Most agritech start-ups have seen a V-shaped recovery: Omnivore’s Kahn

Omnivore, the largest agritech-focussed venture capital firm in the country, has continued to make fresh and follow-up investments in two dozen Indian startups despite the crisis triggered by the Covid pandemic. “The Covid crisis has only increased our commitment to supporting India’s struggling farmers,” says Mark Kahn, managing partner, Omnivore, in an email interaction with BusinessLine. Excerpts:

Like all businesses, agritech startups initially struggled with the lockdown. That said, after a few weeks, things stabilised and now most agritech start-ups are growing even faster than prior to Covid. It’s truly a V-shaped recovery for most of them, unlike in other sectors. Farmers need more support than ever, and with traditional supply chains disrupted, agritech start-ups have stepped in to fill the gap. It’s a huge opportunity for our ecosystem to prove its value to farmers and build a new future together.

We’ve provided additional capital, where necessary, along with strategic support, especially regarding intelligent cost cutting and identifying new opportunities for growth. We've also helped portfolio companies think through Covid-related ESG (environmental, social and governance) risks and plan accordingly. That said, I’m happy to share that all of our portfolio companies have significant runway ahead of them and are well-positioned to accelerate growth as we come out of the lockdown.

I’m very excited but waiting for the fine print. Abolishing the Essential Commodities Act is long overdue, but I believe the government only plans to modify it and may leave in place “circuit breakers” that allow them to step back in under certain circumstances. That would be a huge mistake in my view. Shifting agri marketing from State to central control and reforming contract farming would also be transformative, but let’s wait for the final proposals before we get too excited.

We are more excited than ever regarding digital solutions that direct interface with farmers and agri dealers of all sorts, especially since in-person commerce will likely be more limited going forward.

Agritech is Omnivore’s obsession, and agricultural transformation is our life's work. That's never going to change, and Covid has only increased our commitment to supporting India’s struggling farmers.

Agriculture, agri-business, and agritech have bounced back quickly from the Covid crisis and remain an attractive source of future investment for VCs, impact investors, and strategic corporates. We are not short term investors, and we are confident that any hit in valuations will recover in the near future.

So far in 2020, we have done two new investments, in Clover (greenhouse-grown fresh produce brand) and Arya (post-harvest services platform), which have been shared publicly. We are also about to close on a new seed-stage investment, which will be announced shortly. This will be the 11th investment from Omnivore Fund 2. We have also done follow-on investments into the Series A rounds of DeHaat (farmer platform + marketplace), Bijak (B2B agricultural commodity platform), and Intello Labs (fresh produce quality digitization), which were all announced over the past two months.

Finally, we have done a follow-on investment into the pre-Series A round of GramCover (rural insurtech platform), which is being announced this week itself.