Hyderabad-based Dodla Dairy Ltd has tapped $50 million in private equity from TPG Growth to help fund its business supplying India’s growing demand for dairy products across 66 regions in the country.
The deal also helps sustain the dairy company’s procurement chain, which sources milk from approximately 250,000 smallholder farmers in the country. “Most of India’s smallholders are only earning a few dollars a day, surviving on the brink of poverty,” said Bill McGlashan, TPG Growth Founder.
Global social impact fund TPG Growth’s Rise Fund made the private equity investment in Dodla Dairy, in exchange for a “significant minority stake in the company post the deal,” says Vish Narain, a partner at TPG Growth. This follows news in March that TPG Growth was nearing acquisition of a 25% stake in Dodla held by Proterra Investment Partners for $47 million.
The notable deal with Dodla is TPG Rise’s first foray in AgTech and its second impact investment deal since EverFi.
Intentionality in Business
Founded nearly twenty years ago in 1998, Dodla Dairy today sells about 900,000 liters of milk and six tons of milk products from milk it sources from smallholder farmers in 7,000 villages.
Its milk procurement strategy from smallholder farmers is intentional. “Working closely with thousands of local farmers to bring our product to market has helped us not only reach our leading position in the marketplace, but also positively impact our local communities,” said Sunil Reddy, founder of Dodla.
“India has more dairy farmers than any other country, and is the world’s largest and fastest-growing producer of milk. Yet many of the small farmers who produce that milk do not have access to the basic tools and networks necessary to sustainably and reliably generate profits.” adds Bill McGlashan, TPG Growth Founder and Managing Partner and Co-Founder and CEO of The Rise Fund.
Dodla engages with smallholder farmers closely, assisting in affordable animal feed and veterinary services. It also connects farmers to regional banks – it claims to have helped more than 2,300 farmers gain access to financing to help sustain milk production.
Dodla is well positioned to capitalize on the growing demand for milk, which is expected to grow at a CAGR of 5% to 200 million tons in 2022 from 138 million tons in 2014.
Sources: Deal Street Asia, Business Wire, Dodla Dairy, Crunchbase
