Indian dry fruits, seeds and nuts marketplace Farmley has just raised $6 million in a Series A round led by DSG Consumer Partners, a consumer-focused venture capital firm investing in Indian and South East Asian companies, alongside Delhi-based investor Alkemi Growth Capital.
Previous investors Omnivore and Insitor Partners also participated in the round, along with some angel investors.
The B2B marketplace, formerly TechnifyBiz, had raised $2 million in seed funding in 2020. The funding came from Omnivore, the Insitor Impact Asia Fund alongside Shashank Kumar and Harshil Mathur who are co-founders of the Indian fintech, Razorpay.
Farmley will allocate the funding to channel expansion, growing its team and further building its brand.
Demand for on-the-go nutrition
Rising health concerns and fast-paced modern lifestyles are altering consumption patterns and contributing to the demand for healthy snacking. Fortune Insights projections point that out the healthy snacks market, which comprises of nuts, dried fruits, granola, cereals and seeds, will hit $108.11 billion by 2027.
Farmley’s specialties — nuts, seeds and dried fruits — are also driving ‘on-the-go’ nutrition owing to their high protein content – a food class that’s also witnessing a steady increase in demand globally.
The startup identified that while consumers were willing to pay for these healthy snacks, farmers would earn very little from the produce as middlemen and brand endorsements fixed margins that would favor them and not the farmers.
The Delhi-based startup claims to be building backend linkages and supply infrastructure since it was founded in 2017, to help farmers derive maximum value for their produce. Its platform directly links over 1,000 farmers with processors and wholesale buyers, thus eliminating middlemen.
This, it believes, will help in delivering unadulterated products – which often happens to reduce food costs and increase production volumes – to the end consumers, with far favorable prices. Processors, on the other hand, get timely delivery of produce of their desired quality.
Founded by Akash Sharma and Abhishek Agarwal, Farmely reportedly has five processing units in India and has scaled its revenues by ten times in the last eighteen months.
Distribution and competitive landscape
Farmely has other distribution routes apart from its marketplace. It announced the launch of its first physical store on Twitter in October 2021. Its assortment of over 100 products derived from fruits and nuts, and makhana pasta are available in 20 cities in leading Indian retail and e-commerce outlets such as Flipkart.
Farmley has also expanded its scope to reach the US, Australian and Middle Eastern markets.
The Indian market is also nothing short of dried fruits and nuts brands with online purchase options. They include Happilo, Urban Platter Dry Fruit, Tulsi, Nutraj Dry Fruit, Vedaka Dry Fruit and Nutty Gritties just to mention a few.
What they’re saying
“This segment is large and the unorganized market makes up 95 percent of the market. The products from the unorganized market suffer from quality, hygiene, and adulteration issues. The full backward integration at Farmley ensures premium quality produce and innovative product launches such as India’s first makhana pasta. The company is on a strong growth trajectory and the founders have built a stellar team with laser-focus on customer pain points,” said Hariharan Premkumar, Head of India at DSG Consumer Partners.
“Consumers want quality products that are healthy, tasty, and nutritious. The category is large with significant opportunities for more organized brands,” said Dr. Mansi Aggarwal, Partner at Alkemi Growth Capital.
“Farmley is one of the fastest-growing brands in this segment and the team at the helm has grown the company to an impressive scale while building a sustainable supply chain.”