Arya.ag, a startup in the agricultural industry, anticipates a fourfold increase in revenue this fiscal year to $175 million
- ByStartupStory | October 7, 2022
The nine-year-old agri company Arya.ag, which declares itself as the largest in the market in terms of profitability, reach, farmers on board, and the volume of agricultural products sold on its platform, anticipates a four-fold increase in sales and net income this fiscal year.
The New Delhi-based firm, co-founded in 2013 by Prasanna Rao, a former ICICI banker, Chattanathan Devarajan, and Anand Chandra, had over USD 45 million in gross sales at the end of FY22, but that number had already surpassed USD 80 million as of July.
“With this run-rate, we anticipate ending fiscal 2023 with a top-line of around USD 175 million and a four-fold increase in net income, which was USD 0.5 million the previous fiscal. We had a net income of $ 2 million up till July, and by March, it should have increased by at least four times ” said the co-founder and managing director, Prasanna Rao.
Apart from inflation, Rao provided explanations for the sharp growth in volume and revenue, stating that their geographic reach rose significantly last year (by over 50%), as did the number of sellers, which nearly doubled to 4,500 farmer-sellers, FPOs, and major farms. They also collaborate with approximately 650 other aggregators.
The company has so far attracted USD 65 million in outside equity funding from investors including the Mumbai-based Omnivore, the Washington, DC-based Quona fund, and the Bengaluru-based Lightrock fund. A little less than 50% of the company is owned by these investors, who have contributed a total of USD 65 million.
The remaining ownership is held by the company’s founders and a few private investors, according to Rao. The business asserts that it is the only agribusiness startup that has generated a net profit since its 2013 activities began. Arya has more than 11,000 warehouses spread across more than 800 sites in 450 districts throughout 21 states, with Bihar having the broadest geographic reach.
More than 8,000 vendors and more than 2,200 trades use the over 3,65,25,000 tonne of farm products that can be stored in its facilities. According to Rao, the platform handles more than 7,00,000 tonnes of grain annually, or almost USD 2.5 billion.
The grain commerce platform links producers and consumers, ensuring payment, quantity, and quality by preventing farmer distress sales. One of its special services, according to Rao, is paying farmers upfront 70% of the value of their harvest, preventing them from turning to distress sales.
Around Rs, 6,500 crore worth of loans are in the company’s loan book, half of which are on its books and the other half are in the books of lending banks, which could pass this advance or loan as priority sector lending.
According to Rao, Arya charges a farmer an advance payment of 12.5% to 13%, and even after this, the typical farmer still makes 15% more than a farmer who is not on his platform. He continued, “Some of them even make 25% extra for their produce.”
Farmers, farmer producer organisations (FPOs), financial institutions, SME agricultural processors, commodities dealers, and corporate agricultural firms are some of Arya’s clients. In addition to giving credit to farmers, FPOs, and SME aggregators (processors/traders) who have stored agricultural goods in its warehouses, Arya also offers warehouse receipt finance through Aryadhan, its wholly-owned NBFC subsidiary.
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