Startup Deep Dive : Urban Kisaan — how a YC-backed hydroponics startup cut costs 43% to turn its first profit

UrbanKisaan is pitched as the future of farming — Y Combinator money, a BASF venture cheque, hydroponic towers that its founders say grow leafy greens on 95% less water than a field. Yet in the year to March 2023 the entire company earned ₹14.65 crore and lost almost exactly as much, posting a net loss of ₹14.44 crore (Entrackr, citing Registrar of Companies filings). A business built to feed cities was, on its own numbers, spending nearly two rupees for every rupee it took in.

Then something unusual for the category happened: it stopped. In FY24 UrbanKisaan flipped to a net profit of ₹2.29 crore on revenue of ₹18.79 crore (about $2.0 million at $1 ≈ ₹96.0 as of 18 September 2026, Trading Economics) — not by scaling faster, but by cutting total expenses 43.2% in a single year (Entrackr). This is a deep dive into a small, contested, quietly stubborn Hyderabad startup that did the thing most vertical-farming companies never manage: it made the unit work before it ran out of money.

Quick facts

What they do

UrbanKisaan grows vegetables, leafy greens and herbs without soil, using hydroponic systems in which nutrient-rich water is recirculated through stacked growing trays rather than poured onto fields, and sells the produce to urban consumers in Hyderabad and Bengaluru through franchise-owned brick-and-mortar stores, a mobile app and a website — with some produce grown in the shops themselves. Co-founder Vihari Kanukollu told TechCrunch in September 2020 that the system uses 95% less water than conventional farming, produces about 30% more, and grows more than 50 vegetable varieties pesticide-free; alongside the retail business the company sells home-growing kits (priced at roughly $200 at the time) and, more recently, sets up hydroponic farms for partners abroad. Those growing and yield figures are company-stated claims reported in the press, not audited disclosures.

The origin

The idea started with a son shopping for his mother. Vihari Kanukollu, who came from a commerce rather than an agriculture background, told TechCrunch that he began exploring the concept in 2018 after struggling to find vegetables he trusted to be free of pesticide residue. The problem he kept circling back to was bigger than one grocery run: India faces acute water stress, with an estimated 500 million-plus people projected to lack adequate drinking water by 2030, even as conventional farming leans heavily on rain and irrigation and, in his telling, on chemicals. A hydroponic system that recycled water and eliminated soil-borne pesticide use answered both worries at once.

To make the science real, Kanukollu paired with Dr Sairam Reddy Palicherla, a scientist with a PhD in agricultural biotechnology and, by TechCrunch’s account, more than two decades studying farming, who serves as the company’s chief scientific officer. Srinivas Chaganti is the third co-founder; all three appear as the registered directors of Urbankisaan Farms Private Limited in the company’s RoC/MCA record. The founders trace the venture to around 2017 (Tracxn), while the operating company was formally incorporated on 8 January 2020 in Hyderabad (RoC/MCA filing via ZaubaCorp). The company went through Y Combinator, the Silicon Valley accelerator, which gave a small, unglamorous Indian agri-startup a stamp that international investors recognise.

The struggle years

The hard part of vertical farming is not growing the plants. It is doing it at a price a shopper will pay while covering the cost of the hardware, the electricity, the real estate and the people — and for most of its life UrbanKisaan could not. The clearest window into how expensive the model was comes from FY23, the earliest year for which independent trackers reported its filings. In the year to March 2023 the company generated ₹14.65 crore of revenue and ran up ₹28.96 crore of total expenses, producing a net loss of ₹14.44 crore (Entrackr, citing RoC filings). In plain terms, it spent close to two rupees for every rupee of sales.

The efficiency ratios from that year are brutal and worth stating unsoftened. UrbanKisaan’s EBITDA margin in FY23 was -91.78%, and its return on capital employed was -409.39% (Entrackr). Those are not the numbers of a company with a temporary cost problem; they are the numbers of a business model that had not yet been made to pay. The thin base it was working from shows in the statutory record too: the company’s paid-up share capital stands at just ₹44,141 against an authorised ₹1.1 lakh (RoC/MCA), so the operating cash to absorb those losses came almost entirely from outside investors rather than from a deep equity cushion.

