Agri-research institute ICRISAT’s incubation arm is looking to set up a Rs.100 crore fund in a year, an initiative that could help small entrepreneurs from the agri-business and nutrition space raise money.
This year it hopes to incubate at least 15 start-ups.
As part of the incubation programme, the institute had been tying up funds for start-ups but was finding it increasingly difficult to convince mainstream financiers and venture capitalists. By setting up a fresh fund, it hopes to make funding easy for innovations, which fail to commercialize for want of money.
“Every year we typically tie up funds of around Rs.3-4 crore between 10 start-ups. While bank funding is tough to get, most of the venture capitalists too find agri and nutrition, an unattractive proposition. With the Rs.100 crore fund, unique and worthy start-ups may not die down because of lack of money,” said Kiran Sharma, CEO of Agribusiness Innovation Platform (AIP).
The agri-business incubation platform of ICRISAT was set up in 2004 and it has so far incubated 71 ventures and mobilized $13.2 million for ventures through the government’s entrepreneurship promotion schemes.
“When we first set up the platform, we were very ambitious and had hopes that there would be at least 20-25 start-ups incubating each year. But the ecosystem for the agri-business space is yet in formative stages. While the success rates have been 10% now, with funding avenues in place this should go up to 30-40%,” he said.
At AIP companies are incubated in areas like agriculture, agri-digitization, food and nutrition, renewable energy and farmer producer organizations. There are no restrictions on the incubation period, Sharma said.
There are around a dozen companies being incubated now. One such company is Sukashree Agro Foods Pvt. Ltd which makes idly and dosa batter sold under the Chennai Chef brand. It is finding it hard to get Rs.1.5 to 2 crore in funding.
“In the last one year, we have met seven venture capitalists. While some got back, most of them asked us to take our product online and sell it through e-commerce platforms. As a company we strongly believe that our products are ‘feel’ products and people will want to feel them before buying,” said Shurti Krishnakumar, sales and marketing head at Sukashree Agro Foods.
For the Rs.100 crore fund, AIP is in talks with high net worth individuals and the corporate social responsibility arms of various companies.