US International Development Finance Corporation (DFC) has extended a 100 per cent guarantee to WayCool Foods’ latest round of fund raise of US$5.5 million through debt financing from IndusInd Bank Limited. It follows the Series C round of US$32 million led by Lightbox earlier this year. Setuka Partners LLP was the advisor to the current transaction.
The loan is to be deployed through the bank’s Impact Investing division, which will support the company’s expansion plans. The company plans to use the funds to introduce advanced technology, implement strict hygiene measures, and increase transportation efficiency to reduce food spoilage and improve farmer yields, thus contributing to food security. This will also allow the company to strengthen food distribution across South India.
Karthik Jayaraman, co-founder and CEO, WayCool Foods, said, “WayCool has been steadily building necessary technology and operational capabilities to operate robust agrifood supply chains from soil to sale. We welcome DFC and IndusIndBank as partners in this journey and believe that this partnership is an endorsement of WayCool’s ability to lead transformation within the sector.” DFC, America’s development bank, provides financing to address critical challenges across emerging markets globally. The investment in the company demonstrates DFC’s commitment to supporting India’s food and agriculture distribution sector. The investment has been finalised after a stringent due diligence process.
Ajay Rao, director, social enterprise finance team, DFC, said, “We are proud to work together with the remarkable team at WayCool to solve some of the most pressing challenges in India’s agricultural sector. We look forward to this collaboration during these critical times and are thrilled to support WayCool’s efforts to enhance food security in India.”
IndusInd Bank said in a statement, “The loan is deployed through IndusInd Bank’s Impact Investing Group. The DFC guarantee enabled the bank to provide an equivalent of Rs 35 crore loan to WayCool. The structure is significant as it helps in mobilising local capital for WayCool, also it eliminates foreign exchange rate fluctuation risk from the balance sheet of WayCool.”
The company procures, processes, and distributes a range of food products including fresh produce, staples, and dairy products, moving over 250 tonne of food every day to 8,000 enterprise clients across South India. The company operates a soil-to-sale model, engaging deeply with a base of 40,000 farmers in more than 50 regions across India, while bringing efficiency through its direct supply chain model.
The company plans to accelerate profitability and improve on its capital efficient model by continuing to invest in technology and automation across the value chain. WayCool has previously raised three rounds of funding from Lightbox, LGT Lightstone Aspada, FMO, Caspian Impact Investment, and Northern Arc Capital Limited.