Agritech startup Ergos raises $10 million in funding led by Abler Nordic

Bengaluru-based agritech startup Ergos on Friday said it has raised $10 million in a Series B stage funding round, led by Oslo, Norway-headquartered financial inclusion fund Abler Nordic.

The round saw participation from returning investors such as Aavishkaar Capital, Chiratae Ventures and Trifecta Venture Debt Fund.

The capital raised was a combination of $7 million in equity and $3 million of debt, founder and CEO Kishor Jha told ET.

The 2012-founded startup stores and digitises grains for farmers, and also converts these grains into tradable digital assets, which act as collateral for the farmers to borrow money from partner banks. Ergos has three banking partners that are currently active, including Shivalik Bank, with two more joining up in the coming weeks.

In 2021, the platform disbursed loans worth Rs 100 crore, an estimate that the startup aims to double in 2022, Jha said.

Ergos’ platform also helps with market linkage, allowing buyers to choose from the farmers’ produce – mainly maize, wheat and paddy.

The company helps small and marginal farmers, with an average land-holding of 2-3 acres, access storage services for 8-9 months after the harvest. The farmers can then access credit from partner lenders for up to 70% of their stored and digitised grain through an end-to-end digital process.

The company makes money from the grain management fee that it collects from farmers, a fee from the lender from the fintech layer and from the buyer with a mark-up in the market linkage side, Jha told ET.

Ergos currently supports over 160,000 farmers on its platform and has a physical network of farm-gate based warehouses branded as Grainbank in over 200 locations across Bihar, Karnataka and Maharashtra.

Over the past decade, the company said it has helped farmers increase their income by 30-35% in a year. “Ergos is helping solve the problem that many farmers in India increasingly face – produce spoiling due to lack of access to quality storage, affecting both the farmers’ income and general food security,” Arthur Sletteberg, managing director of Abler Nordic, said.

“An app-based interface facilitating trades and financing with the ability to serve smallholder farmers and inherent strong network effects within farmer and buyer communities on the Ergos platform, strongly positions the company for a rapid expansion in the over 300 million metric tonnes grain market in India,” Shashvat Rai, partner, Aavishkaar Capital who invested through the Aavishkaar Bharat Fund, said.