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Agritech startup WaycoolFoods is in the process of raising $40 million in funding through a rights issue with Lightrock as the anchor investor. The round is seeing high interest from several institutional investors and family offices and is close to being fully subscribed, the company told YourStory on Thursday.

“We intend to close it in the next few weeks. The purpose of this round is to further strengthen our consumer brands’ momentum. This influx of capital will further our efforts in propelling the company’s growth,” the Chennai-based firm said in a statement.

Lightrock—an impact investor that has backed big names like Dunzo, Shiprocket, PharmEasy, and Porter—is one of WayCool’s early investors, which led its $117 million Series D funding round in January last year.

The rights issue is part of a larger funding round which is currently undergoing documentation and “continues to progress at desired pace”, according to the company.

WayCool has raised upwards of $300 million in funding till date from marquee investors such as Trifecta Capital, Stride Ventures, and The Lightsmith Group, among others, as per data from market intelligence firm Tracxn.

Founded in 2015 by Karthik Jayaraman and Sanjay Dasari, WayCool started as a supply chain business for agricultural products. It ventured into the consumer packaged goods space in 2018 through brands such as Madhuram (rice brand sourced from farms), Kitchenji (staples brand), and Freshey’s (ready-to-cook products). 

In April, it introduced an FMCG products line called BrandsNext to expand its portfolio of consumer goods.

WayCool said it restructured the business in the last 18 months to fasttrack its journey towards profitability, and now aims to touch break-even in the beginning of the last quarter of FY24. Its brands including dry groceries and fresh produce have gained significant traction till date and are expected to help achieve break-even in the last quarter, according to the company.

“We are present in over 850 towns in South India, with a dominant market position in many of these geographies. Our commitment to this focus will persist, along with continual efforts to introduce new and innovative products that offer increased value to our consumers,” WayCool noted.

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The development comes as farm-to-fork agritech startups in the Asia-Pacific region garnered a total of $6.5 billion in funding in 2022, marking a significant 58% decline from the record-breaking $15.2 billion raised in 2021.

However, agritech startups closer to the farmer and the supply chain (upstream) saw a 24% year-over-year increase in investments, overtaking consumer-facing companies (downstream) for the first time in years, as per Asia-Pacific AgriFoodTech Investment Report 2023 released in August.

WayCool’s losses widened 2.4 times to Rs 360 crore in FY22 compared to the previous year, while revenue from operations surged to Rs 927 crore in the period.