Agritech start-up WayCool Foods’ said that it raised $5.5 million through debt financing from IndusInd Bank Ltd, guaranteed by the US International Development Finance Corporation (DFC). This follows the Series C round of $32 million led by Lightbox earlier this year. Setuka Partners LLP was the advisor to the current transaction.
WayCool Foods plans to use the funds to introduce advanced technology, implement strict hygiene measures, and increase transportation efficiency to reduce food spoilage and improve farmer yields, thus contributing to food security. This will also allow the company to strengthen food distribution across South India.
Karthik Jayaraman, Co-Founder and CEO, WayCool Foods said, “WayCool has been steadily building necessary technology and operational capabilities to operate robust agrifood supply chains from soil to sale. We welcome DFC and IndusInd Bank as partners in this journey and believe that this partnership is an endorsement of WayCool’s ability to lead transformation within the sector."
DFC’s financing to WayCool comes through IndusInd Bank in the form of a 100% guarantee. The loan is to be deployed through IndusInd Bank’s Impact Investing division, which will support WayCool Foods’ expansion plans.
The DFC guarantee enabled the bank to provide an equivalent of ₹35 Crores loan to WayCool, IndusInd Bank said in a statement. The structure is significant as it helps in mobilizing local capital for WayCool, also it eliminates foreign exchange rate fluctuation risk from the balance sheet of WayCool, it added.
DFC, America’s development bank, provides financing to address critical challenges across emerging markets globally. The investment in WayCool Foods demonstrates DFC’s commitment to supporting India’s food and agriculture distribution sector. The investment has been finalized after a stringent due diligence process.
WayCool has previously raised three rounds of funding from Lightbox, LGT Lightstone Aspada, FMO, Caspian Impact Investment, and Northern Arc Capital Ltd.
India is home to more than 450 agritech startups, growing at a rate of 25% year-on-year, according to a Nasscom 2019 report. The sector has received more than $248 million in funding as of June 2019, a growth of 300% as compared to the previous year.