Chennai headquartered WayCool Foods and Products, which runs a business-to-business (B2B) omnichannel fresh produce distributor platform WayCool, has raised $5.5 million in debt financing from IndusInd Bank.
Government-backed US International Development Finance Corporation (DFC) provided guarantee to the transaction, as per a statement.
The agritech startup plans to use the fresh funds to improve its platform’s technology, hygiene measures and logistics, it said. The company will also strengthen its food distribution chain across southern India with the funds, it added.
“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,” Karthik Jayaraman, co-founder and CEO of WayCool, said.
The fundraise comes three months after the company raised $32 million in a Series C round led by venture capital firm Lightbox Ventures in a mix of debt and equity. InnoVen Capital invested via venture debt, while Dutch Bank FMO and returning investor LGT Lightstone Aspada participated as equity investors.
Founded in 2015 by Jayaraman and Sanjay Dasari, WayCool sources produce directly from farmers and sells them to kiranas, restaurants, hotels and retail outlets. It claims to use technology such as data analytics to improve supply chain. As of May, Waycool claimed to have a volume turnover of 250 tonnes of food a day to 8,000 clients, mostly in Tamil Nadu, Karnataka and Andhra Pradesh.
IndusInd Bank recently launched an application programme interface (API)-based mobile app, which enables self-employed individuals and businesses to digitally open current accounts in just a few hours, as per a separate statement. As of March 31, the lender claims to have 1,911 branches and 2,760 automated teller machines (ATMs) across 751 locations in India.
Guarantor DFC, headquartered in Washington DC, provides financing to companies in emerging markets globally. The latest fundraise has materialised after a stringent due diligence process and the structure of the transaction will shield WayCool’s balance sheet from foreign exchange rate fluctuation risk, the statement said.
“We are proud to work together with the team at WayCool to solve some of the most pressing challenges in India’s agricultural sector. We look forward to this collaboration during these critical times and are thrilled to support WayCool’s efforts to enhance food security in India,” Ajay Rao, director of the social enterprise finance team at DFC, said.
In May, DFC had backed Hyderabad-based impact investor Caspian by infusing $20 million in the company as a long-term debt fund.