DeHaat, a startup that offers a wide range of agricultural services to farmers in India, has raised $60 million in a new funding round to deepen its penetration in the country and achieve break-even profitability within two years.
Sofina Ventures and Temasek jointly led the Series E financing of the Patna and Gurgaon-based startup, which is valued between $700 million and $800 million, according to a person familiar with the matter. Existing financiers RTP Global Partners, Prosus Ventures and Lightrock India also participated in the new round.
Agriculture is a $350 billion industry in India, but farmers face a myriad of challenges in the country that remained largely unsolved until upstarts like DeHaat arrived on the scene. Farmers are struggling to secure farm inputs, find buyers for their produce and maintain enough runway.
Giants like Reliance and Adani Group provide some services to farmers, but their involvement in the agricultural sector remains largely limited. A rapidly growing population and climate change mean that Indian farmers must quickly adopt technology to improve and maintain their yields.
DeHaat uses artificial intelligence to help 1.5 million farmers across 11 states, 110,000 villages and more than 150 zip codes in India obtain raw materials, find advisory and credit services, and sell crops.
The startup has onboarded more than 2,000 agricultural institutions, including input manufacturers, food and consumer goods giants, banks and insurance companies. It partners with more than 10,000 micro-entrepreneurs who help the startup run a maze of last-mile supply chains.
Over the past two years, DeHaat has expanded aggressively in several key Indian states, and co-founder and CEO Shashank Kumar told londonbusinessblog.com in an interview that the startup will focus on deepening its presence in the zip code areas where it is already operational in the immediate vicinity. future and achieving break-even profitability in 12 months.
The new funding gives DeHaat up to 40 months of runway, during which time Kumar said the startup will be profitable. “At least for the next three to five months we are not adding any new regions. We will continue to serve more farmers and broaden our network of centers in the states where we operate,” he said. DeHaat is currently not present in the South Indian states. Kumar said the startup is hopeful of expanding to those states in about a year.
Kumar acknowledged that raising funds in the current market scenario is no easy feat. Funding inflows to local startups have shrunk by more than 80% as investors became more cautious following a sharp turnaround in global market conditions.
“The lens is different – everyone is looking for assets that have a clear path to profitability,” said Kumar. “In that way, DeHaat had its own advantage – our unit’s economy is very strong, whatever we have, it’s for adding geographies. We increased the round to be ready for all future opportunities,” he said , adding that DeHaat still has about two-thirds of the money left over from the previous $115 million funding round.
He said the startup, whose name means village in Hindi, has acquired about six companies in recent quarters and sees more M&A potential ahead and is ready to execute when it finds the right partners.
“With the intent to contribute to sustainable development goals, Sofina supports organizations that have a positive impact on their communities and the environment. We continue to be impressed by DeHaat’s vision and strive to empower farmers and local communities, and with this additional funding we hope to create an even deeper and broader impact across the existing network and new geographies,” said Yana Kachurina , Principal at Sofina , in a statement.