Bertelsmann sees rural India as its next big investment frontier

“Our thesis is clear, the investments we make either have to help villages make money or help them spend money,” Pankaj Makkar, managing director at BII told Mint.

For the early growth-stage corporate venture fund, there is a distinction between what venture capital like to call Bharat and rural India. While the term is all-encompassing, it doesn’t account for the fundamental issues facing rural India. “The problem statement in villages isn't to outbid competitors through marketing. It's creating distribution and investing in infrastructure," said Makkar.

Rural India as a market remains largely untapped, driven primarily by a lack of infrastructure and low transaction values. There have, however, been some successes in the form of business-to-business (B2B) players such as Ninjacart, a supply chain platform connecting farmers to retailers; Peak XV-backed full stack agri-tech platform DeHaat; and grain storage startup Arya.ag, which raised $80 million in a Series D round led by GEF Capital Partners in January this year.

Currently, BII has three investments in the segment: AgroStar, CureBay and Rozana. Recently, BII doubled down on its investment in Rozana, leading the startup's ₹290 crore (approximately $32 million) Series B round, which saw participation from Fireside Ventures, Spark Growth Ventures, FE Securities, the Bikaji family office and a few other family offices. Rozana had previously raised $22.5 million in its Series A round led by BII in 2024.

Prior to the Rozana investment, the Indian venture arm of Bertelsmann led AgroStar's $27 million Series C round in 2019 and has since participated in the company's subsequent funding rounds, including its December 2025 $30 million Series E round. The corporate venture fund also led health-tech startup Curebay's $21 million Series B in May last year.

Rural India accounts for 60-65% of the country's 1.4 billion people, or roughly 900 million, pointing to significant potential revenue if companies can develop business models that work.

While some companies have made progress in agriculture, other sectors remain open. E-commerce, in particular, is likely to be next, as incomes in rural areas rise.

Data from the latest Rural Economic Conditions and Sentiments Survey showed that 42.2% of respondents said their income had increased, the highest since the survey was started in 2024, while 42.1% saw no change, and 15.7% saw a decline. Similarly, 80% of households surveyed reported an increase in consumption. The RECSS is run by the National Bank for Agriculture and Rural Development, the government-owned rural development bank.

“Meaningful e-commerce penetration in the deeper urban pockets, and adoption of internet services by rural consumers (particularly social media and UPI), is likely to create strong e-commerce propensity in the rural markets,” said Kushal Bhatnagar, associate partner at Redseer Strategy Consultants.

Apart from its current investments, BII is looking at more sectors as part of its rural India thesis, though Makkar said the firm is actively looking for more companies similar to Rozana. “Rural India is now spending on healthcare. Education is another area they're spending money on. We look at the aspirations and needs of rural India and we want to find companies that are solving for those so that we can back them.”

Outside of rural India, given BII's sector-agnostic approach, it believes that technology will be the solution for large, fragmented markets. Currently, the firm is actively eyeing opportunities in fintech, logistics and commerce infrastructure, future-of-work platforms, and emerging AI-first application companies.

"We're also closely tracking consumer-tech and D2C infrastructure, where shifts in distribution — quick commerce being the most visible — are fundamentally reshaping how brands reach customers," Makkar said.

Through 2025, the company invested in Snabbit, Tettr College of Business, Handpickd, Inito, and Wealthy, among others.