SEAF India Agribusiness Fund, an India-focused fund which invests in agriculture-related businesses, has invested in Tropilite Foods Pvt Ltd (TFPL), a Gwalior-based food ingredients company.
TFPL invents, adapts and formulates a variety of value-added food ingredients for fast-growing dairy and bakery industry sectors. It is one of the few Indian food ingredients companies, which has a national distribution network, with in-house research and development capabilities. The company operates two popular brands in the business-to-business segment – Davars and Tropolite. In addition to its domestic presence, the company has globally expanded its reach and exports products to Africa and the Middle East.
The food ingredients company was founded in 1982 as an R&D outfit for the development and standardisation of food, pharmaceutical and industrial grade additives which were essentially import substitutes of Carrageenans, Pectin, Alginates and Locust bean gum. Product samples were sent to several C.S.I.R laboratories, as well as to other labs, in order to procure their test reports and subsequent quality confirmation. After receiving positive reports, a small-scale unit was started by investing individual capital alone, instead of raising any loan from any of the lending institutions.
The company today claims to be a well-known brand in the dairy & bakery ingredient business, with the widest distribution network in India and its own sales offices in Delhi, Mumbai and the UAE. It also leverages its distribution network and market coverage by engaging in imports, trading and distribution of various frozen, chilled and dry food products. It has a full-fledged cold chain and logistics facility in place for effective transportation and distribution of frozen, chilled and dry food products across the country, according to the company’s website.
Bert van der Vaart, co-founder and chairman of SEAF said, “TFPL has excellent technology developed by its founder and managing director, Dr G.S. Davar, an internationally known food scientist. This technology is currently being nurtured by Dr P. S. Bisen, former vice-chancellor at Jiwaji University and a biotechnologist of global recognition. Thanks to TFPL’s rich experience, well-established national distribution network and international quality products, the company is on a fast-track trajectory.”
This funding also marks the first investment from SEAF’s India-focused fund, a $75 million fund exclusively meant for food and agriculture-related businesses in India. The food and agri fund, which is currently on road to raise the total corpus, is now warehousing the commitments received in its first close. “We raised close to $30 million in our first close a few months back and should be able to raise the target amount in the next couple of months,” Hemendra Mathur, managing director, SEAF India, told VCCircle.
SEAF’s agriculture fund is looking to fully invest its corpus in 2-3 years’ timeframe. The fund will be investing $2-6 million in each firm whose revenues can vary between Rs 30-300 crore.
The fund is also seeking to invest in various segments of agri business in India including agricultural input like seeds and agrochemicals, supply-chain firms, commodity exchanges, food processing and food and retail services.
Headquartered in Washington, D.C., SEAF is a global fund management group specialising in providing growth capital and business support to growth-oriented small and medium-sized enterprises (SMEs) in emerging markets. SEAF manages private equity funds in these markets through a network of 21 offices around the world.
Food & agri business has been a favourite for PE funds. Rabo Equity Advisors, the PE arm of the Dutch bank Rabo, has raised a $120 million India Agri Business Fund and has closed six deals since its launch in 2008. Aavishkaar Venture Management has earlier invested in food and agri-related companies such as Zameen Organic, a marketing company for fair trade, organic and pesticide-free cotton and Shree Kamdhenu Electronics Pvt Ltd, a company developing technology for the dairy industry.