Omnivore Agritech & Climate Sustainability Fund III

Equity : July 2023

The SDG Frontier Fund has invested USD 2.5 M in equity in the Omnivore Agritech & Climate Sustainability Fund III, an Indian VC fund specialized in the Agritech sector. A follow-on investment of USD 1 M was signed in October 2023, bringing the total commitment to USD 3.5 M.

This is an investment by SDG Frontier Fund

Amount

$ 3,500,000.00

Type of investment

Equity

Development impacts

Local economic growth
Food security & rural development

Beneficiary locations

Asia: India

Investment field

Investment Companies & Funds

Activity

KK.64.300 SME Fund

Organisation

Omnivore Agritech & Climate Sustainability Fund III

Website

https://www.omnivore.vc/

Domicile

India

More investments in

Omnivore Agritech & Climate Sustainability Fund III

Equity $ 5,000,000.00 (2023)

Omnivore Agritech & Sustainability Fund III (OF3) is an Indian VC fund specialided in the Agritech sector (food, agriculture and the Indian rural economy). It is the Manager’s third fund and a direct successor to Omnivore Partners India Fund II (OF2), in which BIO has invested. Investment strategy and thesis remain the same i.e. supporting technological companies that deliver products and services having a disproportionate impact on the lives of farmers and rural communities in India.

The main difference with OF2 is the larger fund target size (USD 130 M), as well as a higher focus on life sciences and climate resilience.

Development impacts

Local economic growth
The fund provides long-term growth capital to start-up companies developing innovative technologies for food, agriculture, and the rural economy.

Omnivore’s focus is on platforms, data or innovative tech solutions, that can provide the necessary leverage to reach a larger market and impact a larger number of households/farmers.
Food security & rural development
Omnivore’s investment/impact strategy targets smallholder agriculture and aims at increasing the profitability of smallholder farmers, the sustainability of smallholder agriculture and reducing the uncertainty borne by smallholder farmers.

With an almost exclusive focus on food and domestic market-oriented agriculture, Omnivore investments contribute to the availability of food products in the local market, through increasing farmers' yield, reducing the cost of inputs and wastage, enhancing pricing transparency and building more efficient marketplace/technology platforms for trading agri-food products.

OF3 is expected to be comparable with OF2 in terms of reach, which in 2021 impacted about a million smallholders’ lives and created USD 200 M+ of economic value to smallholder farmers, mostly through increased revenues and/or lower input costs.

E&S Impact

Together with BII and FMO, BIO will support the upgrade of Omnivore’s current Environmental and Social Management System (ESMS) that will strengthen the capacity of the fund manager to deal with its investees’ risks related to climate, gig economy, data security as well as general contextual and safeguarding risks. In particular, attention will be given to enhance the E&S governance for scaled up clients. Finally, the fund manager will formalize its commitment not to invest in fossil fuels and will upgrade its current grievance mechanism.

Situation at the time of investment

The fund manager has a good ESMS that allows it to identify and mitigate the E&S risks of its investees throughout all the steps of the investment cycle. In particular, all E&S due diligence are performed by an external consultant who also takes care of a monitoring audit 12-18 months after disbursement. Furthermore, Omnivore recently hired an experienced ESG & Impact lead that will support the fund manager on the E&S and Development topics.

Risk Category: B

Other investments by

SDG Frontier Fund

TIDE Africa II Fund (Equity) $ 2,500,000.00 (2022)
Uhuru Growth Fund I-A SCP (Equity) $ 2,500,000.00 (2022)
AfricInvest Financial Inclusion Vehicle (Equity) € 3,200,000.00 (2022)
Ezdehar Mid-Cap Fund II (Equity) $ 1,700,000.00 (2021)
Cathay Africinvest Innovation Fund (Equity) € 4,000,000.00 (2021)
Incofin India Progress Fund (Equity) € 3,500,000.00 (2021)
Ascent Rift Valley Fund II (Equity) $ 4,000,000.00 (2020)
African Rivers Fund III (Equity) $ 1,700,000.00 (2020)
Excelsior Capital Vietnam Partners (Equity) $ 2,200,000.00 (2020)
South Asia Growth Fund II (Equity) $ 2,200,000.00 (2020)

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