Krishi Star

Aug 30, 2016

Whatsapp Google Mail Print Reddit Stumbleupon Subscribe Pinterest Digg Delicious Advertisement Artha Venture Challenge (AVC) and Upaya Social Ventures are excited to announce a co-investment in Mumbai-based Krishi Star, an agri startup dedicated to improving livelihoods for small farmers in India by building a food brand that sells products produced through a farmer-owned supply chain. Menterra Venture Advisors Private Limited will provide the company non-monetary support. The Artha Initiative, under which the Artha Venture Challenge has been launched, has provided the company seed investment, while Menterra – which collaborates with AVC to invest in and incubate social enterprises in India – will support the company with strategic guidance to help grow the business. Upaya Social Ventures is co-investing in the company as well, along with 1to4 Foundation, a Swiss non-profit that invests in start-up and early-stage social enterprises, and a Mumbai based angel investor. Food processing is a high potential industry, growing at over 20% per year, yet farmers do not consistently enter into it because of lack of market access and understanding of quality requirements. On the market side, buyers of fresh and processed foods cannot source consistent quality due to insufficient infrastructure and a fragmented supply chain with inconsistent inputs. “By leveraging and aggregating existing farmer assets and providing a brand that ensures quality and consistency to end customers, we can greatly increase the efficiency and quality of India’s food supply chain and bring a large portion of this created value to farmers,” said Bryan Lee, co-founder of Krishi Star. “We are excited about this space because of the tremendous potential for sustainable social impact at scale.” Bryan believes that the problem with farming in the long-run is actually a problem in the very nature of the economics of farming, a problem which could best be solved by transforming rural economies. And so Krishi Star was launched in 2014, with a model that approaches improvement of farmer livelihoods from a demand-pull perspective. It acts as a platform matching farmer-owned capacity and market-demand. “Our vision is a scaled solution through which to improve livelihoods for the nearly 200 million people in India living in rural poverty. Our current strategy is for farmers to benefit in two main ways – first, the small farmers, as the owners of processing factories, would receive a higher stable form of income independent of the success of their individual harvests; second, the factories procure from the farmers and as such, create additional stable demand for the farmers’ crops,” added Bryan. Krishi Star is currently working with farmer-owned food processing units and has developed a product portfolio including tomato puree, whole-peeled tomatoes, and sun-dried tomatoes. The company is selling its products in Mumbai and Pune to hotels, restaurants, and catering groups. “We have a particular interest in supporting the work of producers through the development of agri-processing, and we have been delighted to see that Krishi Star has demonstrated great resilience and commitment to serving its core communities,” said Audrey Selian, Director of Artha Initiative. “Krishi team has brought to the market some interesting products and there are more in their pipeline. They have also built strong partnerships for sourcing and processing. These will help the company grow faster and will help many more farmers to earn a greater percentage of the end price of their produce. That excites us,” said Sreejith Nedumpully, Director, Upaya Social Ventures India. “We are optimistic about Krishi Star’s potential to scale and are looking forward to working with the Krishi Star team to build their business and its social impact,” said AB Chakravarthy, Senior Investment Manager, Menterra. “Menterra and AVC’s advisory will be invaluable when we go to scale and raise our next round of funding,” said Bryan, adding, “We are also keen on tapping into their network of advisors across industries and geographies.” The agricultural startup space has been seeing more entrants seeking to address challenges faced by small and marginal farmers. Recently, another Villgro incubatee, Flybird Innovations, which is developing an affordable smart irrigation controller to help small farmers’ micro-irrigate their crops, received funding from a collaboration of investors and incubators. Recognising the need for investing in agricultural startups, Menterra’s incubation partner, Villgro, has been working with partners like the Rianta Capital’s Artha Initiative to bring more investment and incubation support to social entreprises. Additionally, Menterra and Artha Venture Challenge are collaborating to co-incubate and co-invest in scalable agri-enterprises that can create impact on the lives of small and marginal farmers. Entrepreneurs running early-stage for-profit enterprises that help small and marginal farmers can get matched equity funding of up to Rs 60 lakh, high-touch mentoring from agri-business experts and access to networks and downstream investors. Eligible enterprises can apply now for incubation support. 39