Agritech startup Greenikk stated on Monday that it is shutting down operations due to funding challenges and difficult market conditions.
Greenikk͏͏ had͏͏ secured͏͏ approximately͏͏ $1͏͏ million͏͏ in͏͏ total͏͏ funding͏͏ from͏͏ investors,͏͏ including͏͏ 100͏͏ Unicorns͏͏ (9unicorns),͏͏ IIM͏͏ A͏͏ Ventures,͏͏ Mastermind͏͏ Capital,͏͏ Smart͏͏ Sparks,͏͏ and͏͏ angel͏͏ investors͏͏ like͏͏ Mayank͏͏ Tiwari͏͏ of͏͏ ReshaMandi.
“We͏͏ raised͏͏ capital͏͏ in͏͏ 2022,͏͏ a͏͏ time͏͏ when͏͏ low-interest͏͏ funding͏͏ was͏͏ accessible͏͏ and͏͏ agri-tech͏͏ was͏͏ at͏͏ its͏͏ peak.͏͏ However,͏͏ we͏͏ focused͏͏ on͏͏ the͏͏ wrong͏͏ metrics͏͏ for͏͏ growth͏͏ and͏͏ scaling.͏͏ The͏͏ changing͏͏ industry͏͏ dynamics͏͏ made͏͏ it͏͏ challenging͏͏ to͏͏ secure͏͏ the͏͏ planned͏͏ $5͏͏ million͏͏ for͏͏ our͏͏ next͏͏ Series͏͏ A͏͏ round,”͏͏ said͏͏ Fariq͏͏ Naushad,͏͏ co-founder͏͏ of͏͏ Greenikk.
Capital͏͏ Return͏͏ to͏͏ Investors:
According͏͏ to͏͏ the͏͏ company,͏͏ it͏͏ is͏͏ returning͏͏ a͏͏ portion͏͏ of͏͏ the͏͏ capital͏͏ to͏͏ investors.
Naushad͏͏ also͏͏ emphasized͏͏ the͏͏ challenges͏͏ of͏͏ defaults͏͏ in͏͏ the͏͏ agri͏͏ sector.͏͏ “Stakeholders͏͏ are͏͏ not͏͏ repaying͏͏ their͏͏ loans.͏͏ We͏͏ extended͏͏ loans͏͏ worth͏͏ INR͏͏ 6͏͏ crore͏͏ and͏͏ encountered͏͏ defaults.͏͏ Significant͏͏ receivables͏͏ were͏͏ tied͏͏ up͏͏ with͏͏ certain͏͏ clients͏͏ who͏͏ resisted͏͏ payment͏͏ after͏͏ accruing͏͏ substantial͏͏ amounts.͏͏ We͏͏ spent͏͏ nearly͏͏ six͏͏ months͏͏ on͏͏ the͏͏ ground͏͏ to͏͏ collect͏͏ 80%͏͏ of͏͏ the͏͏ receivables,”͏͏ said͏͏ Naushad.
Continue͏͏ Exploring:͏͏ Centre͏͏ launches͏͏ INR͏͏ 750͏͏ Cr͏͏ AgriSURE͏͏ fund͏͏ to͏͏ boost͏͏ agritech startups
Defaults͏͏ and͏͏ collections͏͏ have͏͏ emerged͏͏ as͏͏ major͏͏ challenges͏͏ in͏͏ the͏͏ agri-tech͏͏ sector.͏͏ ReshaMandi,͏͏ once͏͏ a͏͏ leading͏͏ player͏͏ in͏͏ the͏͏ industry,͏͏ encountered͏͏ difficulties͏͏ in͏͏ collecting͏͏ receivables,͏͏ ultimately͏͏ contributing͏͏ to͏͏ its͏͏ downfall.͏͏ The͏͏ company͏͏ grappled͏͏ with͏͏ high͏͏ defaults͏͏ and͏͏ increasing͏͏ liabilities,͏͏ which͏͏ compelled͏͏ it͏͏ to͏͏ shut͏͏ down.
Greenikk Offers͏͏ Support͏͏ for͏͏ Employees:
Greenikk͏͏ stated͏͏ that͏͏ it͏͏ will͏͏ provide͏͏ two͏͏ months͏͏ of͏͏ severance͏͏ and͏͏ job͏͏ offers͏͏ through͏͏ references͏͏ to͏͏ nearly͏͏ 25͏͏ employees,͏͏ while͏͏ the͏͏ founders,͏͏ Naushad͏͏ and͏͏ Previn͏͏ Jacob͏͏ Varghese,͏͏ are͏͏ exploring͏͏ the͏͏ next͏͏ phase͏͏ of͏͏ their͏͏ entrepreneurial͏͏ journey.
After͏͏ a͏͏ substantial͏͏ fundraising͏͏ boom͏͏ in͏͏ 2021͏͏ and͏͏ 2022,͏͏ agritech͏͏ startups͏͏ are͏͏ currently͏͏ struggling͏͏ to͏͏ secure͏͏ venture͏͏ capital͏͏ for͏͏ larger͏͏ funding͏͏ rounds.͏͏ According͏͏ to͏͏ data͏͏ from͏͏ TheKredible,͏͏ these͏͏ startups͏͏ have͏͏ raised͏͏ about͏͏ $150͏͏ million͏͏ across͏͏ more͏͏ than͏͏ 30͏͏ deals͏͏ in͏͏ 2024͏͏ so͏͏ far,͏͏ with͏͏ no͏͏ transactions͏͏ occurring͏͏ in͏͏ September.͏͏ By͏͏ contrast,͏͏ they͏͏ raised͏͏ $636͏͏ million͏͏ in͏͏ 2021͏͏ and͏͏ $772͏͏ million͏͏ in͏͏ 2022.͏͏ The͏͏ sector͏͏ faced͏͏ a͏͏ drastic͏͏ decline͏͏ in͏͏ 2023,͏͏ with͏͏ funding͏͏ plummeting͏͏ to͏͏ a͏͏ mere͏͏ $178͏͏ million.
