Nabard-backed Nabventures has made its first exit by selling its three-month bet on Fraazo, a direct-to-consumer (D2C) brand in the fresh fruits and vegetable space run by VnF Ideas Pvt Ltd, and clocking 2.5x return.
The minority stake held by Nabventures was sold to incoming investor WestBridge Capital, which led a $50 million round of funding in Fraazo as announced on Wednesday.
The funding round in Fraazo was a mix of equity and debt. Existing investors Sixth Sense Ventures, Equanimity Investments, and Apar Group had also participated in the fundraising, along with family offices of the likes of Manish Choksi of Asian Paints.
“Fraazo is the first proper exit in the agri-tech space for any agri-tech VC fund in a long time. The hard work of our team has paid off in a big way as almost all our portfolio companies have raised or are in the process of raising the next round at 3-5x our entry valuations,” said Rajesh Ranjan, CEO of Nabventures.
He told VCCircle, “We can exit and invest in more such promising startups. We exited right now as often the next round of doubling takes time, so the value that got generated was the right time to exit.”
The investment in Fraazo was made through Nabventures Fund 1, the flagship fund of Nabventures Ltd which is a wholly-owned subsidiary of the National Bank for Agriculture and Rural Development (Nabard).
Nabventures and other bets
Nabventures floated a Rs 700 crore (around $100 million) venture capital fund in May 2019.
That marked the first time Nabard had launched a fund of its own. Until then, it had been investing in other VC funds as a limited partner (LP).
The venture growth equity fund invests in agriculture, food, rural businesses and agri/rural financial services at early to mid-stage.
Since it started deployment in August 2020, Nabventures has invested Rs 94 crore in six start-ups, with three start-ups (Jai Kisan, Unnati and Fraazo) having received follow-on investments at a 3-5x upside to the fund's entry valuation. TenderCuts, the fourth start-up, is in the process of raising its next round, the company said in a statement.
“Nabventures is sitting on estimated IRRs (internal rate of returns) of approximately 406%,” Ranjan said.
Apart from Nabard, the fund has SIDBI Fund of Funds, LIC, Union Bank of India as its contributors. The fund is also in advanced stage of discussions with other banks, insurance companies and family offices to achieve its target corpus of Rs 700 crore.
Besides TenderCuts, Nabventures other bets in the agri-tech space include Unnai and Jai Kisan, among others.
In February, Nabventures reinvested in TenderCuts, an omni-channel meat and seafood supplier, in the funding round that raised Rs 110 crore ($15 million). TenderCuts is operated by GFM Retail Pvt Ltd.
Last year in June, it took part in a Rs 30 crore (around $3.9 million) pre-Series A funding round in Jai Kisan, a lending platform for the farming community. The exercise was led by Arkam Ventures, with participation from Blume Ventures, Prophetic Ventures and Better Capital.
A year ago, it invested $1.7 million (Rs 12.4 crore) in pre-Series A funding in Noida-based agri-input and produce platform Unnati, operated by Akshaamala Solutions Pvt Ltd.