Software as a service (SaaS)-based food supply platform FarMart has raised $32 million in a Series B financing round led by General Catalyst, with participation from existing investors, Matrix Partners India and Omidyar Network India.
SaaS has been one of the hot themes for investments since last year. According to a report by consultancy firm Bain and Co, consumer technology, fintech, and software as a service (SaaS) accounted for more than 75 percent of the VC investments in terms of overall deal value. Further, food supply platforms have also been gaining traction. Tiger Global-backed seafood marketplace Captain Fresh raised $50 million earlier this month.
FarMart was founded by childhood friends, Alekh Sanghera and Mehtab Singh Hans. The business-to-business (B2B) startup enables food businesses to source quality products in large quantities directly from the farm.
“Farmers have to travel 25-30 kilometres to access a formal marketplace. Leveraging the proximity, social capital and infrastructure of these agri-retailers, we are able to source directly from farmers in a capital efficient and non-linear manner. Removing excessive intermediaries helps in providing better prices to farmers, reduces direct cost and reduces spillages/wastage up to 10-15 percent,” explains Mehtab Singh Hans, Cofounder, FarMart.
With this round, the company has so far raised $48 million (Rs 366 crore). With the fresh fund, the startup plans to fuel the growth of FarMart’s digital distribution network across India and to export markets. The company also plans to make key investments in R&D, automation and technology.
FarMart has 60,000 retailers onboard and serves 2 million farmers through its mobile app. It banks on tech and data to source at scale and uses underutilised assets in the food value chain to build a high growth and contribution margin profitable business.
“We have built a retailer-centric solution at the intersection of data, hyperlocal serviceability and underutilised assets. The entire team is driven by the ambition and opportunity to build India’s largest food supply platform,” says Alekh Sanghera, Co-founder and CEO of FarMart.
“The fast-growing B2B platform activates critical connections between farmers and agri-retailers, enabling millions of farmers to supply fresh produce to consumers all over India, creating powerful, positive change for these stakeholders," said Deep Nishar, Managing Director, General Catalyst (lead investor).
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