Ankur Capital has provided the first round of funding to India’s Carmel Organics, a supplier of certified organic herbs and spices.
Founded in 2012 by Shailendra Dhakad and Rajesh Sagitla in Madhya Pradesh, Carmel Organics was recognized as 2018 Forbes 30 Under 30 for its work in developing an integrated supply chain for the traceable production and global delivery of organic and functional herbs and spices.
To accomplish this, the company works with more than 1,500 farmers, providing education, expertise, and training in agricultural production practices that result in products that meet the benchmarks set for organic certification across global markets. For farmers, the tie-in with Carmel provides them a channel through which they can gain access to greater markets, and realize higher returns.
Working within this business model, Carmel, which had been bootstrapped, was posting growth of between 30 and 40 percent per year.
“We were attracted by Carmel Organics’ positioning as a quality supplier of medicinal herbs and its traction in markets like Europe and Australia. In the founders, we saw a great combination of strong on-ground connect with farmers as well as a drive to build a global scale company” says Krishnan Neelakantan, senior investment director at Ankur Capital.
Ankur Capital is an early-stage venture capital firm focused on investing up to $1 million per investment in startups in the agriculture, fintech, healthcare, and education sectors that are in the process of developing both their technologies and their business.
Previous investments include commitments made to soil nutrition and conditioning company Suma Agro and Bangalore, India-based farm management software company CropIn Technology Solutions, which recently raised $2 million in Series A funding in an investment round led by Denmark-based Sophia Investment ApS. The fund’s most recent investment was made just last month in Agricx Lab, an India-based startup that employs smartphone imaging capabilities to assess the quality of produce.
Carmel plans to use the funds raised through this investment to support its efforts to scale up the business with a particular eye on expanding its reach across global markets.
Horticulture and Herbs
Horticulture production in India is booming; exceeding the country’s grain production to reach a new record of more than 300 million tons for the 2016-17 financial year, according to India’s Ministry of Agriculture, reports Agfunder.
Hexa Research concludes that the global herbal remedies market was valued at US$71.19 billion, and was dominated by the EU in 2016. Projecting forward, the market is expected – by Global Industry Analysts Inc. – to reach a value of US$140 billion by 2024 as it’s driven by consumer demand for organic herbs.
As consumer backlash continues against synthetic ingredients, herbs spices have been gaining investor capital.
Here in the U.S., investors in Shenandoah Growers, one of the leading suppliers of certified organic herbs in the country, include the $154.5 million U.S. Department of Agriculture-licensed, Rural Business Investment Company (RBIC) – Advantage Capital Agribusiness Partners (ACAP), Middleland Capital, and S2G Ventures.
Indeed, herbs are even gaining attention in the animal feed category as consumers become increasingly concerned with how livestock are fed and raised.
In July of last year Cargill announced that it had entered into a strategic partnership with Delacon – the pioneering global leader in phytogenic (plant-based) feed additives – through an unspecified minority equity investment.
Delcaon explains on its website, “Phytogenic feed additives, commonly defined as plant-based feed additives or botanicals, represent a group of natural substances used in animal nutrition. These substances are derived from herbs, spices, other plants and their extracts…”
Although the financial details of the deal were not disclosed, Chuck Warta, president of Cargill Premix and Nutrition, told the Star Tribune that the investment was the largest investment to date by Cargill in the area of natural animal feed.
“Phytogenics are one of the most promising groups of feed additives, and are turning from a niche market into a mainstream need,” said said Markus Dedl, chief executive officer of Delacon, in a joint statement announcing the partnership with Cargill. “We are entering a new era of phytogenic feed additives, and the next five years are decisive for the developments in this growing market.”
-Lynda Kiernan