• FY23 revenue of ₹14.65 crore against ₹28.96 crore of total expenses — a loss of ₹14.44 crore (Entrackr, RoC filings).
• FY23 EBITDA margin of -91.78% and ROCE of -409.39%, evidence the core unit did not yet cover its own costs (Entrackr).
• Paid-up capital of only ₹44,141 (RoC/MCA), meaning losses were funded by external capital, not retained equity.
• Latest disclosed external funding round reported in July 2021 (BASF Venture Capital), leaving little fresh reported capital to burn through the loss-making years that followed (Inc42; Entrepreneur).

The turning point

The single event that changed what kind of company UrbanKisaan is did not involve a new round or a splashy launch. It was the FY23-to-FY24 swing in its own accounts. Between the year to March 2023 and the year to March 2024, revenue grew 28.3%, from ₹14.65 crore to ₹18.79 crore — respectable, but not transformative. What was transformative was the cost side: total expenses fell 43.2%, from ₹28.96 crore to ₹16.45 crore, in a single year (Entrackr). A company that had been spending almost twice its revenue suddenly spent less than it earned.

The result was a clean reversal on every line that had looked hopeless a year earlier. UrbanKisaan went from a ₹14.44 crore net loss in FY23 to a ₹2.29 crore net profit in FY24. Its EBITDA margin moved from -91.78% to +18.45%, and its ROCE from -409.39% to +40.07% (Entrackr). The mechanism matters as much as the outcome: this was profitability manufactured by discipline, not by demand. Revenue rose by roughly ₹4 crore; expenses fell by roughly ₹12.5 crore. For a category whose global graveyard is full of well-funded vertical farms that scaled their losses until the money ran out, cutting to a profit at ₹18.79 crore of revenue is a genuinely distinctive move — and a fragile one, since expense cuts of that size cannot be repeated every year.

The money behind it

UrbanKisaan’s cap table is small, foreign-flavoured and, in its totals, disputed. The named milestones are clearer than the sums:

• Y Combinator seed: UrbanKisaan went through Y Combinator and raised early seed capital of roughly $1.5 million; TechCrunch reported in September 2020 that the company had raised about $1.5 million to date (TechCrunch, September 2020; thekredible/Inc42).
• Angel backing: TechCrunch reported in September 2020 that the actress Samantha Akkineni was among the company’s backers — an unusual celebrity angel for an agri-startup (TechCrunch, September 2020).
• BASF Venture Capital: the German chemical major’s venture arm announced an investment in UrbanKisaan on 13 July 2021, with both sides declining to disclose the amount; Inc42 and Entrepreneur reported it as BASF Venture Capital’s first investment in an early-stage business focused on India (Inc42, July 2021; Entrepreneur, 2021).
• Total raised (contested): trackers disagree — thekredible and Inc42 list about $1.5 million across two rounds, Tracxn lists about $7 million across three rounds from 14 investors, and CB Insights cites a figure near $9.2 million. The range, not a single number, is the honest reading (thekredible; Inc42; Tracxn; CB Insights).
• Valuation: no post-money valuation has been publicly disclosed for any UrbanKisaan round, so any specific figure would be a guess and is not stated here.

The two backers that most shaped the company are the two that gave it credibility rather than the largest cheques. Y Combinator’s accelerator badge opened doors with global investors that a Hyderabad hydroponics startup would otherwise have struggled to reach. BASF Venture Capital’s entry — reported as its first early-stage India bet — brought a strategic industrial investor with deep crop-science reach into a business whose whole premise is crop science (Inc42, July 2021).

