Hyderabad-based consulting organisation Sathguru Management Consultants is raising $100 million to start an Innovation in Food and Agriculture Fund (IFAF) that will be managed by their fund management company Sathguru Catalyser Advisors.
They plan to invest approximately $8 million each in eight to 12 companies for a significant minority stake.
The fund is on a lookout for companies that are engaged in adopting technology solutions to address complex issues impacting agriculture, food and nutrition in India, with the first deal expected to close by mid-2017.
Sathguru Management Consultants, which is the sponsor of the fund, brings to the table an experience of 30 years from the fields of agriculture, food and healthcare sectors during which they have worked with enterprises right from the incubation stage to market leadership phase.
The fund will be headed by Vijayaraghavan K, A Krishna Kumar, Prabhu C and Venu Gopal Chintada. The four partners together bring in expertise from different areas -ranging from enterprise incubation and fund raising, to banking and venture fund management.
“We want to bring in techno-commercial expertise,“ Chintada, partner at Sathguru Catalyser Advisors told ET. “We are focusing on established businesses that have already created channel partners and developed product on a commercial level. From that stage, if they struggle to move up to the full fledged growth stage, that is where we want to come in.“
Referring to their fund as an accelerator fund, the partners intend to invest in early commercial stage companies.
Partners at the fund believe that current funds that focus on food and agri-business sectors are risk-averse and biased towards growth by investing in established business models rather than early-stage companies.
They claim that this fund by Sathguru would meet the significant unmet demand for early stage growth capital in agriculture and food companies in India.
While the fund is focused on innovation-led companies, their target may not necessarily be startups. “Today innovation is used interchangeably with startup. However, we are not necessarily talking about startups because innovation takes place in mid and large-size companies as well,“ added Chintada.