DFC has also approved USD 3,71,000 (about Rs 2.8 crore) in technical assistance to support the company's agriculture extension services and ethical milk sourcing programme, according to a statement.
Dairy foods company Milk Mantra on Friday said US International Development Finance Corporation (DFC) has committed USD 10 million (over Rs 76 crore) for structured debt financing to the company. DFC has also approved USD 3,71,000 (about Rs 2.8 crore) in technical assistance to support the company’s agriculture extension services and ethical milk sourcing programme, according to a statement.
“The main focus of this would be to build out Milk Mantra’s digital financial services platform for its network of farmers. This platform will drive financial inclusion for farmers, especially women farmers,” it added. There are nearly 100 million dairy farmers in India with a significant proportion being women.
The company was founded in August 2009 by the former director of Tetley, Srikumar Misra, along with Rashima Misra and started operations in 2012. Its milk sourcing network has grown to over 60,000 farmers. The company said it has scaled its revenue from USD 2 million in 2012-13 to USD 32 million in 2019-20, and reaches more than 3 lakh households daily. The company operates in Odisha, West Bengal and Jharkhand.
Milk Mantra has raised USD 25 million in venture capital funding over four rounds from investors like Eight Roads (previously Fidelity Growth Partners), Neev Fund, and Aavishkar VC.
“At Milk Mantra, we align with DFC’s focus on development impact. We have developed an ethical sourcing model that looks to revitalise rural economies, increase farmers’ yields, and provide farmers, their families, and their communities with growth opportunities while we scale up a mass-premium food brand that’s nourishing the lives of consumer families,” Milk Mantra founder Srikumar Misra said.
Start-ups that are able to reach a stage of sustainable cash flow and EBITDA (earnings before interest, tax, depreciation and amortisation) will have the ability to access not just equity funding, but also different layers of debt funding, Misra added.
“In these challenging times when debt liquidity in India is almost at a freeze, for a premium foods consumer start-up like Milk Mantra, to raise a substantial debt in the form of external commercial borrowing is noteworthy. This leverage will in fact conversely enable the company to raise large amounts of equity capital to fund its inorganic growth plans further down the line,” Misra said.
Setuka Partners LLP based out of Washington DC, led by Aman Khanna, was the exclusive advisor to this transaction.
India’s organised milk market is slated to reach USD 10 billion by 2025, and private dairies are expected to play a central role.