Rabobank, Caspian launch debt fund for agri-tech startups

Netherland-based lender Rabobank and impact investor Caspian announced the launch of Rabo-Caspian Agtech Financing Fund to offer customised debt solutions to companies operating in the agri-tech space in India.

The fund, with a pilot corpus of Rs 15 crore (approximately $2 million at the current exchange rate), will focus on data-driven agri-tech companies delivering products and services that help smallholders improve productivity and income, an official statement from Caspian said.

 “The fund aims to provide collateral-free, cash-flow matched structured debt to agri startups who are harnessing technology to provide efficient solutions to farmers,” the statement said.

The fund will also offer growth finance to startups using data and technology capabilities to address critical problems of the food and agriculture sector.

“The fund size is likely to be increased based on its performance and demand from enterprises,” the statement added.

“We are delighted to partner with Caspian to introduce the first such solution for the agri-tech companies in India. Caspian brings in strong origination and underwriting skills along with a deep understanding of local agriculture/technology markets. Rabobank complements this with balance sheet support, global networks and knowledge of agriculture/innovations in line with the bank’s mission of Growing a better world together,” said Arindom Datta, executive director, rural & development banking/advisory, Rabobank.

Established in the 1890s in The Netherlands, Rabobank is a co-operative bank and has a global presence in food and agribusiness. It is present in 39 countries covering 8.4 million clients worldwide.

Rabo Frontier Ventures, the investment arm of Rabobank, closed its maiden deal in India when it invested $5 million in direct-to-farmer mobile-based retail platform AgroStar in May 2019.

Caspian is an Indian impact investor and is a prominent lender to agri-tech startups in the country. The firm has launched four funds so far - Bellwether Microfinance Fund, India Financial Inclusion Fund, Caspian Impact Investments and Caspian SME Impact Fund. It has backed more than 25 food and agri startups. The investor has provided debt of more than Rs 1,200 crore to over 120 startups and growth-stage companies across high impact sectors like food and agribusiness, clean energy, healthcare, education and financial inclusion.

“It’s a great time to be an agri-entrepreneur as data and technology revolution grips the agriculture sector in India. We look forward to jointly ensuring that no viable agri-tech enterprise addressing critical challenges faced by smallholders is starved of funds to scale and sustain,” Avishek Gupta, investment director, Caspian Impact Investments, said.