TPG to invest $50m in India's Dodla Dairy, Proterra to exit

The commitment will be made through the Rise Fund, a social and environmental impact investment vehicle managed by TPG Growth, according to a release. The deal is subject to regulatory approval in the next few weeks.

Founded in 1995, Dodla sells fresh milk and other dairy products such as cheese, butter and ghee across nine states in south India. It primarily sources milk from a network of 250,000 local smallholder farmers, who receive assistance in accessing affordable animal feed, veterinary treatment and other services through a farmer engagement program. The company also partners with banks to help farmers secure financing to improve their facilities.

“India has more dairy farmers than any other country, and is the world’s largest and fastest-growing producer of milk. Yet many of the small farmers who produce that milk do not have access to the basic tools and networks necessary to sustainably and reliably generate profits,” said Bill McGlashan, founder and managing partner at TPG Growth and co-founder and CEO of the Rise Fund.

“Investments that facilitate stronger and more efficient market links in this food value chain can help to significantly reduce rural poverty.”

Proterra committed INR1.1 billion ($20 million) to Dodla in 2012 for a stake of undisclosed size. At the time the firm was part of Black River Asset Management, the alternative investment unit of agribusiness giant Cargill. It later spun out from Cargill in 2015 to pursue agriculture-focused investments independently.

This is the Rise Fund’s first investment in India and in the food and agriculture sector. The fund was launched in December and seeks opportunities globally across a range of sectors including education, energy, food and agriculture, healthcare and financial services. The vehicle reportedly has a target of $2 billion.

A number of PE funds have invested in India’s dairy space in the last year, expecting demand to increase among India’s growing middle class. Deals include a INR1.1 billion investment in Dairy Classic Ice Creams by Motilal Oswal Private Equity and a commitment by KKR to provide INR5.2 billion to dairy products provider Kwality through a structured finance transaction.

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• Topics
• South Asia
• Consumer
• Expansion
• Trade sale
• India
• TPG Capital
• Proterra Investment Partners
• Agriculture
• Growth capital