Agri Venture

Venture Funding Opportunities in Agriculture Sector
March 10, 2011
1|
TABLE OF CONTENTS
Omnivore Capital Overview
Agriculture in India Why Ag-Tech?
Investment Strategy Omnivore Team

Strategic Advisor: Godrej Fund Terms
Contacts
2|
OMNIVORE CAPITAL OVERVIEW

Omnivore Capital is an early stage venture capital fund investing in
agricultural technology (ag-tech) startups in India planned fund size of Rs 250 crore
investing primarily in Series A and Series B rounds select few Seed investments
Focused on entrepreneurs and scientists who are innovating solutions to improve agricultural productivity and sustainability Godrej, one of Indias oldest and most trusted business conglomerates,
is the Strategic Advisor to Omnivore Capital
3|
GLOBAL FOOD SYSTEM UNDER SEVERE STRESS
4|
Source: FAO
RUNAWAY FOOD PRICE INFLATION ALSO HITTING INDIA

Government of India: Wholesale Price Index (WPI), April 2006 = 100
260 240 220 200 180 160 140 120 100 80 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Cereals Pulses Vegetables Milk Eggs, Meat, Fish
5 | Source: Office of the Economic Adviser, Government of India
SNAPSHOT OF INDIAS AGRICULTURAL ECONOMY

68% of Indian population linked to agriculture Agriculture represents 17.2% of Indias GDP
Average farm size ~1.4 hectares
Largest producer of milk globally Among the top five producers worldwide of rice, wheat, oilseeds, sugar, groundnuts, tea, coffee, and spices
Second largest producer of fruits and vegetables globally
6|
INDIAS RURAL INCOMES RISING, POVERTY FALLING

Indias rural poor (millions)
700 600 500 400 300 200 100 0 1985 1995 2005 2015E 2025E 548 614 514 403 263
Rural poor defined as those with annual HH income of <Rs 90,000
% of rural population
96%
90%
65%
46%
29%
7 | Source: MDI India consumer report
AS INCOMES RISE, FOOD CONSUMPTION WILL JUMP

Aggregate rural consumption of food products, Rs billion (FY2000)
4.5%
2.4x
17,296
3.0%
5,622 7,147
11,547
3,931
1985
1995
2005
2015E
2025E
8 | Source: MDI India consumer report
WEAK AGRI GROWTH THREATENS FOOD SECURITY

Indian agricultural GDP growth, % y-o-y
12% 10% 8% 6% 4% 2% 0% -2% FY95 -4% -6% -8%

9 | Source: CMIE
FY97
FY99
FY01
FY03
FY05
FY07
FY09
FY11E
Drought years
SHRINKING FARMLAND HOLDINGS BECOMING UNVIABLE

Average size of farm land holdings in India (hectares)
3.0 2.5 2.0 1.5 1.0 0.5 0.0 1961 1971 1981 1991 2002
2.7 2.3 1.8 1.6 1.4
10 |Source: www.agricoop.nic.in
INVESTMENTS IN AGRI SECTOR HAVE RAMPED UP

Gross capital formation, % of Agri GDP (nominal)
16% 14% 12% 10% 8% 6% 4% 2% 0% 1995 1997 1999 2001 2003 2005 2007
2x
11 |Source: B&K Research
BUT INDIAN AGRI YIELDS STILL TERRIBLY LOW

Maize yield (MT/hectare)
10 9 8 7 6 5 4 3 2 1 0 USA Argentina China Brazil Indonesia India 6.5 5.6 4.1 4.1 2.4 9.7
Pulse yield (MT/hectare)

2.5
1.5
2.0 1.8 1.6 1.1 0.9 0.6
0.5
0 Canada USA China Myanmar Brazil India
Paddy yield (MT/hectare)

7 6 5 4 3 2 1 0 China Viet Nam Indonesia Bangladesh India 6.6 5.2 4.9 4.0 3.4
Soybean yield (MT/hectare)

3 2.5 2 1.5 1 1.7 0.5 0 Argentina Brazil Canada USA Paraguay China India 1.0
2.8
2.8
2.8
2.7
2.6
12 | Source: FAO
INDIA HISTORICALLY UNDER-INVESTED IN AGRI R&D

R&D intensity (R&D spend as % of Agri GDP)
4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% India China Brazil USA Japan 0.3% 0.4% 1.8% 2.7%
3.6%
13 | Source: Pray and Basant, 2001, IFPRI research report
BUT INDIAN FARMERS RAPIDLY ADOPT NEW TECH

