March 2023, Omnivore sold its stake in precision sprayer manufacturer MITRA to Mahindra Group. According to VCCircle’s estimates, the agritech-focused VC churned out an internal rate of return of around 7%.
