Guwahati-based processed food company Arohan Foods Pvt Ltd, which has just struck a deal to raise an undisclosed amount in Series A from Omnivore Partners, plans to use the money to set up its own production facility.
One-and-a-half-year-old Arohan Foods is a pork integrator that works with small pig farmers across north-east India and retails pork products in the region that has a huge demand for the same. The company was founded by Anabil Goswami (previously worked with Tata Chemicals), Ranapratap Brahma (who used to work at Bank of Baroda) and Arindom Hazarika (who was with Kotak Mahindra Bank).
Mint first reported the deal.
Although the deal size was not disclosed, Mark Kahn, venture partner with Omnivore Partners (formerly Omnivore Capital), told VCCircle it has picked a significant minority stake in the company. “This investment is similar to the deals we have done in the past in terms of the amount involved. We will continue to invest in the agtech (agriculture+technology) domain and our criteria is productivity, sustainability and supply chain.”
Omnivore made two fresh investments in October last year. It had put in Rs 5 crore ($0.95 million) in Bangalore-based agtech startup Frontal Rain Technologies and invested an undisclosed sum in Rajkot-based agri equipment maker Khedut Agro. Earlier in August 2011, it bought 33 per cent stake in Skymet, a private weather forecasting company.
Omnivore is now looking to scale up its investments. “We ideally plan to invest in 4-5 companies in a year. We are very sector-focused and believe that agtech accounts for 15 per cent of the Indian economy. However, we are not particular about the stage at which we invest in a company.”
A year ago, Arohan received an angel funding of around Rs 20 lakh from an undisclosed investor. Negotiations for the Omnivore investment continued for the last 3-4 months before it was finally sealed, making it one of the few investments by a VC firm in a company located in the north-east region. A few other deals in the region took place in the microfinance and the healthcare segments as per VCCEdge, the data research platform of VCCircle.
Arohan’s flagship brand, Choice Pork Natural, is currently retailed across the north-east India and will be sold pan-India later this year.
Talking about the company’s plans, founder Anabil Goswami said, “We aim to be profitable in the next one and a half years and then we will be entering international markets like Nepal and Burma.”
At present, Arohan works with 100 retailers in the north-east and its revenues are in sub-Rs 1 crore region.
Asked how it would deploy the funds raised, Goswami said, “We will be setting up our own production facility in Sonapur within the next 2-3 months. We will also set up a farm and invest in research & development to identify optimal breeds and analyse deficiencies in pigs.”
The company currently employs 22 people and plans to have 45 employees in the next six months. It will also look at cities like Jamshedpur, Kolkata and Bhubaneswar for expansion by end of this year.
(Edited by Sanghamitra Mandal)