Agritech firm AgroStar in talks to raise $40-50 mn to expand private labels

Agrostar was founded by Shardul Sheth and Sitanshu Sheth in 2009. (Mint)
Agrostar was founded by Shardul Sheth and Sitanshu Sheth in 2009. (Mint)


AgroStar last raised $70 million in Series D funding from Evolvence India, Schroders Capital, Hero Enterprise and CDC in 2021.It was last valued at $291 million, according to estimates by Tracxn.

BENGALURU : Agritech startup AgroStar is in early talks to raise $40-50 million from a clutch of new and existing investors to expand its private-label business, according to two people aware of the discussions.

“The talks are advancing quickly, and the round is likely to be finalised over the next month or so," said one of the persons, adding that the round is likely to fetch a higher valuation. 

The Pune-based firm was last valued at $291 million, according to estimates by market intelligence firm Tracxn. 

It last raised $70 million in Series D funding from private equity firm Evolvence India, global asset manager Schroders Capital, Hero Enterprise and the UK’s development finance institution CDC in 2021. Aavishkaar Capital, Accel, Bertelsmann, Chiratae Ventures and Rabo Frontier Ventures also participated in the round.

Also Read: Agritech firms turn to private labels to improve revenue, margins

Founded by Shardul Sheth and Sitanshu Sheth in 2009, AgroStar introduced its first brand in 2020. Now, its private brands, covering seeds to farm equipment, account for more than 80% of its overall revenue, according to Shardul Sheth.

The firm did not respond to Mint queries.

Change of plans

Last week, Mint reported that agritech firms are increasingly banking on their own brands to improve revenue and margins. Owned brands are now contributing a big portion of the revenue for many agritech firms such as DeHaat and Waycool Foods, signalling a major shift in strategies.

The development also comes at a time when the agritech sector is grappling with a slowdown in investments and scaling problems, prompting some firms to reassess their strategies.

Also Read: The long wait for India’s first agritech unicorn

Venture capital funding for Indian agritech and foodtech startups dropped 33% to $2.4 billion in 2022, according to the AgriFoodTech Investment report by agritech investors AgFunder and Omnivore released in 2023. Moreover, the sector continues to rely on government support.

Valued at $24 billion, India’s agritech sector remains significantly untapped, with only 1.5% penetration, said a 2023 report by consulting giant EY.

None of the startups in the sector has achieved the unicorn status—a valuation of $1 billion or more—or has listed publicly. DeHaat, WayCool Foods and Ninjacart are valued in the range of $650 million to $800 million.

Also Read: Why VCs are drawn towards upstream agritech

Mint reported in June that Venture Catalysts-backed agritech startup Reshamandi found itself in a deep financial crisis with frozen bank accounts, delayed debt repayments and mounting legal challenges threatening its survival.

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