Ergos, a groundbreaking agritech startup, has successfully garnered $10 million in a Series B funding round to expedite the expansion of its revolutionary farm-gate-based Grainbank model. This unique model is transforming agriculture by connecting farmers directly to markets and providing secure grain storage, affordable financing options, and technology-driven post-harvest supply chain solutions.
Funding Details:
This substantial funding was realized through a harmonious blend of equity and debt, with the lead investor being Abler Nordic, a renowned financial inclusion fund based in Norway. Contributing alongside Abler Nordic were existing investors including Aavishkaar Capital, Chiratae Ventures, and Trifecta Venture Debt Fund.
Background:
Ergos, founded in 2012 by entrepreneurs Kishor Kumar Jha and Praveen Kumar, is centered around an innovative Grainbank model. This model is instrumental in linking farmers to markets and providing them with secure grain storage facilities, access to affordable finance through collaborations with lenders, and enabling them to secure better prices for their produce.
Ergos is catalyzing a paradigm shift in agriculture by integrating small and marginal farmers into mainstream economic activities. The firm allows farmers to store their harvest for nine months and extends credit up to 70% on the stored grains, empowering farmers to make informed decisions about selling and storing their produce.
Impact and Expansion:
According to Ergos, their approach has already been instrumental in supporting over 160,000 farmers and has established an extensive network of farm-gate-based warehouses in more than 200 locations across Bihar, Karnataka, and Maharashtra. The company reports that over the past decade, it has been instrumental in amplifying the incomes of farmers by approximately 30-35% annually.
Kishor Jha, the CEO and Founder of Ergos, expressed his enthusiasm about the vast opportunities ahead, stating, “We are overwhelmed by the immense opportunity ahead of us, and we intend to further deepen our presence amongst the farming community even whilst we rapidly scale our operations.”
The Agritech Ecosystem in India:
The agritech landscape in India is burgeoning with over 1,000 startups, diligently working towards enhancing farming techniques. These startups have experienced substantial growth, raising approximately Rs 6,600 crore in the past four years, marking a 50% annual growth rate as per the Economic Survey 2022-23.
Recent notable developments in the sector include Leads Connect acquiring Rs 500 Cr from BL Agro Industries to fortify its technological foundations and escalate research in deep technology and AI/ML domains. Additionally, NABVENTURES invested Rs 10 crore in Satyukt Analytics to refine its Sat2farm app, which is revolutionizing farming with data-driven insights.
Previous Investments:
In 2021, Ergos achieved a milestone by securing Rs 22.5 crore from British International Investment (BII), part of its Series A funding. The total funding raised in that round reached Rs 81 crore, with significant contributions from Aavishkaar Capital and Chiratae Ventures.
Investor Insights:
Shashvat Rai, a partner at Aavishkaar Capital, emphasized the pivotal role of Ergos in reshaping the agritech space. He commented, “The ability of the app-based interface to facilitate trades & financing while serving smallholder farmers and creating strong network effects positions Ergos for rapid expansion in India’s vast grain market.”
Conclusion:
The investment in Ergos underscores the significant potential and need for innovative solutions in the agricultural sector. Ergos’ Grainbank model is a beacon of transformation, emphasizing the empowerment of farmers, the fundamental entrepreneurs in global food supply chains. The recently acquired funding is poised to fuel Ergos’ mission to bring optimal agricultural practices, competitive pricing, and financial inclusion to the farming communities, ultimately propelling a comprehensive evolution in the agricultural ecosystem of India. The rapid advancement and adoption of agritech solutions are not only reshaping agricultural practices but are also pivotal in addressing the overarching challenges and opportunities in the agriculture sector, paving the way for a sustainable and prosperous future.
