Agritech Startup Ergos raises $10 million, led by Abler Nordic to revolutionize Indian agriculture
Ira Singh
26 Sep’23
In a significant development for the Indian agricultural sector,Bengaluru-based agritech startup Ergos on Friday said it has raised $10 million in a Series B stage funding round, led by Oslo, Norway-headquartered financial inclusion fund Abler Nordic,a prominent venture capital firm specializing in sustainable technology investments. The funding round is expected to revolutionize the way agriculture is managed and transformed in India, according to media reports.
The round saw participation from returning investors such as Aavishkaar Capital, Chiratae Ventures and Trifecta Venture Debt Fund.
The capital raised was a combination of $7 million in equity and $3 million of debt, founder and CEO Kishor Jha told ET.
The 2012-founded startup stores and digitises grains for farmers, and also converts these grains into tradable digital assets, which act as collateral for the farmers to borrow money from partner banks. Ergos has three banking partners that are currently active, including Shivalik Bank, with two more joining up in the coming weeks, according to information.
In 2021, the platform disbursed loans worth Rs 100 crore, an estimate that the startup aims to double in 2022, Jha said.
Ergos, founded by a group of visionary entrepreneurs, has been making strides in addressing long-standing challenges in India’s agriculture supply chain. The startup’s innovative solutions aim to empower farmers by providing them with a reliable and technologically advanced platform to store, sell, and access credit for their produce. By digitizing the agricultural supply chain, Ergos aims to enhance farmers’ incomes, reduce post-harvest losses, and ensure food security for India’s growing population.
Ergos’ platform also helps with market linkage, allowing buyers to choose from the farmers’ produce – mainly maize, wheat and paddy.
The company helps small and marginal farmers, with an average land-holding of 2-3 acres, access storage services for 8-9 months after the harvest. The farmers can then access credit from partner lenders for up to 70% of their stored and digitised grain through an end-to-end digital process.
The company makes money from the grain management fee that it collects from farmers, a fee from the lender from the fintech layer and from the buyer with a mark-up in the market linkage side, Jha told ET.
Ergos currently supports over 160,000 farmers on its platform and has a physical network of farm-gate based warehouses branded as Grainbank in over 200 locations across Bihar, Karnataka and Maharashtra.
Over the past decade, the company said it has helped farmers increase their income by 30-35% in a year. “Ergos is helping solve the problem that many farmers in India increasingly face-produce spoiling due to lack of access to quality storage, affecting both the farmers’ income and general food security,” Arthur Sletteberg, managing director of Abler Nordic, said.
“An app-based interface facilitating trades and financing with the ability to serve smallholder farmers and inherent strong network effects within farmer and buyer communities on the Ergos platform, strongly positions the company for a rapid expansion in the over 300 million metric tonnes grain market in India,” Shashvat Rai, partner, Aavishkaar Capital who invested through the Aavishkaar Bharat Fund, said.
Abler Nordic’s decision to lead the funding round underscores the global interest in India’s rapidly evolving agritech landscape. Abler Nordic, known for its investments in sustainable and socially impactful startups, recognizes the potential of Ergos to bring about transformative change in Indian agriculture.
Ergos’ efforts align with India’s broader goal of modernizing its agricultural sector and making it more resilient in the face of changing climate conditions and economic challenges. The startup’s technology-driven approach is expected to play a pivotal role in achieving these objectives.
As the agritech sector in India continues to gain traction, Ergos’ successful funding round stands as a testament to the industry’s potential and the growing interest of investors in supporting innovations that can transform one of India’s most critical sectors.
With this significant funding boost and the support of Abler Nordic, Ergos is poised to usher in a new era of sustainable and prosperous agriculture in India, offering hope and opportunity to millions of farmers across the nation.