Milk Mantra raises fund from U.S. International Development Finance Corporation

Bhubaneswar: U.S. International Development Finance Corporation (DFC) has committed a US$10 million loan to Milk Mantra, a new age dairy foods startup in Odisha.

DFC has also approved $371,000 (INR2.8cr) in technical assistance to increase the impact of its loan to Milk Mantra.

The 80 crore investment by the US DFC is the first direct and substantial investment into Odisha.

US DFC as an esteemed organisation finances actionable solutions to developmental challenges across the globe. This investment potentially opens up the opportunity to attract more investment from US DFC into not only Odisha but also other neighbouring states in the east.

With this investment, Milk Mantra has raised nearly 300 crore, which has been invested and will continue to be largely invested into Odisha with a strong focus on empowering the local dairy farming community and creating indirect jobs.

The company has been instrumental in building and motivating a start-up ecosystem in Odisha and this new investment from the US will further support their efforts.

In the past 8 years, Milk Mantra has directly put more than 500crs in the hands of farmers in Odisha via its ethical milk sourcing program.

DFC has also approved technical assistance amounting to $371,000 to support the company’s agriculture extension services and ethical milk sourcing program.

The main focus of this 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.

It may be noted that there are nearly 100 million dairy farmers in India with a significant proportion being women.

Talking about the funding, Srikumar Misra, Founder- Milk Mantra said- “I am excited to bring on board a financial partner like DFC. At Milk Mantra, we align with DFC’s focus on development impact. We have developed an ethical sourcing model that looks to revitalize 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.”

“Startups that are able to reach a stage of sustainable cash flow and EBITDA will have the ability to access not just equity funding, but also different layers of debt funding. In these challenging times, when debt liquidity in India is almost at a freeze, for a premium foods consumer startup like Milk Mantra to raise a substantial debt in the form of external commercial borrowing is note worthy.

This leverage will in fact conversely enable the company to raise large amounts of equity capital to fund its inorganic growth plans further down the line. Milk Mantra has already raised four rounds of capital and has Eight Roads, Aavishkaar and Neev Fund on its cap table. It may be noted that Milk Mantra went on to become India’s first agri-foods startup to be VC funded when it raised its Series A back in 2011,”  added Srikumar Misra.

Ajay Rao, Director of DFC’s Social Enterprise Finance Team, who led this transaction, said, “We have been very impressed by the Milk Mantra team and its efforts to build a socially responsible business that empowers smallholder farmers while strengthening food security. We are excited about our collaboration with Milk Mantra, which will help the company scale up its operations by supporting expanded processing and sourcing capacity.”