IFU leads $23m Series B for Indian agrilogistics firm
Leap India Food Logistics (LIFL), an Indian agricultural warehousing and logistics firm, received INR1.64 billion ($23 million) in a Series B round led by the Investment Fund for Developing Countries (IFU), a Danish development finance institution.
The investment comes from IFU’s SDG Investment Fund with additional capital contributed by the Neev Fund, an infrastructure vehicle run by the UK’s Department for International Development (DFID) and State Bank of India. The Neev Fund previously contributed $10 million to an LIFL subsidiary in 2018.
Founded in 2016, LIFL primarily focuses on manufacturing and operating modern silos - steel or concrete tanks built to store grains. Modern silos require less land and result in improved grain preservation unlike makeshift cover and plinth structures or traditional warehouses. However, they cannot store multiple commodities at the same time.
LIFL says it has built seven modern silos after winning tender contracts awarded by the Food Corporation of India (FCI). FCI pays a fee for these silos that are used by local farming communities. According to a five-year government plan, grain storage using modern silos is expected to increase from 700,000 tonnes to 10 million tonnes by 2023.
The fresh capital will support the pursuit of more contracts and building additional units with a focus on states with lower grain production levels. The company will also develop skill development institutes in local communities. LIFL is also affiliated with PSG Group, a leading charity in south India that owns energy, textile, sugar, IT and engineering businesses. PSG also runs over 20 educational institutes.
"By investing in Leap, we are addressing one of India's most pressing challenges, namely helping to improve food storage efficiency and reduce undernourishment, while having secured an attractive risk vs. return profile in the deal," said Deepa Hingorani, vice-president for South Asia at IFU.
Established in 2004, IFU raised the $750 million SDG Investment fund last year. Previous investments include Africa Education Holding, a labor skills development institute, and a Ukraine-based solar power plant.
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