Riding on pandemic tailwinds, agritech startup Crofarm Agriproducts has raised a $10.2 million (Rs 76 crores) Series A round of financing for its community group buying platform Otipy.
The round was led by global venture capital firm SIG. Omidyar Network India and Innoven Capital participated in the round along with returning investors IPV (Inflection Point Ventures), Pravega, and FactorE.
Crofarm, which was primarily a business-to-business (B2B) platform supplying fruits and vegetables to retailers, forayed into online groceries with Otipy during early days of Covid-19 pandemic in 2020. Otipy operates a farm-to-fork delivery model by procuring directly from farmers and delivering fresh produce to consumers. The company claims its proprietary demand prediction engines ensure little or no stocking of fresh produce and delivers the produce in less than 12 hours.
Founded in 2016 by former Grofers executives Varun Khurana and Prashant Jain, the B2B business under the brand name of Crofarm supplies fruits and vegetables, sourced from farmers in Haryana, Uttar Pradesh, Delhi, Gujarat, Himachal Pradesh, Karnataka, Rajasthan and Maharashtra, to over 5,000 retailers.
“This new round of funding will support us in our future growth trajectory, adding additional categories on our supply chain making it more efficient and accelerate our mission of making fresh, nutritious food accessible to all. Fresh produce is a 35%-40% gross margin category, however, it is the wastage that kills those margins. We are amongst the first companies that have been able to control it via our innovative model,” Khurana said.
According to the company, Otipy sources over 2,500 tonnes of fresh produce every month from more than 10,000 farmers across the country.
“Farmers partnering with Otipy earn up to 20% more and are paid faster too. Their Community Leader delivery partners are also able to make sizable additional incomes, in the range of tens of thousands rupees per month. This resonates with our focus on increasing value realization for farmers and the ecosystem by enabling better access to markets and aggregation opportunities,” Madhav Tandan, Director Investments at Omidyar said.
Otipy had earlier raised $2 million in 2020 led by IPV.
The increased digital shift during the pandemic has turned the online grocery businesses into a much higher stakes game. The growth momentum led to one of the largest consolidations in the sector as Tata Digital, a 100% subsidiary of Tata Group holding entity Tata Sons, acquired a majority stake in online grocery platform BigBasket in May.
Shortly after that, BigBasket’s primary rival and SoftBank backed e-grocery platform Grofers received an investment of $100 million from Zomato, which briefly dabbled with grocery delivery during the first phase of the pandemic.
