Omnivore Farm Logs | Why we invested in DGV

How is DGV ensuring the last-mile delivery of digital financial services to dairy farmers?

Founder Ragavan Venkatesan (third from the left) with the DGV team at a milk collection centre.

Easy access to formal financial products and services for all, especially the underserved, is at the core of effective financial inclusion. While India has made great strides in this regard, there is still ample room for improvement, especially in semi-urban and rural India. Spending precious time and money by travelling to brick and mortar bank branches or ATMs to access basic banking services is still the reality outside of metros and big cities.

Why neo-banking for dairy?

India’s dairy industry is the largest in the world, generating USD 145 billion each year, representing a quarter of India’s agri-food sector and 4% of the national GDP. More than 75 million dairy farmers are a part of this sector, and a significant percentage of them lack access to banking and other financial services.

Farmers in cooperatives and dairy unions are paid three times a month. The payment is deposited directly into their accounts which they can withdraw via banks or ATMs. In rural India, both can be time consuming options. Another common scenario is the complete lack of banking services in deep rural areas, leaving farmers reliant on cash payments, which affects the transparency of transactions and fails to build a credit history for farmers.

What is DGV doing differently?

Digivriddhi Technologies (DGV) is the first-ever Indian fintech startup focused on the underbanked dairy industry. In partnership with Federal Bank, DGV is addressing the biggest pain point for rural customers, last-mile delivery. Using the payments architecture created by the National Payments Corporation of India (NPCI), the startup has developed API banking services tailored for dairy farmers.

DGV’s Milk Micro ATMs are multipurpose terminals with the DGVPay interface leveraging the India Stack platform. The startup can progressively offer customers various financial services, including payments, account opening, loans, and insurance. These compact devices are installed at the milk collection centres of the village cooperative societies and are operated by the society secretary. Through this unique model, DGV offers a phygital branchless banking channel to farmers who visit the centre twice a day to sell their milk, making it a highly accessible and trusted point of transaction.

How well is DGV’s approach working?

Dairy giant AMUL was DGV’s first institutional customer. To bring last-mile digital payment infrastructure for its member milk producers, AMUL piloted the micro ATMs in 14 villages of Rajkot district in Gujarat. DGV’s innovative model was instrumental in ensuring uninterrupted payments even through the uncertainties of the pandemic. Having commenced operations in 2019, today DGV is working with 10 dairy unions in Gujarat and has micro ATMs operating at 83 milk collection centres, each serving close to 100 farmers. By effectively solving the issue of access, DGV has quickly become a trusted brand in rural Gujarat.

What about DGV was compelling for Omnivore?

Improving farmers’ access to formal financial services directly translates to greater farmer resilience in the face of any crisis and more scope for economic growth, which are key components of Omnivore’s investment thesis. DGV’s unique model is poised to achieve both at scale by reaching millions of farmers and ensuring world-class financial services.

What’s next for DGV?

DGV intends to use this pre-Series A funding to expand its operations across Gujarat and, eventually, other major dairy clusters in the country. The startup is working on becoming a one-stop solution for transparent financial services customized to the needs of the dairy value chain.

We are thrilled to welcome DGV to the Omnivore portfolio. We look forward to working with DGV in re-imagining financial services for farmers and revolutionizing neo-banking in rural India.

Omnivore is a venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems.