Indian agri-food-tech investor Omnivore has announced the first close of its third fund, with $150 million to invest in startups developing breakthrough technologies for agriculture, food, climate, and the rural economy.

Omnivore managing partners Mark Kahn and Jinesh Shah.

A pioneer in Indian agrifoodtech investing, the venture capital firm expects to make 25-30 new investments in seed and series A rounds, with initial checks ranging from $1-5 million.

First close investors—or LPs (limited partners)—include KfW, the Self Reliant India Fund, FMO, SIFEM, and the International Finance Corporation, with support from the Bill & Melinda Gates Foundation’s Inclusive Agritech Facility, Louis Dreyfus Company Ventures, the Dutch Good Growth Fund, the Belgian Investment Company for Developing Countries (BIO), and Yara Growth Ventures.

New fund ‘will have a sharper focus on catalyzing climate action in agriculture’
Founded in 2011 by Mark Kahn and Jinesh Shah, Omnivore has backed more than 40 startups aiming to make farming more profitable, resilient, and sustainable, including DeHaat (ag services and products marketplace), Arya (post-harvest services platform), Stellapps (dairy supply chain digitization), ReshaMandi (B2B marketplace digitizing the natural fiber supply chain), Ecozen (solar-powered irrigation and cold chain storage solutions), Aquaconnect (aquaculture management platform), and Pixxel (satellite imaging).

In the past year, it has also made a couple of exits, selling its stake in aquaculture IoT startup Eruvaka to animal nutrition and aquaculture giant Nutreco in July 2022; and selling its stake in precision sprayer manufacturer MITRA to leading farm machinery firm Mahindra in March 2023.

Mumbai-based Omnivore, which raised $82 million for its second fund, says its third fund will focus on agrifood life sciences, rural fintech, and climate-smart agriculture.

According to managing partner Mark Kahn, “The greatest risk and opportunity for Indian agriculture is the adverse effects of climate change. Our new fund will have a sharper focus on catalyzing climate action in agriculture by funding startups addressing climate mitigation and climate adaptation.

2022 was a grim year for agri-food-tech investing, and India was not immune to the headwinds impacting global markets, with funding to Indian startups in the field dipping 33% year-over-year to $2.4 billion from $3.6 billion in 2021, according to the India AgriFoodTech Investment Report 2023, produced in collaboration with Omnivore.

To place this in context, overall global agrifoodtech funding fell 44% in 2022 to $29.6 billion in 2022, while global venture funding dipped 35% vs 2021.

However, a deeper dive into the figures shows several bright spots as investors turned their attention upstream. While funding to startups in downstream and midstream categories fell 37% and 65% respectively in 2022, investments rose 50% in upstream categories in India, which recently overtook China as the world’s most populous country.

A leading emitter of greenhouse gases, India is also among the countries most vulnerable to the impacts of climate change. Water stress, heat waves and drought, severe storms and flooding have the potential to alter growing seasons and wreak havoc on agriculture and food production. And this in turn is driving efforts to deliver affordable technology solutions to smallholder farmers, said Kahn at Omnivore.

“Across India’s agrifoodtech ecosystem, 2023 will stress test startups, while also being an ideal vintage for VCs who can enter promising deals at cheap valuations. Despite the transient headwinds, agrifoodtech in India will continue to surge ahead.”