Vegrow raises funding to tap India's $50 bn fruits, vegetables segment

Vegrow, a business-to-business agritech platform for fruits and vegetables, has raised $13 million in a series A investment round co-led by Lightspeed Venture Partners and Elevation Capital. The round also saw participation from existing investors Matrix Partners India, Ankur Capital, Better Capital and Titan Capital.

Established in 2020, Vegrow has scaled rapidly among both farmers and B2B customers, resulting in nearly 20x top-line growth with a presence in over 30 cities. At the heart of this growth is their unique technology platform, which powers everything from farm discovery, produce quality profiling, market intelligence to smart matchmaking between farm-level inventory and customer requirements. The impact of this platform is clear in deep customer love and positive unit economics early on in the company’s journey.

The funding would help the firm to expand to 100 cities, invest in technology and launch new products. Vegrow was founded by IIT alumni Praneeth Kumar, Shobhit Jain, Mrudhukar Batchu and Kiran Naik.

“At Vegrow, we focus on select products as compared to building a large basket. Each of these products is a multi-billion dollars’ opportunity,” said the founders of Vegrow. “This enables us to go deep in the product value chain and unlock massive growth in this sector. In fact, we have become one of the largest companies for pomegranates in the country in less than a year,” they said.

While India’s B2B agri market is attractive at $300 billion, it is also a complex maze of fragmented supply with over 120 million farmers growing across 30 states. Vegrow is on a mission to unlock the power of India’s agri value chain, initially focusing on the $50 billion fruits and high-value vegetables segment. The company addresses challenges around farmland under-utilization and supply fragmentation for farmers and delivers consistent quality along with fill rate to customers. Their unique farmer engagement model and tech-driven quality profiling are core to delivering higher returns to farmers, reducing supply-chain wastage and improving procurement for wholesalers.

“Agriculture as a sector has largely remained removed from digital disruptions, despite the strong tailwinds of increasing internet penetration and adoption,” said Akarsh Shrivastava, vice president, Elevation Capital. “We believe any effort to digitize these value chains will have to keep farmers and their interests at the core. Vegrow’s farm-centred approach, coupled with strong insights, which are allowing the team to fundamentally re-imagine and augment these supply chains, stood out in our interactions.”

Vegrow’s developed deep agri expertise as well as a hyper-growth marketplace culture having previously worked across companies such as ITC, Urban Company and Chronus. This combination of deep agri value chain knowledge, product thinking, and farmer-empathy makes for a powerful driving force in the sector.

Ritu Verma, partner, Ankur Capital said while Indian consumers and businesses have seen tremendous changes in the past 10 years through several waves of innovation, the reality is that fruits and vegetables are grown by independent farmers in a nearly identical manner, and with dwindling yields. “Vegrow’s tech-enabled processes allow the company to grow their margins while also driving value to the farmers they work with,” said Verma.

Vaibhav Agrawal, partner, Lightspeed, said that having invested in commerce companies like Pinduoduo, OYO and Zetwerk, the firm has realized that the number one pressing need of the small supplier, a farmer in this case, is higher revenue realization. It’s not accessing inputs, credit or crop advisory.

“Therefore, we believe companies building marketplaces between farmers and buyers, using technology to eliminate inefficiencies will have the largest market opportunity eventually,” said Agrawal.

Sudipto Sannigrahi, vice president, Matrix India, said the Vegrow team has the unique experience and know-how of grassroots agriculture. “Infact, a few co-founders come from farming familie! — and of building high growth internet marketplaces,” said Sannigrahi. “We love the company’s focus on aggregating fragmented farms to help unlock economies of scale with technology-led interventions which has enabled them to scale rapidly and profitably over the last 12 months. We believe they are well-positioned to emerge as the front runners of this space and streamline India’s largest yet unorganised industry,” he said.