DeHaat, a startup that offers a wide-range of agricultural services to farmers in India, has raised $60 million in a new funding round as it looks to deepen its penetration in the country and reach break-even profitability within two years.
Sofina Ventures and Temasek co-led the Patna and Gurgaon-headquartered startup’s Series E funding, it said, at a valuation between $700 million and $800 million, according to a person familiar with the matter. Existing backers RTP Global Partners, Prosus Ventures and Lightrock India also participated in the new round.
Farming is a $350 billion industry in India, but farmers face a myriad of challenges in the country that were largely unaddressed until upstarts such as DeHaat arrived on the scene. Farmers struggle with securing agri-inputs, finding buyers for their produce and in maintaining enough runway.
Giants such as Reliance and Adani Group offer some services to farmers, but their involvement in the agriculture sector remains largely limited. A fast-growing population and climate change mean Indian farmers need to adopt technology quickly to improve – and maintain – their yields.
DeHaat uses artificial intelligence to help 1.5 million farmers across 11 states, 110,000 villages and over 150 zip codes in India source raw materials, find advisory and credit services, and sell crops.
The startup has onboarded over 2,000 agricultural institutions including input manufacturers, food and consumer goods giants, banks, insurance firms. It works with over 10,000 micro-entrepreneurs who help the startup run a maze of last-mile supply chains.
In the past two years, DeHaat has aggressively expanded across several key Indian states, and co-founder and chief executive Shashank Kumar told TechCrunch in an interview that the startup will focus on deepening its presence across the zip codes where it’s already operational and reaching break-even profitability in 12 months.
The new funding provides DeHaat with up to 40 months of runway, during which time Kumar said the startup will be profitable. “At least for the next three to five months, we are not adding any new geographies. We will continue to serve more farmers and broaden our network of centers in the states where we are operational,” he said.
Kumar acknowledged that raising funds in the current market scenario isn’t a walk in the park. “The lens is different – everyone is looking for assets that have a clear path to profitability. In that way, DeHaat had its own advantage – our unit economics are very strong, whatever burn we have is for adding geographies. We raised the round to be ready for all the future opportunities,” said Kumar, adding that the startup still has about two-thirds of the funds left from the previous $115 million funding round.
He said the startup, which has acquired half a dozen firms in the recent quarters, sees more m&a potential on the horizon and is ready to execute when it finds the right partners.
(More to follow)