Hectares (millions) of cotton in India
12 10 8 6 4 2 0 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 Non-Bt Bt
14 | Source: www.fbae.org
PRIVATE SECTOR AG-TECH CAN DRIVE PRODUCTIVITY

Indian cotton production in million bales (170 kg)
50 years 10 years
Yield (kg/ha)
92
106
267
308
399
478
567
15 | Source: www.cotcorp.gov.in
WHY AG-TECH?
Innovations in agricultural technology are critical to resolve the
productivity and sustainability issues faced by Indian farmers
India has huge ag-tech ecosystem run by public sector, but
currently not commercializing discoveries
India offers large market for startups to scale up innovations for smallholder farmers and rural consumers
16 |
PUBLIC SECTOR DRIVES INDIAS AG-TECH ECOSYSTEM

Funding channels for Agri R&D, FY2000, $ (nominal) Central government Grants to ICAR ($252.4 mn) Externally aided projects ($33.7 mn) AP cess funds ($5.8 mn) Internal resources ($9.2 mn) Other public sources $2.4 mn State governments $277.0 mn Grant to ICAR institutes $210.2 mn ICAR schemes $79.9 mn Competitive grants $10.8 mn State agricultural universities $332.9 mn ICAR institutes $239.2 mn Source: Pray and Basant, 2001, IFPRI research report
Other public R&D institutes $4.4 mn

Business organizations $73.7 mn
Business $69.9 mn
Ag-tech in India overseen by Indian Council of Agricultural Research (ICAR)
public sector organization with ~30,000 researchers across 100+ institutes

State agricultural universities (SAUs) also play critical role in ag-tech R&D
ICAR and SAUs only recently began commercializing ag-tech innovations

Huge opportunity to launch startups, bring great technologies to market
17 |
INVESTMENT STRATEGY: FOCUS AREAS

Early stage ag-tech startups in India
Characteristics of successful venture-backed startups strong team highly scalable, capital-efficient
differentiation based on technology (IP) or business model Which focus areas do we like?
plant science, animal science, aquaculture, sustainable inputs farm equipment, water management, agriculture services farmer finance, bio-fuels, distributed power generation
rural information services, post-harvest infrastructure

18 |
PREPARING FOR FUND RAISE: BASIC REQUIREMENTS

Entrepreneurs to make a Realistic Business Plan
Detailing the next stage and the path to achieve the same Skin in the Game Sharing Ownership and Control
Exit Options for the Investors Alignment of Interests between Entrepreneurs and Investors
Talk to Investors Directly and be Flexible in Approach Fund Raising is a long Process Be Patient
19 |
OMNIVORE TEAM
Atish Babu
Partner
Vice President at Nexus Venture Partners, leading Indian VC firm

Vice President (Corporate Development) at Vonage Investment Analyst with Battery Ventures MBA from Harvard Business School; BS from Massachusetts Institute of Technology
Mark Kahn
Venture Partner
Executive Vice President (Business Development) at Godrej Agrovet

Strategy Manager at Syngenta AG Began career as turnaround consultant with PFM MBA from Harvard Business School (Baker Scholar); BA from Univ. of Pennsylvania Vice President and CFO at Nexus Venture Partners, leading Indian VC firm
Jinesh Shah
Partner/CFO
Finance Manager at Patni Computers; led M&A, IPO activities

Assistant Manager at HCL; helped start BPO business
Chartered Accountant; MBA from JBIMS; B.Com from R A Poddar College
20 |
STRATEGIC ADVISOR & LP: GODREJ

114 years old (established in 1897)
Largely privately owned by Godrej family $3 billion sales turnover 21,000+ employees 100 manufacturing locations in India & abroad
Diversified: 6 focal companies (3 publicly traded) Global operations in 16 countries Godrej touches the lives of 470 million Indians daily
21 |
GODREJ AGROVET IS A DIVERSIFIED AGRIBUSINESS

With ~1900 employees and total FY2009-10 sales of Rs ~1600 crore, Godrej Agrovet Limited (GAVL) has interests in:
Animal Feed
Indias largest commercial feed miller Market leader in cattle, poultry, and aqua feed Bangladesh JV with ACI
Poultry (Godrej Tyson)

Market leader in processed poultry, frozen snacks Partnered with Tyson Foods, the worlds largest meat processor
Oil Palm Plantations

