Waycool Foods and Products, one of the largest food and agritech companies in India, is planning to raise $250 million to fund its growth plans, which include expansion in the UAE and development of a plug-and-play platform for food supply-chain specialist companies.
CEO and co-founder Karthik Jayaraman told Zawya that the company intends to use a portion of the money to fund growth and the rest to tap consolidation opportunities in the food supply-chain space.
He said: “There are individual specialists in each supply chain. We want to be a keiretsu of sorts, where they plug into our platform and use the access it provides, while we use the depth they have in their supply chain.” He added that this keiretsu approach is the primary reason for the larger round being sought.
Jayaraman said that Waycool has been running a disciplined operation and has avoided the cash burn that is endemic to hyper-funding.
“We have raised $160 million in equity so far through multiple rounds. I still have nearly half of that left in the bank,” he said, adding that the company has now reached a run rate of $250 million. “We have largely covered all our variable costs and part of our sales costs, and by the end of this year, we will cover all our operating costs.”
India–UAE food bridge
Waycool recently opened an office in Dubai and intends to build a “reliable food supply chain” between India and the UAE.
“We are offering our services to be a supply chain partner - that’s the fundamental intent, in grains and staples, and in fresh produce,” Jayaraman said.
The region depends on India for 23–23 varieties of fresh produce, he added. “Being a supply chain partner [with us] means if there is programmatic buying in the Middle East, then we will programmatically cultivate, do post-harvest treatment, store the material and supply based on a demand plan.”
He said the company has already identified 21–22 clusters [in India] where crops that are relevant to the UAE can be grown. “We have a rough acreage plan in place [and] identified the number of collection centres, where storage units have to be put up, which ports to connect. We did this two years ago, but Covid was a disruptor.”
Based on the “fructification of the strategic supply chain,” Waycool will establish warehousing and specialised storage capacity such as ventilated storage and cold storage for specific products in the UAE.
Jayaraman said the company’s investors need to understand the challenges specific to the food supply chain space. “I am sure there are lots of investment houses looking to solve food security for the region. I am putting up my hand and saying I will help you, and if that is an additional reason for you to invest in me, then we have alignment of objectives.”
Early investors in Waycool include development financial institutions like the IFC, FMO, and Light Rock, the social impact investment arm of LGTG, owned by the princely House of Liechtenstein.
“All these funds understand the sector well and are involved in the company’s operations. For example, the IFC is helping us figure out what is the Delta in food waste. FMO connected with Wageningen University, with whom we are working on post-harvest areas. Our investors work very hard for us, and we want such investors.”
(Reporting by Anoop Menon; editing by Seban Scaria)