Firm aims to expand all business lines, extend forecasting globally, says CEO Jatin Singh
SkymetWeather Services Pvt. Ltd, an Indian weather forecaster, plans to raise at least $20 million (about ₹ 127 crore) that will fund plans to go global, founder and chief executive officer Jatin Singh said on Tuesday.
“The plan is to have a stronger pan-India presence and expand all our business lines. We want to make our website a global weather data website, with properties like long- and medium-term forecasts, and serve the under-served geographies like East Asia and Africa," said Singh.
Skymet, which competes with government agency India Meteorological Department (IMD), will also use the funds to set up a global research and development (R&D) centre in the US and increase headcount, which currently stands at 200.
The firm also plans to work with the state governments to increase their capacity in flood and other disaster management and provide them with high-quality, farm-related data.
Skymet is known for its forecasting of the monsoon, but its weather data also finds several novel applications across the agriculture value chain—from farmers to agri-input companies as well as financial services firms that provide crop insurance.
“Consumption of agri-inputs depends heavily on the distribution and time of rainfall. Accurate weather data can help one with supply chain management," said Singh.
For instance, Skymet is working with a packaged consumer goods company, helping it track mosquito breeding by using temperature and rainfall patterns and relating them with breeding cycles.
This, in turn, will help forecast demand for mosquito repellents.
“This year, we forecast that there will be strong pre-monsoon showers, which meant that the demand for soft drinks will be weak," said Singh.
According to Jinesh Shah, founding partner at agri-tech venture capital firm, Omnivore Partners, which picked up a 33% stake in Skymet in 2011, seed companies are using Skymet’s rainfall forecast data to determine whether to produce more drought-resistant variety of seeds or normal ones and to match these seeds to particular regions.
Skymet reported revenue of ₹ 9.48 crore in 2013-14, a jump of almost 100% over the previous year, according to data available with the Registrar of Companies. It reported a loss of ₹ 0.89 crore in 2014.
Singh started Skymet in 2003 as a weather data service provider to television news channels and newspapers, which remained the company’s only business till 2006.
“Around 2006, we realized that there is a strong correlation between weather and power and so we started providing data to power companies which then traded power based on that data," said Singh.
But the economic downturn post 2010-11 squeezed the business coming from power companies, forcing Singh to seek other business avenues. “We saw that banks and financial institutions were another big user of weather data, so we started working on a weather-based crop insurance claim settlement service."
Crop insurance is now the biggest business for the firm, which has installed over 3,000 weather stations across the country that report live weather data, used for both claim settlement and other services.
“Availability of timely and accurate information can save the farmers from huge costs incurred because of crop failure due to lack of rainfall," said Dhanraj Bhagat, partner, Grant Thornton India Llp, adding that accuracy of the data is the most crucial aspect of the service.
Investor interest in agriculture and allied businesses is on the rise in India.
According to VCCEdge, an online investment tracker, four firms in the food and agriculture sector have raised $71 million since January. This compares with $68 million raised by 10 firms in all of 2014.
Over the last five years, more than $1 billion in funds have been allocated towards food and agri businesses in the country.