Prosus Ventures Invests $30M in Dehaat

Agritech companies in India are increasingly attracting attention and investment.

DeHaat, an online platform providing comprehensive agricultural services to farmers, announced on Tuesday that it has secured $30 million in a new funding round as the company aims to continue its rapid expansion despite ongoing global challenges.

Prosus Ventures, previously known as Naspers Ventures, spearheaded the Series C funding for the Patna and Gurgaon-based startup. RTP Global and current investors including Sequoia Capital India, FMO, Omnivore and AgFunder also contributed, bringing the total funding raised by the company to over $46 million. (Dexter Capital served as the advisor for this funding event.)

A significant obstacle for Indian farmers is obtaining essential agricultural inputs like seeds and fertilizers, and subsequently locating purchasers for their harvests.

DeHaat, meaning “village” in Hindi, addresses this issue by connecting brands, financial institutions, and buyers on a single platform, accessible via a helpline and a mobile application in local languages.

Industry estimates suggest that only approximately one-third of the produce from Indian farms reaches major markets, as farmers traditionally encounter difficulties in finding buyers for their crops.

Following the harvest season, DeHaat facilitates the sale of farmers’ yields to large-scale buyers such as business-to-business marketplace Udaan, Reliance Fresh, and food delivery service Zomato.

Over the past decade, the startup has also created a database of crop analyses and utilizes artificial intelligence to offer farmers personalized, no-cost recommendations regarding optimal seasonal planting choices. DeHaat also assists farmers in securing operational capital through collaborations with numerous financial institutions.

We previously covered DeHaat last year when it completed a $12 million funding round. The subsequent nine months have been characterized by accelerated growth, even amidst the coronavirus pandemic and the resulting nationwide lockdowns.

The startup now operates in eastern India – specifically in the states of Bihar, Uttar Pradesh, Jharkhand, Odisha, and West Bengal – and currently serves nearly 400,000 farmers, an increase from approximately 210,000 in April of the previous year, according to Shashank Kumar, co-founder and CEO of the company, in an interview with TechCrunch.

The approach the startup takes to overcome these hurdles is particularly noteworthy. It collaborates with around 1,400 micro-entrepreneurs, a rise from about 400 last year, in rural areas who distribute over 4,000 different types of agricultural input products to farmers from regional centers and then collect the harvested produce from the same locations. “These individuals are responsible for final-stage delivery and consolidation,” he explained.

DeHaat has experienced growth across all areas, including its revenue, which has increased by a factor of 3 to 3.5 since last year.

“By the end of March, our daily outbound volume was around 200 metric tons. Currently, it exceeds 600 metric tons. Each day, we consolidate this amount from farmers and supply it to FMCG companies and modern retail outlets. Similarly, regarding agricultural inputs – seeds, fertilizers, and pesticides – we process close to 10,000 orders daily, compared to approximately 2,600 in March of last year,” he stated.

“Prosus Ventures invests in industries globally where innovation can substantially address significant societal needs,” said Ashutosh Sharma, Head of India Investments at Prosus Ventures, in a press release.

“DeHaat is serving a substantial market in India, with the agriculture sector contributing over $350 billion to the nation’s economy and encompassing an estimated 140 million+ farmers. Through its comprehensive agricultural service offerings, DeHaat will have a significant positive societal impact in India, enhancing the income potential for Indian farmers and overall sector yields, while also creating opportunities for microentrepreneurs throughout the country, including in rural areas where income opportunities are often limited,” he added.

The startup intends to use the new funding to expand its operations to additional states in India, including Rajasthan, Madhya Pradesh, and Maharashtra, with the ultimate goal of serving 10 million farmers.

Another key focus area will be the recruitment of skilled technology professionals. The startup has doubled its workforce in the past year, bringing on board numerous experienced hires from leading companies. DeHaat, which recently completed its second acquisition, is also actively exploring further merger and acquisition opportunities, according to Shashank Kumar.

Agritech startups, once largely overlooked, have become increasingly prevalent in India in recent years – and many established companies are now receiving substantial investments.

Further reading: Omnivore and Accel recently published a report analyzing India’s agritech landscape.