This Entrepreneur Raised $275 Million To Build An Agritech Platform To Streamline India’s Agricultural Ecosystem

In the startup ecosystem, building a company from the ground up without extensive capital is an impressive feat, as Anand Chandra has demonstrated. But building one in agriculture—a sector with deeply embedded challenges—is a story of grit, vision, and tenacity.

Anand, the co-founder of Arya Collateral, exemplifies this journey, taking a small, almost unknown company and transforming it into a tech-enabled agri-storage and finance powerhouse serving thousands.

Anand demonstrates the power of considering customer needs and the competition, recognizing a problem as meaningful enough to be solved, and solving it. In a recent conversation, he shared insights into the unique funding strategy that has raised over $275M.

Listen to the full podcast episode and review the transcript here.

A Dream Rooted in Purpose

Born in India, Anand originally had ambitions to study in the U.S., but the prospect of opportunities in India persuaded him to stay. He was drawn not just to technology but to agriculture—a sector often overlooked yet foundational to every society.

“Agriculture,” Anand says, “is a sector that will never cease to be essential. People need food, and that’s what makes agriculture a stable and demanding sector.” The combination of agriculture and science was more alluring than the general societal pressure to become a doctor or engineer.

As Anand points out, India has 16 agroclimatic zones with the potential to produce anything and everything, which opens up various challenges that need to be addressed. These hurdles require a lot of courage to surmount, which fascinated him.

Valuable Lessons Learned at ICICI

From his early career at ICICI Bank, Anand began carving out a path, quickly ascending the ranks to become a regional sales manager and then a product head in nine years. Working at ICICI gave him invaluable exposure to corporate structure, team building, culture, and decision-making.

Anand credits these experiences as foundational to Arya’s success. He recalls working closely with senior leaders, noting, “It was an incredible learning experience. I had the chance to experiment, make decisions, and work directly with some of the top minds in the organization.”

Many of the business aspects at Arya that have been painstakingly developed over the last 12+ years are a direct result of the lessons he learned at ICICI Bank. During his tenure, he was exposed to an organization with around 45,000 employees.

Among the leaders he worked with, Anand was particularly motivated by Madhabi Puri Buch, the current chairperson at SEBI, who was one of the directors at ICICI Bank then. From her, he learned that when creating a process, you must get into the details and be clear on the objectives.

Madhabi Puri Buch also stressed efficient time management and understanding customer needs. Anand learned about identifying the product-segment fit and expanding to different geographical locations.

The Spark That Ignited Arya Collateral

In 2009, Anand and two colleagues considered purchasing a company that could enable them to enter the agri-finance sector. The deal fell through due to high valuation demands, but the idea never left them. By 2012, a new opportunity arose: a company called Arya Collateral.

Arya Collateral had established some roots but was underutilized. Anand and his partners, Prasanna Rao and Chattanathan Devarajan, saw potential and negotiated a majority stake in Arya, establishing it as an independent company and allowing them to begin implementing their vision.

Anand recalls meeting with Mr. Krishna Bhai Kota, the Chairman who entrusted them with a 65% stake in the company. He retained the remaining 35%. The deal was clinched with signing a shareholder agreement but without any valuation.

The only question asked was how much the co-founders could invest in the company. Starting without substantial capital, Anand and his co-founders made significant sacrifices to keep the venture going. He recalls being extra cautious since a single wrong move could have been lethal.

The founders commuted by train to Mumbai to save money, sleeping on the office sofa to cut accommodation costs. “We saved every penny,” Anand recalls, “and didn’t have the luxury of burning through cash.”

This dedication to frugality and lean processes would shape Arya’s foundational principles, ingraining resilience and efficiency at its core.

Cracking the Agri-Storage Market

To succeed in agri-storage and financing, Anand knew Arya Collateral needed to be more than a typical storage company. As Anand points out, traditional banks work in the tertiary markets, but the primary and secondary markets are more crucial and need to be served.

Arya Collateral’s business model is unique. It focuses on serving the granular needs of India’s farming sector by establishing small, strategic warehouses close to production sites, particularly in underdeveloped regions where the tonnage and funding amounts are low.

One of their most successful expansions has been in Bihar, a state previously underserved due to perceived risks and lack of competition. The company’s model has become a bridge for farmers, giving them control over “when to sell” and “whom to sell to.”

Arya’s small storage solutions allow farmers to store commodities, access loans to manage cash flow and their expenses, and hold produce until they can secure a better price. The underlying challenge was for the solutions to be viable despite the smaller storage needs.

Through technology and a network of smaller warehouses, Arya has created an ecosystem where farmers in even remote regions can participate in the broader market.

“We realized that if we could work closer to the primary production centers, we could address a critical gap,” Anand explains. “Farmers need the freedom to choose when and where to sell, but without storage, finance, and market access, they’re limited.”

Identifying and Tackling Challenges

Anand explains how they started working with large corporates, offering them access to smaller locations that were previously unknown. These corporates were given the opportunity to purchase commodities.

At the time, people were hesitant to do business, so Anand and his team’s solution was to buy the corporates to gain visibility and trust from smaller farmers.

Next, they built a cluster-based model, which helped them work in smaller warehouses and calculate the unit economics to stay profitable in storage. However, Anand realized that it was not feasible for banks to invest in smaller transactions.

As a solution to the problem, in 2017, Arya approached the RBI and acquired a license for an NBFC or non-banking financial institution. This strategy helped them do small-ticket lending. The next challenge they solved was access to the markets.

