Lok Capital leads $6.6m round for Indian dairy brand

Domestic venture investor Aavishkaar also participated in the round via its India II fund. Lok invested through its third fund, which achieved a first close earlier this year at $40.5 million.

The capital will be used to expand production capacity and distribution. This effort will be focused on the eastern states of Jharkhand and Bihar, where a supply-demand gap is estimated to have resulted in dairy consumption being almost 50% lower than the national average. HR Food has already leveraged the fundraise to acquire a new dairy plant in the region and is looking at other potential acquisitions.

Osam was launched last year in Jharkhand and has since established a network of more than 3,000 retailers across the state. Its procurement network includes about 10,000 dairy farmers, processing around 40,000 liters of milk per day. India's dairy market is said to be the largest in the world at 400 million liters of production per day and is expected to see annual growth of 16% to reach $155 billion by 2020,

"Given the large opportunity present in the dairy industry and the significant scope for high-quality private sector players to operate in the space, Lok is keen on backing integrated business models that make dairy and agriculture more sustainable for farmers," Rajesh Babu, a director at Lok, said in a statement.

Founded in 2004, Lok aims to foster inclusive socioeconomic growth through development investments targeting companies that cater to India's large, underserved population segments. Previous activity by Fund III includes participation in a $3.5 million Series A round for low-income property finance company Ummeed Housing Finance.

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