Arya.ag Secures $81 Million Investment Amid Falling Global Crop Prices
Arya.ag, a prominent Indian agritech company, has garnered significant investor interest while maintaining profitability, even as global crop prices continue to decline. The company specializes in providing storage facilities near farms and offering lending services to hundreds of thousands of farmers, a model that’s proving resilient against the backdrop of a volatile commodities market.
In its latest funding round, Arya.ag successfully raised $81 million in an all-equity Series D round, with over 70% of this amount allocated as primary capital. The remainder came from secondary share sales, demonstrating strong market confidence in the company’s business model.
The World Bank has issued warnings about falling agricultural commodity prices due to risks like extreme weather, rising input costs, trade disruptions, and shifting biofuel policies. These factors expose businesses to price volatility and potential inventory losses. However, Arya.ag claims it has shielded itself from these adversities by adhering to a model that avoids direct commodity speculation, helping to buffer against price drops.
Empowering Farmers
Founded in 2013 by former ICICI Bank executives—Prasanna Rao, Anand Chandra, and Chattanathan Devarajan—Arya.ag was conceived with a mission to empower farmers. By providing storage close to their farms, it allows farmers to borrow against their stored grain, thereby meeting immediate cash needs while connecting them to a broader array of buyers, from agri-corporations to processors and millers. This innovative approach alleviates the pressure on farmers to sell their produce right after harvest when prices typically plummet.
Operating on a large scale, Arya.ag manages around $3 billion worth of grain annually—constituting roughly 3% of national production—and facilitates loans amounting to about $1.5 billion each year. Impressively, the startup maintains its rate of bad loans, known as gross non-performing assets (NPAs), at below 0.5%, despite the market’s challenges.
Financial Structure and Risk Management
Arya.ag employs a conservative lending strategy, offering loans at only a fraction of the stored grain’s value and closely monitoring market prices. When necessary, they implement margin calls rather than absorb losses directly. Borrowers can address margin calls by repaying part of the loan or adding more grain as collateral, which helps mitigate risk.
Prasanna Rao explains, “You’re not immune to risks. But because your lending is completely secured against commodities, it will never happen that the prices will fall by 90%. You already have a margin of 30%, and with your mark to market, you’ve been able to control your NPAs and defaults.” This prudent approach underscores the systematic risk management strategies fundamental to Arya.ag’s operations.
Impressive Revenue Growth
For the financial year ending March 2025, Arya.ag reported a net revenue of ₹4.5 billion (approximately $50 million). In the first half of the current financial year, revenue increased by about 30% compared to the previous year, reaching ₹3 billion ($33.3 million). The company’s profit after tax stood at ₹340 million (about $3.78 million) last year, with a 39% rise so far this year, showcasing impressive growth.
Arya.ag currently supports between 850,000 and 900,000 farmers across 60% of India’s districts, operating a network of around 12,000 agricultural warehouses leased from third parties. Their revenue streams are diversified, with storage contributing about 50-55%, finance accounting for 25-30%, and the remainder from commerce.
Innovative Loan Solutions
Every year, Arya.ag disburses loans exceeding ₹110 billion (around $1.2 billion) through its platform. Of this, approximately ₹25 to ₹30 billion (roughly $278 million–$333 million) is funded from its own balance sheet via its non-banking finance arm, while the remainder is sourced from partner banks. Arya.ag offers loans at interest rates of 12.5% to 12.8%, significantly lower than the 24% to 36% typically charged by commission agents, yet slightly higher than bank offerings that range from 11% to 12%.
Notably, Arya.ag approves loans within five minutes, processing most transactions digitally, which enhances accessibility for farmers. This swift process is crucial, particularly in rural areas where conventional banking services are often lacking.
Leveraging Technology for Growth
Technology plays a pivotal role in Arya.ag’s operations. The startup employs AI to evaluate grain quality for lending decisions and utilizes satellite data to monitor crop health before harvest. Additionally, it uses advanced sensor-enabled storage bags, allowing farmers to store grain for extended periods even in villages without formal warehouses.
With the recent funding, Arya.ag plans to scale its technological initiatives further, including the expansion of smart farm centers and the deployment of more tools in proximity to farms. Part of the investment will aid in enhancing its blockchain-based system for tracking stored grain, thereby providing transparent oversight of lending and trade transactions.
Future Aspirations and Market Expansion
Looking ahead, Arya.ag aims to be IPO-ready within the next 18 to 20 months. Beyond Indian borders, the startup plans to expand selectively into markets in Southeast Asia and Africa using a technology-driven model. The company currently employs over 1,200 full-time staff, showcasing its commitment to growth and innovation in the agritech sector.
Avendus advised Arya.ag during this latest financial round, highlighting the strategic planning that underpins the company’s expansion efforts.
