April 29, 2019

India-based impact agrifood tech investment fund Omnivore Partners has secured an investment from BASF Venture Capital in its second fund – Omnivore Partners India Fund 2 – that was part of the fund’s second and final close at $97 million.

Co-founded by Mark Kahn and Jinesh Shah, and with offices in Mumbai, New Delhi, Bengaluru, and Chennai, Omnivore Partners focuses on venture capital investments spanning Seed and Series A rounds for companies in the agtech sector including digital platforms, precision ag, IoT, UAVs, remote sensing, and Big Data solutions. The firm also looks for investment opportunities in companies creating branded food products and novel ingredients, along with start-ups looking to improve rural livelihoods with supply chain, water management, and fintech solutions for smallholder farmers.

“We are thrilled that BASF Venture Capital has invested in our second fund and we look forward to partnering with them to accelerate India’s agrifood tech startup ecosystem,” said managing partner Mark Kahn.

Omnivore’s first fund was launched in 2012, and holding a $38.8 million close the following year, at which time the firm’s thoughts turned toward the launch of Fund 2.

From a strategy perspective, Kahn explained to GAI News in April 2016, “There are some small changes (in Fund II) but it’s really the lessons learned from Fund 1 being applied as opposed to an overall macro change in strategy.”

Two significant lessons learned that will be applied to Fund II include time horizon and location. Kahn explained, “We understand now that the amount of runway that deals need in India to reach the stage where they can be syndicated with deeper larger generalists funds is a lot longer than we originally thought. We’re incorporating that into the next fund.”

He added, “We’ve seen companies that are in start-up hubs like Bengalore, Delhi or Pune find it easier to do all these things.” As a result, Fund II will focus more on these start-up hubs for investments.”

The Omnivore Partners India Fund II announced its first close at $46 million in February 2018, out of a targeted $75 million. Upon its first close, Kahn said, “In our first fund, it was 100 percent domestic investors. For the first close of our second fund, we deliberately chose to focus on raising funds from foreign investors. The value add they bring includes defining and measuring impact, focus on environmental and government policies,” going on to add that the firm expected a 50-50 split between domestic investors and existing investors for the second half of the fund.

Aside from BASF, additional investors include, KfW, DGGF, CDC, SIDBI, AXA Investment Managers, FMO, SIFEM, BIO, The Rockefeller Foundation, Ceniarth, Mistletoe, Sonanz, RBL Bank, the Sorenson Impact Foundation, and various family offices.

“We are pleased to contribute to the Omnivore fund, our first venture investment in India,” said Markus Solibieda, managing director, BASF Venture Capital. “New sustainable technologies are a high priority at BASF. With our investment in Omnivore, combined with BASF’s technical and market expertise, we intend to support the growth of Omnivore’s portfolio companies in the agrifood tech sector.”

Omnivore Fund I has a current active portfolio of 12 companies including Skymet, Stellapps, Eruvaka, MITRA, Y-Cook, Ecozen, FR8, and GramCover. For Fund II, the firm is planning approximately 20 Seed, Pre-Series A, and Series A investments over a four-year period.

“In 2019, some of the areas where we see the most promise in are fintech for farmers, IoT SaaS platforms for precision agriculture, and innovative food startups focused on the mass premium segment of Indian consumers,” Kahn told Your Story.

Fund 2 has already made five investments in recent months:

Doodhwala – a hyper-local online milk delivery service.

AgNext – an agricultural sensing and solutions startup.

TartanSense – an agtech and robotics platform.

DeHaat – an online agribusiness platform, and –

IntelloLabs – a tech-based platform offering India’s farmers end-to-end services.

Fund 2 is also reserving capital dedicated to making follow-on investments through future rounds.

-Lynda Kiernan 

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.