Case Studies

We have strengthened the vision of many businesses, with a singular goal of providing informed business solutions and strategies.

As an agri-tech company, our client’s objective is to aggregate and economically source farm supplies for B2B buyers.

The business model involves reducing inefficiencies in the fragmented food supply chain by enabling select farmers (farmer franchisees) with equipment to process their produce, thereby providing direct market access and logistical support through a technology platform.

THE QUEST FOR SEED MONEY

After successfully setting up an agri-business centre, which helped the client gain traction in the market, they found themselves at a crucial juncture. Right now, fresh capital was required to build on their previous success and to scale the company to a Rs. 500 cr enterprise. The company approached AND to help with the end-to-end fundraising exercise – right from preparation of investor pitch decks to negotiation of term sheets.

FARM TO FINANCIAL MODELS

After a comprehensive understanding of the requirements, AND engaged with the client to help raise equity financing with the following:

  • Educating the founders about the nature and policies of Venture Capital (VC) investors
  • Pivoting the business model from an asset-heavy agri business centre approach to an asset-light farmer franchisee approach
  • Breaking down the business model into crucial components and helping the client in prioritizing the implementation of critical elements
  • Assisting the client in signing MOUs with 4 state governments and successfully pitching at international events
  • Preparation of Project Report and CMA data for lenders
  • Approaching and coordinating with banks for debt syndication
  • Preparation of detailed Info Memo (IM) and financial model for equity investors
  • Conducting initial discussions and deal structuring with potential investors
  • Drafting, negotiation and finalization of term sheet

With our assistance, the client was able to close an angel round funding of Rs. 3 cr and was able to expand their presence with 10 farmer franchisees across 5 districts. The client now supplies to about 50+ B2B buyers. Today, AND is assisting the company in closing its Series A round of funding.

A successful microbrewery operating in Bangalore and Hyderabad since 2012, our client acknowledged the rise of the bottled craft beer sales in India. Simply put, craft beer is a beer that is not brewed by one of the big “mega-brewery” corporations, and has a distinctive flavour & taste that caters to discerning beer drinkers.

The client’s objective was now to enter the market as a means to diversify the brand in the competitive market.

THE BOTTLENECK

The manufacture and sale of alcohol in India is heavily regulated with taxes & duties adding up to 70-80% of the final cost of the bottle. Moreover, policies and rates fluctuate wildly between different states making it a difficult for businesses to comprehend the same and make an effective entry in the market.

From a comprehensive understanding of the regulatory regime for the manufacture & sale of alcohol, we at AND provided the client reasonable estimate of how much taxes & duties would add to the final cost to consumer.

In addition, they wanted to understand the financial implications of the 3 alternatives: (i) Make in India with own manufacturing unit, (ii) Make in India with 3rd party manufacturer, or (iii) Import into India.

A SPIRITED ENDING

With the given challenges and understanding the needs and strategy of the client, AND carried out the following activities to help understand the problems faced:

  • Primary & secondary research to understand the tax and licensing regimes in 4 states in South India (the client’s preferred manufacturing location)
  • Financial analysis for the 3 alternatives proposed by Client
  • Discussions with contract manufacturers in the target states, to understand spare capacity available with existing breweries

With our evaluations, the client was able to (a) understand the regulatory prerequisites of setting up a unit, (b) select a suitable alternative based on its financial viability and (c) commence discussions with a suitable JV partner among the existing breweries.

In 2016, we were approached by a start-up in the health / organic / natural packaged food segment. Having developed a sizable portfolio of products, the client was looking for funding to scale up production, and step-up marketing & distribution.

STARTING WITH SOME TILLAGE

Our client’s strength lay in product development but she sought close guidance in the commercial & financial aspects of the business, as well as reaching out to angel investors for the first formal round of funding. With a requirement for formal documentation to approach investors, the client also needed support in negotiating the term sheet and definitive documentation with the potential investor.

TIME TO REAP

  • AND was able to assess the strengths of the client and carried out the following activities to help them raise angel financing:
  • Evaluating the client’s strengths and gaps and recommended that she would benefit from a strategic investor
  • Preparation of a detailed pitch deck and financial model for equity investors
  • Identifying the fund requirement and the fund utilization plan
  • Reaching out to angel and strategic investors in our network
  • Conducting initial discussions and deal structuring with potential investors
  • Drafting, negotiation and finalization of term sheet
  • Drafting, negotiation and finalization of Share Purchase and Shareholder Agreement

With our assistance, the client was able to close the angel round funding of Rs. 3 cr and was able to successfully re-launch the brand and its range of products. Today, it is a successful health / organic / natural food company with 3 well-known brands. Its range of 25+ products are available on Amazon, Big Basket and other leading supermarkets and stores across India.