What is funding? We almost daily receive news of funding for a startup. But have we ever stopped and thought, what does it mean? Why do the startups go through the process of funding? In simple layman’s language, funding is the process of infusing cash into the business.
Funding is the most critical process a startup undergoes because, without funds, startups and companies can do nothing. They need funds for everything, for expansion, for the hiring of new personnel, for the introduction of new lines of services and products. A startup in its lifetime goes through various rounds of funding with the help of investors who constantly have an eye on the startups.
Yes, nowadays, we are hearing and reading a lot of news about the funding of startups. One of the primary and significant reasons for this is that the economy faced a disastrous effect in 2020 when the governments imposed a lockdown at the central and state levels. We could not hear much news of fundings or changes happening in the startups because of this.
The economy became kind of stagnant, but the year 2021 has changed it. The lockdown has been removed, the economy has been opened up, and it is back in action. Now, that is why we hear daily some news of funding, mergers, or acquisitions, and whatnot related to the startups.
Announcement of the funding
FarMart has raised a funding of USD 10 million, as announced on October 21, 2021. This round of funding was the Series A round of funding and was led by Matrix Partners India. The other participants of this financing round were Innoven Capital and existing investors- Omidyar Network India, Avana Capital, and 500 Startups.
This round of funding also witnessed the participation of founder of Park+- Amit Lakhotia, Founder and Chief Executive Officer (CEO) of Jupiter- Jitendra Gupta, Founder of WestBridge Capital and Sequoia Capital India- KP Balaraj, Co-Founders of Mosiac Wellness- Revant Bhate, and Dhyanesh Shah, and founder’s fund of OfBusiness.
This round of funding had the exit of its early investors, who were Indian Angel Network and LetsVenture. The startup plans to employ the funds raised in expanding the startup’s distribution network across the country. It will also use the portion of funds to scale up the product capabilities and grow and increase the size of the team. This round of funding had taken place post the pre-series A round of funding, which took place in June this year when the startup had raised USD 2.4 million.
About the newly funded startup
FarMart is India’s first micro-SaaS platform for agriculture. The startup’s mobile application allows the users, who are the agri-retailers, to serve their farmers better by providing access to information, market linkages, and inputs. Many large businesses use the agri-retailer network of the startup to source quality produce directly from the farmers at affordable pricing. The startup aims to make food distribution capital-efficient, transparent, and financially rewarding for the agribusiness economy across the country.
Agri-Retailers– The benefits the platform of the startup has caused to agri-retailers are-
- 100% increase in income
- Better input credit recovery
- One-stop-shop for farmers: seed to harvest
Farmers– The benefits the platform of the startup has caused to farmers are-
- 10% higher price realization
- Better profit margin
- Faster payment post-sale
Food Business– The benefits the platform of the startup has caused to the food business are-
- Cheaper pricing
- 100% faster order fulfillment
- Assured quality and convenience
The startup’s supporters are- Matrix Partners India, Omidyar Network India, Avaana, Innoven Capital, 500 Startups, and Catalyst Fund. The massive network of the startups is shown below by the whooping numbers-
More than 16000 retailers
More than 750,000 farmers
More than 300,000 metric tonnes
Operating in more than 15 states of the country
What has been said about this deal of funding?
The co-founder of FarMart, ALekh Sanghera, made a statement saying that this round of funding reflects the vision of the startup, which is to build an operating system for the agribusiness community of the country, and this process will start with agri-retailers, who are at the core of the business. He further said that the tremendous growth of the startup shows what the startup follows- a product first and an asset-light company. He also thanks to his team for driving the business in such an efficient and fantastic way.
Madhav Tandan, who is the director of Omidyar Network India, commented saying that his company is excited to continue to support the startup on its mission to create an innovative asset-light, a tech-led model which is built to help the startup with its strategy of helping agri-retailers and farmers financially, by assisting them to increase their incomes. He further said that the startup had shown impressive growth in its merchant base and revenue in less than one year.
The Vice President of Matrix India, Sudipto Sannigrahi, said that he and his organization are firm believers in the startup’s business model. He further said that the startup model is so efficient that it can disturb its USD 300 billion agriculture market. He finally said that he is excited to be a part of the journey of the startup.
The startup is innovative and is doing something good. We wish the startup a piece of good luck and a bright and prosperous future.
Article Proofread and Edited by Shreedatri Banerjee