India's Omnivore hits $150m first close on third fund

A final close is expected before year-end. The fund launched in April last year with initial investments from development finance institutions International Finance Corporation and FMO of the Netherlands.

LPs also include KfW, Self Reliant India Fund, Swiss Investment Fund for Emerging Markets, Bill & Melinda Gates Foundation, Louis Dreyfus Company Ventures, Dutch Good Growth Fund, Belgian Investment Company for Developing Countries, and Yara Growth Ventures.

“People liked the fact that we’ve been working in the ag sector for over a decade, and we’re the oldest, largest agri-tech-agri-food investor in India,” said Mark Kahn, a managing partner at Omnivore.

“There’s actually quite a bit of LP bullishness right now because I think there’s a recognition that vintage 2023 and probably 2024 funds are going to do very well. Prices are so low right now that there’s almost a value angle to it at this point.”

Khan founded Omnivore in 2010 alongside fellow managing partner Jinesh Shah (pictured, left to right) as a quasi-corporate VC unit of Indian food and agri conglomerate Godrej Agrovet. A debut fund closed in 2014 with about USD 30m in commitments. Fund II closed on USD 97m in 2019 with a similar mix of LPs.

The vision is to holistically solve the systemic problems in Indian agriculture. This includes issues related to farmer profitability and farmer resilience, agricultural sustainability and climate, both in terms of mitigation and adaptation.

Part of the challenge is that the agriculture industry in India has a relative lack of large players like Godrej Agrovet which could attract and retain the country’s best technological talent. Part of Omnivore’s mission is to do catalytic work to this effect.

“The life science eco in Indi has never taken off the way it should. India punches above its weight digitally in hardware and software and well below its weight in life sciences,” Khan said. “There are more Indian passport holders doing cutting edge life science research in greater Boston than in the entire subcontinent.”

Ominvore has achieved at least five exits via sales to strategic and financial investors. It expects to see its first IPO exits in 2024 or 2025, with agriculture platforms like DeHaat, Arya, and Stellapps the most likely candidates. DeHaat, which claims to be India’s largest full-stack agtech platform, raised a USD 60m round featuring Sofina and Temasek Holdings in December.

There have been two exits during the fundraising period. A stake in aquaculture internet-of-things start-up Eruvaka was sold to Dutch animal nutrition company Nutreco in last July, while precision sprayer maker Mitra was sold to local farm machinery giant Mahindra in March. Financial terms were not disclosed.

The strategy for Fund III will be broadly similar to its predecessors except there is an expectation to lead and participate in more Series A rounds due to a recent correction in start-up valuations. Khan observes that in 2021, investors could typically acquire 20% of a start-up at Series A for USD 12; now the same stake can be acquired for as little as USD 6m.

The fund will make 25-30 investments, writing cheques of USD 1-5m. The first few deals are set to close next month. They will include a farmer platform and an agri-food life sciences company. Rural financial technology is also a target theme.

“India is one of the few countries in the world that could double its productivity in agriculture, or triple it, and actually feed the world out of India,” Khan said. “Our vision is to make India an agricultural superpower in smallholder agriculture as opposed to corporate agriculture, which would never happen in an Indian context.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Fundraising
• Venture
• Technology
• Industrials
• GPs
• India
• Omnivore Partners
• IFC
• FMO
• Agriculture
• Agritech
• Impact investment