India's Bangalore-based Aspada Investment Company has made a US$2.7m investment in Chennai-based fresh produce firm Waycool Foods and Products Private Limited (Waycool), Aspada announced on Friday (31 March).
Waycool is a distribution company that sources fruits and vegetables from small-hold farmers and aggregators and sells through multiple distribution channels spanning small local shops, modern retail outlets, and HORECA (hotels, restaurants and catering establishments, Aspada said in a press release. Waycool currently operates predominantly in Tamil Nadu via a distribution hub in Chennai.
With Aspada’s investment, Waycool will extend its reach to other major cities, including Bangalore and Hyderabad, build a technology platform to reduce inefficiencies in the supply chain, and augment the company’s existing infrastructure, Aspada said.
Commenting on the investment, Karthik Jayaraman, Waycool co-founder and CEO, said: “India is the second-largest producer of fruits and vegetables in the world, and presents a significant opportunity for private players to profitably organise perishable produce value chains. Our partnership with Aspada will allow us to leverage not only their cumulative expertise in India’s horticulture value chains, but also their sizable portfolio of fresh produce companies.”
Kushal Agrawal, chief financial officer, Aspada, added: “Structural challenges in India’s fresh produce supply chain, comprised of multiple intermediaries, leads to significant wastage (>30 per cent by volume), lower prices for farmers, and poor quality produce at a high relative price. As a sophisticated post-harvest supply chain firm Waycool will address these challenges through disintermediation and careful produce handling, thereby catering to a rapidly growing urban middle class which increasingly demands safe, high-quality, and traceable fresh fruits and vegetables."
Aspada says it has curated an extensive portfolio of fresh produce value chain companies focused on specific fruits and vegetables, such as LEAF (carrots & other exotic vegetables), InI Farms (pomegranates, bananas, and pineapples), AllFresh (apples and citrus fruits), and SV Agri (potatoes).
"We believe that a distribution focused player such as Waycool which leverages technology to drive down overall cost-to-serve in the agricultural value chain makes for a logical addition to our portfolio,” said Agrawal.
Waycool is an omni-channel fresh produce distribution company that sources fruits and vegetables from farmers and aggregators. The company employs a hybrid model of working with produce specific value chain companies as well as directly sourcing from small-hold farmers. By optimising sourcing, target markets, and transportation across distribution channels, Waycool says it offers a complete basket of fresh produce to its end customers, with minimal time between farm and fork.
Aspada Investment Company is an active venture capital investor in India, with portfolio companies spanning agricultural supply chains, logistics, financial services, education, healthcare, and technology. Aspada is backed with a significant commitment from the Soros Economic Development Fund (SEDF). Aspada also manages the portfolio of SONG, an early stage venture capital fund backed by the Soros Economic Development Fund (SEDF), Omidyar Network, and Google.