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Venture Funding Opportunitiesin Agriculture Sector
March 10, 2011
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TABLE OF CONTENTS
Omnivore Capital Overview
Agriculture in India
Why Ag-Tech?
Investment Strategy
Omnivore Team
Strategic Advisor: Godrej
Fund Terms
Contacts
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OMNIVORE CAPITAL OVERVIEW
Omnivore Capital is an early stage venture capital fund investing in
agricultural technology (ag-tech) startups in India
planned fund size of Rs 250 crore
investing primarily in Series A and Series B rounds
select few Seed investments
Focused on entrepreneurs and scientists who are innovating solutions
to improve agricultural productivity and sustainability
Godrej, one of Indias oldest and most trusted business conglomerates,
is the Strategic Advisor to Omnivore Capital
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GLOBAL FOOD SYSTEM UNDER SEVERE STRESS
Source: FAO
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RUNAWAY FOOD PRICE INFLATION ALSO HITTING INDIA
Government of India: Wholesale Price Index (WPI), April 2006 = 100
Source: Office of the Economic Adviser, Government of India
80
100
120
140
160
180
200
220
240
260
Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10
Cereals
Pulses
Vegetables
Milk
Eggs, Meat, Fish
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SNAPSHOT OF INDIAS AGRICULTURAL ECONOMY
68% of Indian
population linkedto agriculture
Agriculture
represents 17.2%of Indias GDP
Average farm size~1.4 hectares
Largest producerof milk globally
Second largestproducer of fruits andvegetables globally
Among the top fiveproducers worldwideof rice, wheat,oilseeds, sugar,groundnuts, tea,coffee, and spices
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INDIAS RURAL INCOMES RISING, POVERTY FALLING
Indias rural poor (millions)
548614
514
403
263
0
100
200
300
400
500
600
700
1985 1995 2005 2015E 2025E
% of ruralpopulation
96% 90% 65% 46% 29%
Rural poor defined as those with annualHH income of
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3,9315,622 7,147
11,547
17,296
1985 1995 2005 2015E 2025E
AS INCOMES RISE, FOOD CONSUMPTION WILL JUMP
Aggregate rural consumption of food products, Rs billion (FY2000)
Source: MDI India consumer report
3.0%
2.4x4.5%
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-8%
-6%
-4%-2%
0%
2%
4%6%
8%
10%
12%
FY95 FY97 FY99 FY01 FY03 FY05 FY07 FY09 FY11E
WEAK AGRI GROWTH THREATENS FOOD SECURITY
Indian agricultural GDP growth, % y-o-y
Drought years
Source: CMIE
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SHRINKING FARMLAND HOLDINGS BECOMING UNVIABLE
Average size of farm land holdings in India (hectares)
2.7
2.3
1.8
1.61.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1961 1971 1981 1991 2002
Source: www.agricoop.nic.in
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INVESTMENTS IN AGRI SECTOR HAVE RAMPED UP
Gross capital formation, % of Agri GDP (nominal)
0%
2%
4%
6%
8%
10%
12%
14%
16%
1995 1997 1999 2001 2003 2005 2007
2x
Source: B&K Research
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BUT INDIAN AGRI YIELDS STILL TERRIBLY LOW
Maize yield (MT/hectare)
9.7
6.55.6
4.1 4.1
2.4
0
1
2
3
4
5
6
7
8
9
10
USA Argentina China Brazil Indonesia India
Pulse yield (MT/hectare)
2.01.8 1.6
1.10.9
0.6
0
0.5
1
1.5
2
2.5
Canada USA China Myanmar Brazil India
Paddy yield (MT/hectare)
6.6
5.24.9
4.03.4
0
1
2
3
4
5
6
7
China Viet Nam Indonesia Bangladesh India
Soybean yield (MT/hectare)
2.8 2.8 2.8 2.7 2.6
1.7
1.0
0
0.5
1
1.5
2
2.5
3
Argentina Brazil Canada USA Paraguay China India
Source: FAO
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INDIA HISTORICALLY UNDER-INVESTED IN AGRI R&D
R&D intensity (R&D spend as % of Agri GDP)
0.3% 0.4%
1.8%
2.7%
3.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
India China Brazil USA Japan
Source: Pray and Basant, 2001, IFPRI research report
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BUT INDIAN FARMERS RAPIDLY ADOPT NEW TECH
Hectares (millions) of cotton in India
0
2
4
6
8
10
12
CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09
Non-Bt
Bt
Source: www.fbae.org
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PRIVATE SECTOR AG-TECH CAN DRIVE PRODUCTIVITY
Indian cotton production in million bales (170 kg)
Yield(kg/ha)
56747839930826710692
Source: www.cotcorp.gov.in
50 years 10 years
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PUBLIC SECTOR DRIVES INDIAS AG-TECH ECOSYSTEMFunding channels for Agri R&D, FY2000, $ (nominal)
Grants to ICAR($252.4 mn)
Externally aided projects($33.7 mn)
AP cess funds($5.8 mn)
Internal resources($9.2 mn)
Other public sources$2.4 mn
State governments$277.0 mn
Business$69.9 mn
Central government
Grant to ICARinstitutes
$210.2 mn
ICAR schemes$79.9 mn
Competitive grants$10.8 mn
ICAR institutes$239.2 mn
State agriculturaluniversities$332.9 mn
Other public R&Dinstitutes$4.4 mn
Business organizations$73.7 mn
Source: Pray and Basant, 2001, IFPRI research report
Ag-tech in India overseen by Indian Council of Agricultural Research (ICAR)
public sector organization with ~30,000 researchers across 100+ institutes
State agricultural universities (SAUs) also play critical role in ag-tech R&D
ICAR and SAUs only recently began commercializing ag-tech innovations
Huge opportunity to launch startups, bring great technologies to market
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INVESTMENT STRATEGY: FOCUS AREAS
Early stage ag-tech startups in India
Characteristics of successful venture-backed startups
strong team
highly scalable, capital-efficient
differentiation based on technology (IP) or business model
Which focus areas do we like?