Arya Collateral effectively connects corporates with depositors for selling their produce, giving them access to a large number of buyers with whom they can negotiate a better price. This facility also eliminates the dependence on Aditya or traders located in the mandi.

Building the Right Technology from Day One

One of Arya’s strengths has been its early investment in technology, which Anand describes as essential for scaling efficiently. The focus on automation allowed Arya to reduce reliance on manpower, bringing down costs and streamlining processes.

Today, Arya can disburse loans in under five minutes, a testament to the efficiency of their tech infrastructure. “We knew that without a strong tech backbone, our manpower costs would skyrocket,” Anand explains.

“Today, we have one of the most robust tech systems in the agri-finance space, allowing us to disburse loans quickly and manage inventory with precision.”

Overcoming Funding Hurdles

Despite having an innovative model and a growing footprint, Arya’s journey to raise capital wasn’t without challenges. Anand and his partners found that investors often showed bias toward founders from prestigious institutions like IIT and IIM.

With backgrounds from the Institute of Rural Management Anand (IRMA) and the National Institute of Agricultural Extension Management (MANAGE), Anand and his team initially struggled to gain the same level of investor confidence as their peers from more recognized schools.

Yet, the resilience built into their business model paid off during the “funding winter” that began in the last two years. While other agri-tech startups struggled, Arya stood out for its profitability and disciplined financial management.

They hadn’t burned through capital recklessly, a strategy that Anand says was critical to their survival during challenging times.

Anand emphasizes, “From day one, we didn’t compromise on profitability. While others focused on growth at any cost, we focused on sustainable growth. That approach has become a differentiator now.”

Strategic Use of Debt vs. Equity

Arya Collateral’s funding journey is notable for its reliance on a balanced debt and equity strategy. Drawing on his banking background, Anand has always preferred leveraging debt over dilutive equity raises.

The co-founders strongly believed that equity costs are always higher, considering the dilutions owners must take to promote wealth creation for investors.

“Debt is always a better option if you can get it at a reasonable cost,” he says. “We always ensured our financial statements were in excellent shape to attract lenders. We understand how lenders evaluate risk, and we made sure our books would meet their standards and compliances.”

Their careful management of financial ratios has allowed Arya to secure competitive debt terms, with a current debt-to-equity ratio of 3:1. This approach has helped them avoid excessive dilution, retaining control while fueling growth.

Today, Arya has raised over $100M in equity and $175M in debt commitments. Other notable recent investments include the U.S. DFC and a UK-based guarantee from HSBC.

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The Arya Vision

Talking about his vision for Arya Collateeral, Anand sees a world where RDI is the green operating system in India with the potential to expand globally. Arya is not just an agritech platform but a green operating system that digitizes every green.

Anand underscores the importance of understanding customer needs and knowing how to address them. He cites an example of an Indian airline company that is notorious for its mediocre customer service but still manages to have the largest customer base.

The airline’s success results from low-cost operations and a focus on profitability. It has used tech at even the smallest step to ensure that flights take off and land on time. It has identified the turnaround time as the customer magnet.

At Arya, Anand and his team focus on delivering funds to farmers in the shortest time to reduce their dependence on moneylenders. At present, the traditional banking lending rate in India is 10%. However, Arya’s rate is around 13%, and the unorganized sector’s is 18%.

Arya’s Success Drivers

Arya’s success is driven by quick turnaround times, identifying customer needs, and giving them access to customers who are buying commodities at credit. Its platform bridges the finance gap by acting as an underwriter.

Arya assures the buyer of high quality since the goods are safely secured in the warehouse. It also reassures farmers by giving them access to the entire set of customers who can purchase their harvest.

Anand explains that common misconceptions are that India sees significant post-harvest losses and that supply chains are fragmented. The reality is that, though fragmented, supply chains are not inefficient. They only lack transparency between the small and marginal farmers and buyers.

Farmers have a huge consumer base that is highly price-sensitive. Arya does not intend to compete with existing mechanisms or disrupt the market. Its objective is to set up a parallel channel that offers transparency and quick access to finance for the participants.

Milestones and Moving Forward

Despite the challenges, Anand’s commitment to lean operations, profitability, and tech-first processes has positioned Arya as India’s leading agri-tech solution provider. His journey embodies the spirit of entrepreneurship with a purpose.

Building a company in agriculture in India was no easy task, but by focusing on fundamental needs and leveraging tech, Arya has not only scaled but thrived. Anand’s story about resilience, innovative thinking, and dedication to the agricultural sector—a field he saw as stable, essential, and full of potential.

Listen to the full podcast episode to know more, including:

• Anand chose agriculture because of its enduring necessity, stable demand, and untapped potential in India’s diverse agroclimatic zones.
• His time at ICICI Bank taught him invaluable lessons in decision-making, customer focus, and process-building, which he later applied to his own venture.
• Arya Collateral targeted untapped primary and secondary markets, establishing a unique model in rural India by providing storage, financing, and market access for farmers.
• Starting with limited capital, Anand and his co-founders minimized costs and leaned on technology to build efficient, scalable processes from day one.
• Unlike many tech startups, Arya prioritized profitability and sustainability, which shielded it during the funding slowdown and COVID challenges.
• Anand strategically balanced debt and equity, leveraging his banking background to secure lower-cost financing while minimizing equity dilution.
• Arya’s strict adherence to financial compliance and sound fiscal management has built lender trust, supporting its growth trajectory.

 

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