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Fariq Naushad and Previn Jacob Varghese
100Unicorns-backed Agritech startup Greenikk is shutting down operations as informed by the company on Monday. The cofounder and CEO of the startup, Fariq Naushad said that loan defaults by borrowers were one of the major reasons to wind up operations.
The Agritech startup raised around $1 million in total capital from 100Unicorns, IIM A ventures, Mastermind Capital, Smart Sparks, and angel investors such as Mayank Tiwari of ReshaMandi.
Reasons behind shutting down the operations
In an official statement Fariq Naushad said: “We picked up capital during 2022 times when low-interest capital was available and while agri tech was at its peak, we chased the wrong metrics to grow and scale up. The industry dynamics changed making it difficult to raise the next round of Series A round which was planned to be $5 Million.”
Naushad elaborated on the challenges of defaults in the Agritech sector. “Stakeholders are not paying back the loans, we extended loans worth Rs 6 crore for which we faced defaults. Huge receivables were stuck from certain clients as they resisted paying after reaching a significant amount. We spend almost 6 months on the ground to collect 80% of the receivables.”
Cofounder Previn Jacob Varghese wrote on LinkedIn today: “It’s been one hell of a journey, and today marks the end of Greenikk, After 3 years of chasing a dream, we’ve made the difficult decision to close down the company. Our vision was bold, but the model didn’t scale the way we had hoped. The challenges of agriculture and securing funding were tough. As a leader, I take full responsibility for the outcomes we couldn’t achieve, but I’m proud of what we did accomplish.”
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Agritech startup Greenikk
Founded in 2020 by Fariq Naushad and Previn Jacob Varghese, the banana cultivation-focused startup was building a digital ecosystem around banana cultivation. It targeted solving the problems of the entire banana value chain from farmers, processing units, and commission agents to bulk B2B buyers and fiber buyers through its full-stack solution.
Greenikk Sustainable Ventures PVT Ltd. will return 50% of the capital to investors. The funds recovered from liquidation will be utilized to return the capital to its lead investor 100Unicorns. The founders would pay the angel investors.
The startup had 30 employees at its peak in October 2023. It has been reducing its employee base since then. The company has assured of providing a 2-month severance and job offers via reference to almost 25 employees.
Meanwhile, the founders Naushad and Previn Jacob would search for a different project to continue their entrepreneurial journey.
Defaults and collections have become a significant challenge in the Agritech sector.
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The farewell post
Naushad’s social media post has attained a lot of attention. In a long post, the entrepreneur shared their decision to “wind down the company”, and the reasons behind it and also thanked all the investors on the way.