Why we invested in ‘Deep Rooted’

Authored by Ashish Wadhwani, Managing Partner, IvyCap Ventures

Market:
Consumers today are increasingly more aware and watchful of their health and well-being. Maintaining health is an important priority for a growing segment of consumers. As consumers make this transition to a healthier lifestyle, the quality of food, and therefore, the quality of fruits and vegetables (F&V), which they consume becomes a critical ingredient to the success of their health and wellness goals. We believe that as awareness grows and incomes grow, the market for high-quality food will grow multifold in the coming decade. Climate, geopolitics, and the global trend towards organic will further accelerate the demand for fresh, healthy, and clean food.

Problem:
Consumers today face multiple challenges in procuring high-quality F&V across both offline and online channels. Offline sellers, such as kiranas and local vendors, lack consistency in quality and offer limited options with high uncertainty around the availability of key SKUs.
General and Modern Trade outlets, similar to grocery-focused e-retailers, lack a dedicated focus on perishables, leading to lower-quality options with stock-outs and slower supply chains, with multiple products taking 72+ hours from harvest to home. In addition, the supply chain from farm to retail is highly fragmented and broken resulting in wastage, higher cost, and poor quality. There are also very few fragmented brands that have been able to scale in this space.

Reports indicate that only $0.7B of the $50B Indian F&V market is currently digitized, offering market participants a large market opportunity that is deeply under-penetrated. The evolving consumer behaviour towards online shopping and the awareness of health and wellness combined make this an attractive point in time to capture the opportunity and lead the transformation.

Why we invested in Deep Rooted (Company)?
Deep Rooted (Company) has been established to make clean eating and healthy living easy and accessible through fresh, clean, and contamination-free produce. The company, with its current operations in Bangalore, Hyderabad, and Chennai, aims to build a national trustworthy brand choice of F&V for consumers. Deep Rooted has accomplished this
position by successfully integrating the F&V supply chain, disintermediating the wholesalers and retailers, and establishing strong touchpoints with both farmers and end-consumers. The founders bring a unique blend of experience including farming, supply chain, operations, and technology which are critical to building a business of this kind.

Unique Business Model:
Deep Rooted, through its mobile application, allows consumers to purchase fresh produce across 200+ SKUs and provides same-day doorstep delivery. The company, through its ‘Deep Rooted’ brand, is focused on building a reliable brand that delivers fresh high-quality products consistently across a wide variety of SKUs. In addition to serving end
consumers, Deep Rooted has successfully developed trust with a growing network of farmers in Southern parts of India. Through its agronomy expertise, the company can solve some of the key problems faced by farmers, namely ‘what to grow?’, ‘How to grow?’, and ‘How to sell?’. The agronomy team at Deep Rooted, through the advent of technology, can
help farmers identify the right crops to be grown and provide real-time guidance on how to grow and nurture each crop until harvest. To tie the knot, Deep Rooted also provides a visible path for farmers to sell their entire harvest directly to the company at competitive, and in many cases favorable, prices.

Passionate Founders with a strong vision:
The team at Deep Rooted is led by a highly motivated and committed founding team that includes Avinash B R, Gururaj Rao, and Arvind Murali, who bring complementary skills and depth of experience across sales, strategy, and managing complex operations. IvyCap Ventures led the $12.5M Series A investment in the company in September 2022 and saw participation from the company’s key existing investors including Accel, Omnivore, and Mayfield. IvyCap Ventures is excited to partner with the team at Deep Rooted in their journey of becoming India’s leading brand of high-quality F&V, with a farm-to-fork supply chain.