PC: Entrackr
A major set back to the agritech landscape came in the form of news that promising startup Greenikk was shutting shop due to funding challenges and unfavorable market conditions. While raising nearly $1 million in total capital from investors including 100 unicorns (9unicorns), IIM A ventures, Mastermind Capital, Smart Sparks, and notable angel investors like Mayank Tiwari of ReshaMandi, Greenikk could not overcome the hurdles it faced.
Co-founder Fariq Naushad of Greenikk spoke to the reasons behind the shutdown and mentioned the apparent difficulties he faced in securing the next round of funding-mainly, of course, the much-awaited Series A funding that was expected to raise $5 million. Naushad admitted the strategy difference in growth that was pursued during a phase when low-interest capital was aplenty in 2022, along with changes in the agritech sector that was challenging for the growth plans envisioned by the company.
Among the measures by which Greenikk can take accountability and show transparency in winding down the business is looking at returning a bit of the capital to the investors following the funding constraints and shifts in the market. He also mentioned the huge problem of defaults in the agri segment, talking about the fact that it is getting tough for the company to recover loans to the tune of Rs 6 crore. Some receivables were still pending from some stakeholders even when efforts were made for six months to collect those amounts as the dues.
Other players in the business have also echoed challenges of defaults and collections, as seen in the case of ReshaMandi, facing issues that led to its shutting down. Such ballooning liabilities and high default rates have really been obstacles for those companies participating in the agri-tech space, amplifying the difficulties associated with this sector and therefore requiring proper risk management mechanisms.
The company, with the shutdown in sight, is paying out much to the employees’ welfare, distributing two months’ severance package and further using references for job placement for nearly 25 people who were to suffer from the closure of the organization. Meanwhile, the founding team members of this organization, Naushad and Previn Jacob Varghese, talk about their next entrepreneurial ventures as they move in this transition of their professional lives.
The challenges Greenikk is going through have mirrored trends at the overall level in the agritech ecosystem, where companies are reaching that point of failure when they find it hard to secure venture capital for big funding rounds. Data analysis from TheKredible found that funding activities in the agritech space were particularly concerning in 2024, with $150 million raised across more than 30 deals so far. This is in contrast to the fundraising boom noticed in 2021 and 2022, when agritech startups secured major checks valued at $636 million and $772 million, respectively. Funding in 2023 plummeted to $178 million, and the drop underlines the shift and challenges facing agritech ventures in the present market environment.
