Holch Povlsen family-backed Bestseller Foundation and US venture capital firm Unitus Impact have led a Series B fundraise for Indian fresh produce supplier Lawrencedale Agro Processing.
Soros-backed Aspada, which invested in the company in 2013, also participated in the funding round by investing $2 million. No further financial details have been disclosed.
Also operating as the brand LEAF, the fresh food business specialises in delivering fresh fruit and vegetables from farms in southern India to retailers. It works with farmers to ensure correct harvesting times, and it cold stores, cleans and packages produce, in an end-to-end model that Aspada chief financial officer Kushal Agrawal says significantly reduces waste and inefficiencies “caused by numerous intermediaries”.
Forty percent of fruits and vegetables in India are wasted, according to a 2013 Ernst & Young and the CII Institute of Logistics report.
As well as sourcing supply from 3,000 farmers across south India, LEAF directly contracts a few hundred smallholder farmers in the Udhagamandalam municipality of Nilgiris district to collectively farm selected vegetables like carrots, potatoes, lettuce, cabbage, cauliflower and strawberries. The company hopes to source products from 10,000 farmers within a few years.
“LEAF… is making a significant positive impact in the lives of fresh produce farmers in India,” said Bestseller Foundation managing director Kristian Sloth Petersen. “More than 80 percent of farmers in India hold less than two hectares of land, and given the fact that LEAF works extensively with them for livelihood improvement, the investment fits perfectly with our philosophy of working to improve sustainable agriculture value chains.”
Based in Denmark, the Bestseller Foundation is the philanthropic body associated with family-owned fashion brand owner Bestseller, whose holdings include Vero Moda. It invests in agricultural and food value chains, green jobs, and environmental conservation in India, Africa and China.
Unitus Impact, which has offices in Bangalore, Hanoi, Jakarta, and San Francisco, focuses on ‘scalable’ businesses with impact for people working in poverty, and sees the opportunity for LEAF to expand. Its chief executive officer Geoffrey Woolley said addressing market and supply-chain inefficiencies is a key part of the impact firm’s strategy.
India has permitted foreign direct investment for up to a 51 percent in food retail since 2012, and foreigners can make 100 percent investments in storage and warehousing, according to corporate lawyer at Penningtons Manches, Simon Bickerdike.
The government could also soon pass a new goods and services tax bill that would make centralised distribution of agricultural produce cheaper, incentivising further investment in warehousing and the food supply chain, according to Agrawal.
“LEAF is working extensively to engage with small farmers to improve their efficiency and price realisation,” said Wooley.
Unitus Impact investments in India also include online marketplace Shotang and Kinara Capital, a debt capital provider targeting micro and small businesses through a supply-chain financing model that does not require any land or property collateral. The Bestseller foundation operates a micro bank for women farmers and small business owners, and has invested in a nutrition programme in India. Aspada has investments in several cold-chain businesses, and is exploring the possibility of bringing them together into one large company, or group of integrated companies.