PC: Inc42
Waycool, one of the best-known agriculture supply chain firms in Chennai, recently made headlines as it successfully concluded a series of debt financing of Rs 100 crore or $12 million with Grand Anicut. It’s quite some time since the first significant infusion of funds into the company since the last couple of years. Here is a strategic move by Waycool in strengthening its financials and maneuvering through the changing scenario of the agritech sector, and at a time when it has been facing funding issues.
The board of Waycool sanctioned the issuance of 1,000 Series B6 debentures at a value price of Rs 10,00,000 each and thus raised 100 crores in a successful regulatory way as confirmed by the regulatory filings accessed from RoC. On coupon rate, it remains competitive at 18% per annum with a tenure of 18 months, where money raised goes into supporting and expanding operations of the current business line of the company. According to its official filings. It feels like a big coup for Waycool, considering that the company has lately failed to get any equity funding for itself.
Founded by visionary duo Karthik Jayaraman and Sanjay Dasari, Waycool operates as one of the key players in the agritech domain, mainly source fresh produce-from dairy products to produce from farmers and distributing the same to retailers and restaurants. In addition, the company brands and distributes private label products, besides partnering with FMCG companies to help them manage their supply chain.
Waycool has gained tremendous traction in the investment space. The company has already raised around $160 million in funds from prominent investors, including Lightrock, International Finance Corporation, FMO, and 57 Stars among many others. It was ready to close in on another $50 million, which might have catapulted its valuation to anywhere in the range of $900 million to $1 billion. It also failed to close the deal on the anticipated funding round and is valued at $700 million from its most recent equity round of funding.
Waycool has undertaken austerity measures, which includes the lay off of 200 employees in different departments, as part of a broader initiative for maintaining the operational performance with which it aims to break even by July this year. Impressively, it has boasted operational performance after facing disturbances on the financial front with operating revenue rising 62% to Rs 1,251 crore in FY23. Losses have risen an astonishing 89%, coming in at Rs 685 crore for the same period. The company hasn’t yet filed its FY24 annual report, reflecting the constant effort into streamlining financial reporting processes.
DeHaat, meanwhile, has admitted that equity capital remains scarce for agritech startups. Companies in this sector are nonetheless beset by challenges pertaining to access to growth capital. This year, with companies like Waycool and DeHaat nearly reaching unicorn status, with Ninjacart also just around the corner, puts the spotlight on the sector’s growth potential as well as its growing interest for investors. In summary, it appears the agritech space still has some way to go toward producing a unicorn-in-waiting and may therefore require some sort of continued investment and care to nudge development forward in this area.
As seen in the emerging trends at Waycool, this funding pattern is more complex within the agritech space, which reflects a larger trend of capital flows that appear to be pretty much constricted. Data from the startup intelligence platform TheKredible indicates that, unsurprisingly, agritech remains one of the least-funded areas for 2024. More than thirty startups collectively raised $150 million by September. This trend continues along a challenging trajectory: Agritech funding declined to $178 million in 2023, while 2022 recorded $772 million and $636 million in 2021. Strategic initiatives are called for in terms of efforts to revitalize investment activities and propel sector growth.
Another notable development running in tandem is the cessation of operations by agritech firm Greenikk on account of operational issues. This indicates that the agritech space is turbulent and intensely competitive. In these changing times, Waycool’s success in its debt financing and subsequent strengthening speak for itself as it not only withstood the implications of the market but also strategized for a future of growth and sustainability.
