Agritech startup Produze raises $2.6 million in seed funding from Accel, All in Capital

Produze, a startup aiming to connect farm producers and international retailers, on August 9, raised $2.6 million in seed funding led by venture capital firms Accel and All In Capital.

Ben Mathew, co-founder and chief executive officer (CEO) of Produze, in a virtual interaction with Moneycontrol, said the funds raised will be used to build distribution capabilities, expand procurement sources, and strengthen Produze’s tech team.

Founded in February 2022, by former Ninjacart executives, Mathew and Gaurav Agrawal, along with Rakesh Sasidharan, and Emil Soman, Produze is a B2B (business-to-business) platform that enables agricultural producers including farmers, processors, and packing houses, to sell directly to international retailers.

Mathew said that Produze's platform is now live and also inviting applications for retailers and agricultural producers. “Currently, we are procuring directly from producers in India and are serving a couple of large retailers and distributors in the Middle East region. And we're doing this in pulses and spices right now and next week, we are launching fruits and vegetables as well,” he said.

Produze aims on helping producers with higher margin international distribution and retailers with affordable, good quality products that are easily available.

In a statement, the company said it will serve multiple farm produce categories in countries within North America, Europe, and the Middle East, serving, what it claims to be, a $143 billion market.

"At Accel, we’re excited to partner with the Produze team to help digitize the global agri-trade. We feel Produze technology and supply chain capabilities can help improve the selection of fresh farm produce for customers at more affordable prices while compensating the producers fairly," said Pratik Agarwal, Principal at Accel.

Also Read: Agritech startup Growcoms raises $1 million

According to Mathew, the team at Produze currently has eight people including the founders, and they plan on using more technology and fewer people, even later when they scale.

He added, “We want to build a lean business that operates with a lean team and more with technology. Even when we want to scale up, we want to be not more than 30 people while we're doing $50-60 million in revenue over the next one and a half years.”

The co-founder said that in B2B businesses like Produze it is important to prioritise profitability and growth would be a byproduct of the process. “Unlike a B2C business where you can be unprofitable initially and later charge profits from the customer, in B2B it's very important to be profitable from day one,” said Mathew.

He added, “In the current ecosystem, most of the usage is generated through discounting or doing unprofitable transactions. That is not something that we want to focus on as we feel it is unsustainable, especially in B2B.”

Produze’s seed round also witnessed participation from Angel investors like Thirukumaran Nagarajan, CEO of Ninjacart, Pawan Gupta, CEO of Fashinza, and Angad Kikla, Co-founder of CityMall, among others.