Waycool Agritech in Talks to Raise $40 Million in Internal Funding Led by Lightrock
- ByStartupStory | November 9, 2023
Chennai-based agritech startup Waycool is in discussions with existing investors to secure $40 million in an internal funding round, led by Lightrock. The move follows a setback in securing a larger round from external investors, as reported by sources.
Initially anticipated to be a $15-20 million capital infusion, Waycool clarified that the round is significantly larger at $40 million, featuring participation from Lightrock and other existing investors. A spokesperson for the company revealed, “We are in the process of raising a $40 million round through a rights issue with Lightrock being the anchor. The round is close to getting fully subscribed as we are getting good traction from institutional investors, as well as family offices. We intend to close it in the next few weeks.”
Waycool’s existing backers include Lightbox Ventures, Redwood Equity Partners, Huruma Fund, Innoven Capital, and the World Bank Group’s private investment arm, International Finance Corporation. The additional capital aims to assist the company in overcoming liquidity challenges.
Despite being valued at approximately $585 million in its last equity round in June 2022, sources suggest that Waycool might not experience a valuation uptick with the new round, potentially categorizing it as a bridge or a down round.
“The purpose of this round is to further strengthen our consumer brands’ momentum. This influx of capital will further our efforts in propelling the company’s growth. A larger funding round continues to progress at the desired pace and is currently undergoing documentation,” added the Waycool spokesperson.
Reports in June indicated Waycool’s discussions with sovereign wealth funds, impact funds, and family offices to raise $50-70 million in primary capital. However, the company faced delays and lack of interest from new investors, making the outcome of the larger round uncertain.
Founded in 2015 by Karthik Jayaraman and Sanjay Dasari, Waycool operates as a full-stack platform, offering services such as high-volume trading of raw agri-produce, logistics, distribution solutions, private label packing, and farmer engagement platform Outgrow, FMCG subsidiary BrandsNexxt, and supply chain tech platform Censa.
Facing competition from rivals like DeHaat and Ninjacart in the agritech space, Waycool, like many others in the sector, is currently a loss-making venture. However, CEO Jayaraman expressed plans for profitability and an IPO by 2025 during a recent media conference.
Although Waycool is yet to file its FY23 results, FY22 revenues amounted to Rs 927 crore, a significant increase from Rs 382 crore the previous year. Despite the revenue growth, losses widened 2.4X to Rs 360 crore in FY22 due to higher expenses, which stood at Rs 1,289 crore, up from Rs 535 crore in FY21. The company has initiated cost-cutting measures, including laying off around 300 employees and closing some experimental projects to focus on the core business.
“In the last 18 months, we have restructured the company to fast-track our journey towards profitability, focusing on our core prowess. We are confident of breaking even in the beginning of Q4 of the current fiscal. This achievement is attributed to the substantial traction our brands have gained, not only in dry groceries but also in the fresh produce sector,” stated Waycool’s spokesperson.
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The company asserts its presence in over 850 towns in South India, claiming market leadership in many of these areas.
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