Abu Dhabi aims to boost food production with incentives to firms specialised in agriculture technology. Courtesy: Pure Harvest Smart Farms
Abu Dhabi aims to boost food production with incentives to firms specialised in agriculture technology. Courtesy: Pure Harvest Smart Farms
Abu Dhabi aims to boost food production with incentives to firms specialised in agriculture technology. Courtesy: Pure Harvest Smart Farms
Abu Dhabi aims to boost food production with incentives to firms specialised in agriculture technology. Courtesy: Pure Harvest Smart Farms

Economy

India's FreshToHome start up gets backing from Abu Dhabi

The company will develop projects in desert agriculture and aquaculture that advance food security

Fareed Rahman
Fareed Rahman

December 07, 2020

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Bengaluru-based start-up FreshToHome said it is receiving financial and non-financial incentives from Abu Dhabi Investment Office, to develop projects that boost food production in the emirate.

“We intend to bring our US patent pending, AI-powered virtual commodities exchange technology, our e-grocery platform and our nano farm aquaculture technology to Abu Dhabi, enhancing food production and distribution for the region,” Shan Kadavil, chief executive and co-founder of FreshToHome, said.

The start-up sells fresh fish, meat and vegetables to customers by sourcing directly from fishermen and farmers. Business boomed during the pandemic with FreshToHome currently processing about 1.5 million orders per month. The company has $85m in sales annually and also operates in the UAE.

The company recently raised $121 million in funding with the backing of a number of investors including the Investment Corporation of Dubai, Bahrain's Investcorp as well as DFC, the US government's development finance institution.

CE Ventures, the corporate venture capital platform of Crescent Enterprises has also provided backing to the company in the UAE.

“The rapid growth of Abu Dhabi’s AgTech ecosystem is giving rise to new technologies supporting the advancement of the agriculture sector in the emirate, region and beyond," Tariq Bin Hendi, director general of ADIO said. "We have created an environment where innovators are supported to turn their ideas into reality."

Abu Dhabi is offering more than Dh110m in financial incentives to agricultural technology companies looking to set up operations in the emirate.

The incentive programme, set up under the government's Dh50 billion Ghadan 21 accelerator initiative, includes both financial and non-financial benefits, Adio said in September.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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