Arya.ag, a nine-year-old agri startup that claims to be the largest in the space in terms of reach, farmers onboard, the number of farm produces traded on its platform and also profitability, expects to grow its revenue and net income fourfold this fiscal.
The New Delhi-based startup, cofounded by former ICICI banker Prasanna Rao, along with Chattanathan Devarajan and Anand Chandra in 2013, had closed FY22 with over USD 45 million in gross revenue but the same has already crossed USD 80 million as of July. “Given this run-rate, we see us closing fiscal 2023 with around USD 175 million in top-line, and a four-times growth in net income, which stood at USD 0.5 million last fiscal. Till July we made a net income of USD 2 million, and this should grow at least four fold by March,” Prasanna Rao, the cofounder and managing director, told PTI over phone from Delhi on Tuesday.
Offering reasons for the massive spike in volume/revenue apart from inflation, Rao said their geographical reach has increased massively last year (by over 50 per cent), and so did the number of sellers which nearly doubled to 4,500 farmer-sellers, FPOs and large farmers. Then there are over 650 aggregators as well who they work with. The company has so far received USD 65 million in external equity capital from investors like the Bengaluru-based fund Lightrock, the Washington-DC-based fund Quona, Mumbai-based Omnivore and Asia Impact Fund.
These investors have collectively invested USD 65 million and own a little less than 50 per cent of the company and the rest of the equity is with the founders and some individual investors, Rao said. The company claims that it is the only agri startup that has been making net profit from the first year of operations that began in 2013. Arya has over 11,000 warehouses in over 800 locations across 450 districts spanning 21 states Bihar is the largest among all in terms of geographical reach.
Its warehouses can store over 3,65,25,000 tonne of farm produces, which are used by over 8,000 sellers and over 2,200 trades. Annual volume of grain traded on its platform is over 7,00,000 tonne or worth around USD 2.5 billion, Rao said. The grain commerce platform connects sellers and buyers of agri produce, providing assurance on quantity, quality and payments by eliminating distress sales by farmers. One of its unique services is the advance payments to farmers to the tune of 70 per cent of the value of their produce, which prevents them from resorting to distress sales, Rao said.
The company’s loan book is around Rs 6,500 crore, of which half is on its own book and the rest are in the books of lending banks, which could pass this advance/loan as priority sector lending. Arya charges 12.5 per cent to 13 per cent from a farmer for the advance payment, Rao said, adding even after this an average farmer earn 15 per cent more than a farmer who is not on his platform. Some of them even make 25 per cent more for their produce, he added.
Arya’s clients include farmers, farmer producer organisations (FPOs), financial institutions, SME agri processors, commodity traders and corporate agribusinesses. Arya also offers warehouse receipt financing via Aryadhan, its wholly-owned NBFC arm, apart from providing credit to farmers, FPOs and SME aggregators (processors/traders) who have stored agri commodities in its warehouses.