Our investment in Growcoms

We are pleased to announce that JSW Ventures has invested $1.5 mn in Growcoms. The company has raised a total round size of $3.5 mn for bolstering their product portfolio and technology stack to build out key capabilities. Growcoms Pvt Ltd is a managed marketplace for the spices vertical enabling supply side integrations and leveraging existing idle manufacturing capabilities to drive complete control on quality inspection, product development and traceability for enabling exports. Apart from sourcing and trading whole spices, they are also present across other transformative segments like powders, oils & oleoresins and seasonings.?

We are excited to partner with George Kurian Kannanthanam , Bibin Mathews , Narendranath P and their team as they aim to organize and consolidate the spices value chain.

India plays a major role in the global spices industry. We are the largest producer of spices in the world and naturally responsible for almost a third of all global trade. To further reiterate our dominance, India holds a 70% share in global spice production and our overall industry is growing at a 10% CAGR, currently valued at $16.8 bn. We are also responsible for one-third of all exports that happen in this sector. While we have such prowess in production, to really unlock value, a lot has to be done at the backend to ensure our operability as a major global player. This is directly related to sustainable sourcing and ensuring traceability practices to promote trust and quality standards that the developed world demands.?

The above thesis is further brought to the forefront by the existing problem statements faced by all the participants in this value chain:

• For farmers, the Company solves for lack of market choices, low price realization as well as a lack of awareness in best farming practices.
• For processors, they solve for lack of market reach and product development experience, accessibility to quality raw materials, and overall underutilization of processing capacity.
• For customers, problem statements like unpredictability and inconsistency of quality, lack of supplier choices, unpredictable TATs, and an overall lack of traceability across the production chain.

At JSW Ventures , we have been actively looking at AgriTech startups that are not only enabling pure play buying and selling, but have also carved out a long-term moat by either adding a layer of value-add or building out sustainability solutions at scale. Their mission to revolutionise the spices industry by enhancing quality, traceability, and sustainability uniquely addresses challenges across the value chain.

There is also a strong consensus with governments to drive the above transformation for the industry. In India, the Ministry of Commerce and Spice Board of India have stressed on digitized essential compliances for enabling exports and spice house certificates as a mark of adherence to worldwide standards. For international markets, the EU recently rolled out its directive on corporate sustainability due diligence aimed at promoting business relationships with players leveraging sustainable practices.

Quality of sourcing determines the consistency in flavor profile of the final output, making sustainable sourcing and traceability an integral part of the value chain. Branded spices players lay an emphasis on sustainable sourcing and this passes onto the unorganized players as well. Derivatives like oils and oleoresins go with active ingredients, making sourcing critical for consistency and quality of the flavor profile. The Company has built a tech platform called Agrilin, with the sole aim to promote sustainability and transparency across the value chain.

The shift is already happening and large players want to dip their feet into this large opportunity. In the recent past, this space has seen a lot of M&A activity on the B2C side with many high-profile acquisitions from MNCs like Dabur, ITC etc. Other big players like Firmenich (the largest fragrance and taste company in the world) acquired VKL seasonings recently and Orkla (an International conglomerate), took over the Eastern Spices portfolio, further highlighting the accelerating interest across this segment.

The first time we met Growcoms was in June, 2022. We were impressed by what they were building and have been amazed by how much the company has been able to accomplish in such a short amount of time. Today, they have sourcing hubs across all the major spices producing regions, vetted suppliers for carrying out transformation work as well as demand from both the domestic and international markets. They cater to a variety of customer profiles across food companies, flavor houses, masala manufacturers and seasoning companies. Their focus on quality of revenues is another factor that greatly impressed us. Their vast experience and association further have enabled an impressive GTM and a clear path to scale in a sustainable manner.

Team

George and Bibin bring a wealth of experience in the spices industry across product categories and markets. They have been thought leaders in this segment and were early team members at large players in this space, managing international markets, handling overall supply chain, and played an instrumental role in SKU/ product development.

Prior to founding Growcoms, George held multiple roles at Synthite, Tata Coffee and ITC. Bibin has also been associated with the largest players in this space, having worked at VKL Spices, Jayanti and ITC across various leadership roles.?

The Indian spices market is continuously maturing, with 41% now forming a part of the organized sector. The overall spices market is expected to be valued at $27 bn in 2027 and we believe Growcoms will be at the forefront of this organization to ensure that sustainable sourcing and traceability become an integral part of the existing spices value chain.

We’re excited to be a partner in Growcoms’ journey. If you would like to learn more about what they are building for the spices industry, I am more than happy to spend time on a call.

Feel free to send me an email at [email protected].