An Agri-tech startup with $2m in revenues was running dual businesses of Smart farm management and hydroponics based fresh produce business. It had developed a proprietary technology solution including a proprietary SaaS based analytics platform with IoT sensors for smart farm management. It was initially funded by a Family Office
The Problem Statement:
The company approached us to support them in preparing for a Series A fundraise and streamline their financial and valuation strategy. Specifically, the Founders required guidance on financial planning and determining subscription revenue and cost/ CAC drivers and required advisory on monetization plan from the relatively newer subscription business. The company wanted to understand Capital Allocation and business strategy with or without funding scenarios. It was critical for the founders to approach the investors with an ironclad pitch and get funding sooner due to limited cash runway.
What We did:
We conducted deep research on global peers, evaluated financial metrics and built a detailed bottom-up financial model for the SaaS platform business. We then refined the commercial model for smart Agri-tech SaaS platform for enterprise and small-farm customer segments and for subscription plans for fresh produce business. We built scenario analysis models for different product mix to result in optimized contribution margin and profitability metrics.
In order to demonstrate the growth trajectory through lead indicators, we identified KPIs for the SaaS analytics and fresh produce subscription businesses. In order to get data flow right, we implemented a Cloud-based accounting solution using QuickBooks and developed custom BI analytics and reporting solutions. We forecasted the lead indicators such as MRR and ARR for top line growth trajectory. With business growth momentum and costs clearly projected, we benchmarked expected financial performance with peers and cemented the appropriate valuation range for fundraising. To further solidify investor confidence, we created a scenario-wise analysis of expected profitability, capital expenditures and maximum returns on investment presenting the most plausible future outcomes.
How We created an Impact:
Our advisory and strategic financial modelling helped to successfully build an Investment case with lead indicators and valuation justification. Company sought equity bridge round at 2x of previous round of valuation from a Family Office –Series A funding at ~6x previous round in pipeline from a large Agri-focused Conglomerate.