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The Rise Fund, managed by TPG Growth, has agreed to invest $50 million in Dodla Dairy Ltd, one of the fresh dairy product companies in South India.
The funding subject to regulatory approval will mark the first investment of the US-based fund in the food and agriculture sector in India.
The Hyderabad-headquartered Dodla Dairy founded in 1995 by D Sesha Reddy and Sunil Reddy has 3,000 distributors across 9 states and its products are sold by more than 50,000 retail outlets.
It procures, processes, and sells dairy products, including fresh milk, butter, ghee, panneer, curd, flavoured milk, doodh peda, ice cream, and skimmed milk powder.
This is the second major global investment in Hyderabad-based dairy companies. In January 2014, Lactalis, the French major, had bought Carlyle Group-backed Tirumala Milk Products Pvt Ltd for $270 million.
TPG Growth has approximately $72 billion of assets under management. Its current and past investments include Airbnb, Domo, e.l.f. Cosmetics, Lenskart, Noodle Analytics, SurveyMonkey, and Uber, according to a press release.
Due to the high perishability of dairy products, nearly all of Dodla’s milk is procured locally from smallholder farmers. Dodla’s partnership with farmers and local distribution networks drive the company’s business strategy. Dodla sources milk from 250,000 farmers across 7,000 villages every day of the year.
“India has more dairy farmers than any other country, and is the world’s largest and fastest-growing producer of milk. Yet many of the small farmers, who produce that milk, do not have access to the basic tools and networks necessary to sustainably and reliably generate profits. As a result, most of India’s smallholders are only earning a few dollars a day, surviving on the brink of poverty,” said Bill McGlashan, TPG Growth Founder and managing Partner as well as co-founder of the Rise Fund.
Sunil Reddy of Dodla said “We are thriving to put forward a high-quality product that also helps our suppliers thrive. We are excited to partner with The Rise Fund to extend our reach and accelerate our growth.”
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