A firm that describes itself as the pioneer of Indian agtech has reached a $46 million first close on its second fund.
Based in Mumbai, Omnivore Partners also focuses on innovative food companies and enabling technology for Indian’s rural economy. Mark Kahn, a co-founder of the firm, told Agri Investor its second vehicle has a $75 million target, which he anticipates to reach in about a year.
In a novel development for the firm, the fund has enlisted investors from overseas, including SIDBI, RBL Bank, Sorenson Impact Foundation, Dutch Good Growth Fund, Ceniarth, KfW and The Rockefeller Foundation. This contrasts with Omnivore’s debut effort, which was 100 percent backed by domestic LPs.
The firm targets net US dollar returns of at least 20 percent, Kahn said. “A lot of Indian agtech VS follow the herd of whatever is working in California. Our strategy differs in that we focus on capital efficiency and technology differentiation.”
Asked to elaborate on what Omnivore saw as particularly promising areas to invest, he pointed to fintech application for farmers, the internet of things and food companies that are sourcing products directly from “hundreds, thousands, even tens of thousands of farmers.”
“First, margins are better,” he said. “Second, supply chains are more sustainable and less easy to be captured by other new entrants: it’s hard to build smallholder supply chains here in India. And then there is the very powerful impact on social transformation.”
He added that Omnivore was keen to co-invest alongside development finance institutions, some of which are investors in the fund. “They’ve helped us a lot improve our systems, on data collection, ESG, setting up impact metrics.”
The second fund has an eight-year duration, plus two-year extension, that starts after final close. Kahn expects it to back about 20 start-ups.