Chennai-based agricultural supply chain firm Waycool has secured Rs 100 crore (approximately $12 million) in debt financing from Grand Anicut, marking the first major funding boost for the company in two years. According to regulatory filings accessed through the Registrar of Companies (RoC), the board approved the issuance of 1,000 Series B6 debentures at an issue price of Rs 10,00,000 each.

The debt comes with an 18% annual interest rate and a tenure of 18 months. Waycool plans to channel these funds toward its ongoing business operations as it navigates challenges in securing equity funding.

Funding and Growth Amid Challenges

Founded by Karthik Jayaraman and Sanjay Dasari, Waycool operates at the intersection of agriculture and retail, procuring fresh produce—including dairy—from farmers and distributing it to retailers and restaurants. The company also manages private-label brands and provides distribution services for fast-moving consumer goods (FMCG) companies.

To date, Waycool has raised about $160 million from investors such as Lightrock, the International Finance Corporation (IFC), FMO, and 57 Stars. It was reportedly in negotiations to raise an additional $50 million, which could have pushed its valuation to between $900 million and $1 billion. However, these talks did not come to fruition, and the company remains valued at $700 million as of its last equity round.

Waycool laid off 200 employees earlier this year to streamline costs and move toward profitability. The company had been aiming to achieve profitability by July 2024. Despite its operational efforts, the company recorded a 62% growth in operating revenue to Rs 1,251 crore in FY23, but losses surged by 89% to Rs 685 crore in the same period.

Agritech’s Funding Crunch

Waycool’s recent debt raise underscores the growing challenge for agritech startups in securing equity financing. Alongside Dehaat and Ninjacart, Waycool has been on the verge of achieving unicorn status for the past few years, but the sector has yet to produce its first unicorn.

The funding landscape for agritech firms has tightened significantly, with debt becoming a more accessible option compared to equity. The closure of agritech firm Greenikk earlier this week further highlights the operational difficulties facing the sector.

Waycool’s ability to secure debt financing in this climate is a positive step. Still, it also reflects the ongoing struggles of agritech startups to attract equity investment and sustain growth while managing profitability.