Largest oil palm cultivator in India, with 40,000 hectares Operating in AP, TN, Goa, Orissa, Gujarat, Mizoram, and Karnataka
Agri Inputs
Market leader in plant growth regulators, soil conditioners, cotton herbicides Strong pipeline of innovative products
GAVL Mission: to improve the productivity of Indian farmers by innovating products and services that sustainably increase crop and livestock yields
22 |
GODREJ AGROVET VALUE ADDITION TO OMNIVORE

Due diligence capabilities
evaluation by technical experts
ability to conduct field trials verify investment assumptions with distributors/farmers

Scale up portfolio companies connect startups to distributors, suppliers, customers
help optimize manufacturing/operations

identify talent from agribusiness industry Values driven organization
strong regulatory compliance transparent corporate governance

23 |
THIS PRESENTATION CONTAINS CONFIDENTIAL INFORMATION REGARDING THE BUSINESS AND OPERATIONS OF OMNIVORE CAPITAL AND ITS AFFILIATES AND IS BEING PROVIDED TO RECIPIENTS ON A CONFIDENTIAL BASIS. THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY PURSUANT TO A CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM.
THANK YOU FOR YOUR TIME AND CONSIDERATION
24 |

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Venture Funding Opportunities in Agriculture Sector

March 10, 2011

Investment Strategy Omnivore Team

OMNIVORE CAPITAL OVERVIEW

is the Strategic Advisor to Omnivore Capital

GLOBAL FOOD SYSTEM UNDER SEVERE STRESS

RUNAWAY FOOD PRICE INFLATION ALSO HITTING INDIA

5 | Source: Office of the Economic Adviser, Government of India

SNAPSHOT OF INDIAS AGRICULTURAL ECONOMY

Average farm size ~1.4 hectares

Second largest producer of fruits and vegetables globally

INDIAS RURAL INCOMES RISING, POVERTY FALLING

Rural poor defined as those with annual HH income of <Rs 90,000

7 | Source: MDI India consumer report

AS INCOMES RISE, FOOD CONSUMPTION WILL JUMP

8 | Source: MDI India consumer report

WEAK AGRI GROWTH THREATENS FOOD SECURITY

12% 10% 8% 6% 4% 2% 0% -2% FY95 -4% -6% -8%

SHRINKING FARMLAND HOLDINGS BECOMING UNVIABLE

2.7 2.3 1.8 1.6 1.4

INVESTMENTS IN AGRI SECTOR HAVE RAMPED UP

11 |Source: B&K Research

BUT INDIAN AGRI YIELDS STILL TERRIBLY LOW

Pulse yield (MT/hectare)

2.0 1.8 1.6 1.1 0.9 0.6

0 Canada USA China Myanmar Brazil India

Paddy yield (MT/hectare)

Soybean yield (MT/hectare)

INDIA HISTORICALLY UNDER-INVESTED IN AGRI R&D

13 | Source: Pray and Basant, 2001, IFPRI research report

BUT INDIAN FARMERS RAPIDLY ADOPT NEW TECH

PRIVATE SECTOR AG-TECH CAN DRIVE PRODUCTIVITY

India has huge ag-tech ecosystem run by public sector, but

currently not commercializing discoveries

PUBLIC SECTOR DRIVES INDIAS AG-TECH ECOSYSTEM

Other public R&D institutes $4.4 mn

Ag-tech in India overseen by Indian Council of Agricultural Research (ICAR)

public sector organization with ~30,000 researchers across 100+ institutes

ICAR and SAUs only recently began commercializing ag-tech innovations

INVESTMENT STRATEGY: FOCUS AREAS

rural information services, post-harvest infrastructure

PREPARING FOR FUND RAISE: BASIC REQUIREMENTS

Vice President at Nexus Venture Partners, leading Indian VC firm

Executive Vice President (Business Development) at Godrej Agrovet

Finance Manager at Patni Computers; led M&A, IPO activities

Chartered Accountant; MBA from JBIMS; B.Com from R A Poddar College

STRATEGIC ADVISOR & LP: GODREJ

GODREJ AGROVET IS A DIVERSIFIED AGRIBUSINESS

Poultry (Godrej Tyson)

Oil Palm Plantations

GODREJ AGROVET VALUE ADDITION TO OMNIVORE

ability to conduct field trials verify investment assumptions with distributors/farmers

help optimize manufacturing/operations

strong regulatory compliance transparent corporate governance

THANK YOU FOR YOUR TIME AND CONSIDERATION

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