Indian dairy startup Milk Mantra secures US$10m from US development finance institution

INDIA –Milk Mantra, an Indian dairy startup based in Odisha, has secured US$10 million in a structured debt financing agreement from the US International Development Finance Corporation (DFC).

Milk Mantra procures, packages, sells and delivers milk and other dairy products. The company was founded in 2009 and started operations in 2012. Over the years, Milk Mantra has grown its milk sourcing network to over 65,000 farmers and further grown its revenues significantly.

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The company said it has scaled its revenue from US$2 million in 2012-13 to US$32 million in 2019-20, and reaches more than 300, 000 households daily.

Milk Mantra intends to use proceeds from the debt financing round towards expanding capacity, across product lines, in its two existing plants. The company is also in the process of acquiring a new plant asset in Kolkata, as part of its broader inorganic growth plans.

As part of the financing agreement, DFC has also approved US$371,000 in technical assistance to support the company’s agriculture extension services and ethical milk sourcing programme, a report by ETRetail indicates.

DFC said that the main focus of the support would be to build out Milk Mantra’s digital financial services platform for its network of farmers. “This platform will drive financial inclusion for farmers, especially women farmers,” DFC said in a statement.

“At Milk Mantra, we align with DFC’s focus on development impact. We have developed an ethical sourcing model that looks to revitalise rural economies, increase farmers’ yields, and provide farmers, their families, and their communities with growth opportunities while we scale up a mass-premium food brand that’s nourishing the lives of consumer families,” Milk Mantra founder Srikumar Misra said.

The startup works directly with farmers, tests and processes the milk, and then sells it through more than 10,000 mom-and-pop stores in several cities in Odisha.

The company has also deployed IoT products and used data analytics to control quality and pricing, which Misra says has helped farmers increase their income as the startup brings transparency on how much their milk is worth.

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Milk Mantra has raised so far over US$35 million in funding. The company has closed over four funding rounds from investors like Eight Roads (previously Fidelity Growth Partners), Neev Fund, and Aavishkar VC.

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