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Chennai-based Villgro Innovation Marketing Pvt Ltd, an innovative rural distribution company, has raised a significant seed series investment from Unitus Seed Fund and a group of angel investors to further expand its operations in southern India. With the current capital infusion, Villgro plans to expand its distribution operations, increase product portfolio and build internal systems and management capability.

Within the next five years, Villgro aims to improve the income of one million rural households by at least 20-30 per cent by encouraging the usage of sustainable and environment-friendly products, according to a company statement.

Unitus Capital acted as a financial advisor to Unitus Seed Fund on this investment.

Villgro is creating an affordable, low-cost rural distribution channel for products in agriculture, dairy, water and energy segments in order to improve rural livelihood. Since its inception in 2009, it has sold products to more than 6,000 farming households in the Erode district in Tamil Nadu. An estimated Rs 8 crore ($2 million) of additional wealth has been created for these farming households over the last three years.

Rural India annually spends $425 billion, which is growing at 15 per cent annually. The rural market includes 770 million people in 150 million households and 0.6 million villages.

Villgro operates through an independent sales agent network. These village level entrepreneurs (VLEs) are recruited from local communities and trained for the job. VLEs work on sales commissions. Over the next five years, the company plans to reach more than a million rural households in 15,000 villages through 3,000 VLEs.

“Our strength lies in understanding the needs of underserved, small farmers and providing them with affordable, high-quality products, which would improve their farm income very quickly,” said Villgro CEO Ashutosh Sinha.

“We have seen the promising operating results that the company has achieved over the past year and believe that it has significant potential to bring improved livelihoods to many struggling farming families,” said Dave Richards, managing director of Unitus Seed Fund.

Unitus Seed Fund has announced its debut deals in February this year and the companies include Bodhicrew Services (skill development and job placement services), Hippocampus Learning Centres (affordable rural education services) and Milaap Social Ventures (microcredit financial services).

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