MUMBAI: Samunnati Financial Intermediation and Services Pvt. Ltd, a non-banking financial company (NBFC) specializing in loans to farmers and entities engaged in agriculture, has raised ₹387 crore ($55 million) in a Series D round led by Nuveen, the investment management arm of Teachers Insurance and Annuity Association of America (TIAA), a senior executive said in an interview.
Samunnati’s existing investors Elevar Equity, responsAbility, and Accel Partners also participated in this round. The fresh capital will be used to scale up the current book size and expand to newer geographies and agriculture value chains.
Samunnati was founded in 2014 to provide financial intermediation, market linkages, as well as advisory services, to agriculture value chains. Unlike traditional lenders, who tend to focus on crop loans or agricultural input loans, Samunnati focuses on the needs of small farmers and designs appropriate financial products that are not collateralized.
“Access to financing for agricultural value chains fits with our impact investment thesis of inclusive growth, and we are excited to be partnering with a high-quality management. This investment aligns with Nuveen’s impact investment objective to grow purpose-driven financial services institutions that leverage innovative and scalable solutions," said Rekha Unnithan, impact investing portfolio manager, Nuveen.
Kotak Investment Banking acted as the exclusive financial adviser to Samunnati for this transaction.
With this round of funding, the total equity raised by Samunnati now stands at ₹587 crore. Mint had reported in January that the lender was in talks with various private equity funds to raise a fresh round.
“This investment will help continue with our differentiated offerings and enable agricultural value chains to reach a higher equilibrium, thereby allowing markets to work for smallholder farmers. We see a strong potential for alignment between the impact investment arm of Nuveen and Samunnati’s focus on providing working capital to value chain players along with aggregation, market linkages and advisory services," said Anil Kumar S.G., promoter and chief executive officer, Samunnati.
“We will use the capital to deepen our presence in states such as Madhya Pradesh, Maharashtra, Jharkhand, Chhattisgarh, Bihar, Karnataka, Andhra Pradesh and Telangana. We will also look to increase our presence in certain value chains, especially in fruits and vegetables, and food processing," he added.
Samunnati focuses on five broad segments of agriculture—fresh fruits, vegetables and flowers; dairy, poultry and fishery; post-harvest food processing industry; agri inputs such as seeds, fertilizers, agrochemicals, machinery and farm equipment, small and micro-irrigation; and field crops and horticulture commodities.
The latest fundraise will help the company grow its loan book to ₹1,000-1,200 crore over the next 12-15 months, Kumar said.
Samunnati employs 315 people and is present across 14 states, impacting 2 million farmers indirectly. It has disbursed ₹1,500 crore since inception and had assets under management of over ₹460 crore as on 31 March.
“Successful deal closure in an uncertain and strained market environment highlights the confidence of marquee investors like Nuveen, as well as the commitment of existing investors on the robust and unique business model of Samunnati," said Kaushal Shah, head of financial services, Kotak Investment Banking.