plant science, animal science, aquaculture, sustainable inputs
farm equipment, water management, agriculture services
farmer finance, bio-fuels, distributed power generation
rural information services, post-harvest infrastructure
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PREPARING FOR FUND RAISE: BASIC REQUIREMENTS
Entrepreneurs to make a Realistic Business Plan
Detailing the next stage and the path to achieve the same
Skin in the Game
Sharing Ownership and Control
Exit Options for the Investors
Alignment of Interests between Entrepreneurs and Investors
Talk to Investors Directly and be Flexible in Approach
Fund Raising is a long Process Be Patient
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OMNIVORE TEAM
Atish Babu
Partner
Vice President at Nexus Venture Partners, leading Indian VC firm
Vice President (Corporate Development) at Vonage
Investment Analyst with Battery Ventures
MBA from Harvard Business School; BS from Massachusetts Institute of Technology
Mark Kahn
Venture Partner
Executive Vice President (Business Development) at Godrej Agrovet
Strategy Manager at Syngenta AG
Began career as turnaround consultant with PFM
MBA from Harvard Business School (Baker Scholar); BA from Univ. of Pennsylvania
Jinesh Shah
Partner/CFO
Vice President and CFO at Nexus Venture Partners, leading Indian VC firm
Finance Manager at Patni Computers; led M&A, IPO activities
Assistant Manager at HCL; helped start BPO business
Chartered Accountant; MBA from JBIMS; B.Com from R A Poddar College
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STRATEGIC ADVISOR & LP: GODREJ
114 years old (established in 1897)
Largely privately owned by Godrej family
$3 billion sales turnover
21,000+ employees
100 manufacturing locations in India & abroad
Diversified: 6 focal companies (3 publicly traded)
Global operations in 16 countries
Godrej touches the lives of 470 million Indians daily
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With ~1900 employees and total FY2009-10 sales of Rs ~1600 crore,Godrej Agrovet Limited (GAVL) has interests in:
GAVL Mission: to improve the productivity of Indian farmers by innovatingproducts and services that sustainably increase crop and livestock yields
GODREJ AGROVET IS A DIVERSIFIED AGRIBUSINESS
AnimalFeed
Indias largestcommercial feed
miller Market leader in
cattle, poultry, andaqua feed
Bangladesh JVwith ACI
Poultry(Godrej Tyson)
Market leader inprocessed poultry,
frozen snacks Partnered with Tyson
Foods, the worldslargest meatprocessor
Oil PalmPlantations
Largest oil palmcultivator in India,
with 40,000hectares
Operating in AP,TN, Goa, Orissa,Gujarat, Mizoram,and Karnataka
AgriInputs
Market leader inplant growth
regulators,soil conditioners,cotton herbicides
Strong pipeline ofinnovative products
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GODREJ AGROVET VALUE ADDITION TO OMNIVORE
Due diligence capabilities
evaluation by technical experts
ability to conduct field trials
verify investment assumptions with distributors/farmers
Scale up portfolio companies
connect startups to distributors, suppliers, customers
help optimize manufacturing/operations
identify talent from agribusiness industry
Values driven organization
strong regulatory compliance
transparent corporate governance
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THANK YOU FOR YOUR TIME AND CONSIDERATION
THIS PRESENTATION CONTAINS CONFIDENTIAL INFORMATION REGARDING THE BUSINESSAND OPERATIONS OF OMNIVORE CAPITAL AND ITS AFFILIATES AND IS BEING PROVIDEDTO RECIPIENTS ON A CONFIDENTIAL BASIS. THIS PRESENTATION IS FOR INFORMATIONALPURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATIONOF AN OFFER TO BUY ANY SECURITIES. ANY SUCH OFFER OR SOLICITATION WILL BE
MADE ONLY PURSUANT TO A CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM.
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