Deals

Ahead of second close, German-backed climate fund bets on Indian ag

A vehicle being raised by Switzerland’s Blue Orchard has taken a 27% stake in a weather analytics start-up to help farmers combat India’s ‘leading national security challenge.’

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The InsuResilience Investment Fund has helped Uttar Pradesh-based Skymet round off its Series C funding cycle as it advances towards its own fundraising target.

The vehicle, which is managed by Switzerland-based Blue Orchard, picked up a 26.8 percent stake in the business as part of the transaction. Blue Orchard decline to disclose the deal’s value.

Set up in 2013 by German development bank KfW with an initial funding of $60 million, the InsuResilience Investment Fund is split between a private equity pool and a private debt vehicle that had raised $30 million and $50 million respectively, as of September.

BlueOrchard hopes to garner $100 million for the private equity pool, with the private debt vehicle aiming for $200 million. A second close is expected at the beginning of Q1 2018, with a final close scheduled within the first half of the year, a spokeswoman told Agri Investor.

KfW, on behalf of the German Ministry for Economic Cooperation and Development, provides first-loss protection for private investors.

Climate-proofing agri

Skymet, which runs a network of 3,500 automated weather stations across India, bills itself as the first private sector entity to provide weather forecasts and weather graphics to the country’s media. Launched in 2003, it sealed a $700,000 Series A in 2011 and a $4.5 million Series B in 2014.

“Between 1900 and 2000, there was a drought per decade in India; but between 2000 and 2017, there have been five droughts and two below-normal monsoons. As climate change accentuates rain variability over the subcontinent, India’s water tables are collapsing and farmer distress is increasing,” said Jatin Singh, Skymet’s founder and managing director.

With the fresh funding, the company will seek to expand its network and “derisk” Indian farmers through advances in gathering weather data, crop measurement, climate analytics and disaster management.

The news comes three months after the IIF invested in Pakistan-based Asia Insurance Company, which provides agriculture insurance to more than 100,000 farmers in its homeland. The fund took a 25 percent stake in the business through the deal.