Joining hands with Mark Kahn, Jinesh co-founded Omnivore in 2010. Previously, he was Vice President and CFO at Nexus Venture Partners, one of India’s leading venture capital funds.
Jinesh has worked in corporate finance roles for Datamatics (leading Treasury/M&A), Patni Computers (initiating the IPO process), and HCL Technologies (founding the BPO business) earlier in his career.
He is also a member of the IMC Chamber of Commerce and Industry’s Agriculture & Food Processing Committee. Jinesh is a Chartered Accountant with a B.Com from R A Poddar College and an MMS (Finance) from JBIMS.
We had a candid interview with Jinesh Shah, Co-founder Omnivore. Here is the verbatim transcript.
What inspired you to launch Omnivore?
During my tenure as CFO at Nexus Venture Partners, the fund was invested in a few rural-focused startups. I saw this as an exciting new direction. Most of the VC investments at that time were focused on solving the problems of upper-income urban Indians, overlooking the rural economy employing half the Indian workforce.
I wanted to do more deals in this space, and together with Mark Kahn (who came from the agribusiness industry) launched Omnivore as a venture capital firm focused entirely on backing startups developing innovations for agriculture, food, and the rural economy. We believe the challenges faced by Indian farmers can be solved with agritech innovations accelerated by risk capital.
Would you brief about Omnivore and how it works?
Omnivore is a venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems. Omnivore pioneered agritech investing in India, backing over 25 startups since 2011, and currently manages INR 9.35 billion (approximately USD135 million) across two funds.
Omnivore invests in Indian startups developing breakthrough technologies for agriculture, food, climate resilience, and the rural economy. Our investment thesis focuses on nine core agritech themes: Farmer Platforms, Precision Agriculture, Agri Biotech, Innovative Foods, Rural Fintech, Agri B2B Marketplaces, Farm to Consumer (F2C) Brands, Agribusiness SaaS, and Post-Harvest Technologies.
Omnivore typically invests in Seed, pre-Series A, or Series A funding rounds, reserving enough capital to participate in follow-on rounds through Series B. Our typical first cheque ranges from USD 500,000 to USD 2 million in a Seed or pre-Series A round. If we are entering the Series A round itself, then our first cheque ranges from USD 2 million to USD 4 million.
How COVID 19 has impacted your investment plan?
Interestingly, the pandemic has had a positive impact on our portfolio. The disruption of status quo relations in the agricultural ecosystem has accelerated farmer interest in and adoption of agritech. For the first six months into the lockdown, our pace of new investments slowed down, but we focused our energies on follow-on investments and had significant traction there. However, we have resumed our pre-pandemic pace of new investments and have multiple deals that will be announced soon.
How challenging is it to source prospective investments in this pandemic?
As the most active investor in Indian agritech, Omnivore sees practically every new startup in the ecosystem. Consequently, we have not found it challenging at all to source new investments, especially since more and more agritech startups have launched over the past year, reflecting the transformations underway in Indian agriculture. Agritech startups are seeing tremendous success in helping farmers migrate from traditional, informal, and analog transactions to innovative, formal, and digital transactions.
What kind of deals do you finance?
We look for agritech startups that are developing solutions to make farming more profitable, resilient, and sustainable.
Who can benefit from your investment?
Our investments benefit agritech startups transforming the overall agri value chain, farmers who can improve their livelihoods by adopting such innovations, and also consumers who can ultimately have better access to sustainable, high-quality foods.
How different are your services from others offering similar services?
Omnivore is the oldest venture capital firm in India focused solely on the Indian agriculture and food sector.
How you plan to expand your company in the prevailing pandemic?
We aim to keep scouting for good investment opportunities and continue with a relatively high rate of investment in agritech startups throughout the pandemic.
As an investor, what do you look for in potential portfolio companies?
When we assess startups, we primarily look at the three Ts – Team, Technology, and Traction. The company must have founders with strong educational pedigrees and work experience, ideally in other startups. The technology aspect is equally important, as entrepreneurs must be able to develop unique propositions for their customers. Finally, they must be able to show strong early traction, indicating product-market fit.
Do you think the fiscal policies of the Indian Government will help startups to thrive and sustain in this uncertain economy?
The recent Farm Bills will create tailwinds for agritech startups. Anyone working on market linkages, post-harvest services, or digital farmer platforms will benefit from the new laws, which enable direct interfacing with farmers. The Bills take much of the regulatory uncertainty in the agri value chain away, and agritech startups will be more nimble-footed than large agribusinesses in building farm-sourcing systems and related infrastructure.
According to you why startups find it difficult to get funding for their ventures?
Concerning agritech startups, when we started back in 2011, the sector was at a very nascent stage. Investor attention was hard to capture and there were only a handful of viable startups in this space. The situation is vastly different now. Agriculture has come out on top in this pandemic and investment trends in this sector are encouraging. So as long as startups have strong founders and robust innovations, funding won’t be far behind.
Would you like to send any message to startups who are looking out for funding?
If you have an idea for disruptive innovation, work hard on it, build a strong team, test market feasibility, and the funding will come. In short, keep in mind the three Ts.
What do you think are the major areas a startup should work on to get funding especially in this pandemic?
India’s agritech sector is witnessing a paradigm shift catalyzed by digitization and rural smartphone penetration. Agritech as an asset class is much more interesting for investors now. Furthermore, depending on what the startup is working on, as long as it ticks the three Ts (question 9), the road to funding will be fruitful, pandemic, or otherwise.
What business strategies have you formed to expand your business and reach out to a wider segment of needy people?
The answer lies in our Theory of Change built on three pillars – increasing smallholder profitability, enhancing smallholder resilience, and improving agricultural sustainability. Combined, these will help us achieve our vision of driving agricultural prosperity and transforming food systems in India.