How it makes money

Strip away the technology language and UrbanKisaan is a hyperlocal fresh-produce operation with a hardware and services sideline. The walk-through, with the cost structure drawn from its FY24 filing:

• Money in — retail produce: the core revenue is selling hydroponically grown vegetables, greens and herbs to urban households through franchise-owned stores, its app and its website, with some produce grown in the store itself to cut logistics and spoilage (TechCrunch, September 2020; Inc42 company profile).
• Money in — kits and hardware: home-growing kits (reported at roughly $200 in 2020) let consumers grow their own greens, adding a one-off hardware sale on top of recurring produce purchases (TechCrunch, September 2020).
• Money in — farm set-up abroad: the company has moved into setting up hydroponic farms for partners internationally, describing an ability to build farms “for a fraction of the costs” of Western vertical farms (verticalfarmdaily, company interview).
• Money out — people: employee-benefit expenses were the largest single cost line in FY24 at 27.29% of total expenses, up from 20.65% in FY23 (Entrackr).
• Money out — depreciation: depreciation rose to 6.85% of total expenses in FY24 from 2.99% in FY23, a signature of a capital-intensive model that must buy and write down growing systems, pumps and lighting (Entrackr).
• The part people get wrong: advertising was just 1.73% of FY24 expenses, down from 4.66% in FY23 (Entrackr) — this is not a marketing-led consumer brand. UrbanKisaan is marketed as deep-tech vertical farming, but the money is a small, cost-controlled fresh-produce and franchise business, and its FY24 profit came from spending less, not selling much more.

The numbers

Figures below are operating revenue and net profit/loss as reported in Urbankisaan Farms Private Limited’s RoC filings, compiled by Entrackr and thekredible. Standalone figures for FY22 and earlier were not independently reported by trackers at the time of writing and are omitted rather than estimated.

• Revenue grew 28.3% year-on-year in FY24, from ₹14.65 crore to ₹18.79 crore (Entrackr).
• Total expenses fell 43.2% in FY24, from ₹28.96 crore to ₹16.45 crore — the single biggest driver of the turnaround (Entrackr).
• EBITDA margin moved from -91.78% in FY23 to +18.45% in FY24; ROCE from -409.39% to +40.07% (Entrackr).
• Within FY24 expenses, employee benefits were 27.29% of the total, depreciation 6.85% and advertising 1.73% (Entrackr).

Where the money comes from

UrbanKisaan does not publicly break out its revenue by product line or geography, so what follows is a channel-and-market map from reported detail rather than an audited split:

• By channel: revenue comes through franchise-owned brick-and-mortar stores, the mobile app and the website, supplemented by home-growing kit sales — a mix that pushes some of the retail capital and operating risk onto franchisees rather than the company’s own balance sheet (Inc42 company profile; TechCrunch, September 2020).
• By home geography: operations are concentrated in Hyderabad, the company’s home base, and Bengaluru, with produce grown in suburban greenhouses and indoor vertical farms near those cities (Inc42; TechCrunch, September 2020).
• By overseas expansion: the company has pointed its growth at the Middle East and Southeast Asia rather than the West, including a partnership with NKK Investments to build hydroponic farms in Oman, the UAE and Saudi Arabia (verticalfarmdaily; company statements).
• The surprise: for a business whose brand is “farms,” a growing part of the story is not selling greens at all but building and equipping farms for others abroad, and franchising storefronts at home — an asset-lighter route to growth than owning every farm and shop itself.

The risks

• The profit came from cuts, not scale, and cuts run out: the FY24 turnaround was driven by a 43.2% fall in expenses against a 28.3% rise in revenue (Entrackr). Advertising was already trimmed to 1.73% of expenses; there is limited room to cut further without starving growth, so holding a profit while re-accelerating revenue is an unproven balancing act.
• Tiny scale and thin capitalisation: FY24 revenue of ₹18.79 crore is small enough that a single weak quarter, a spoilage event or a delayed funding round has an outsized effect, and paid-up capital of just ₹44,141 (RoC/MCA) means the company has almost no internal equity buffer — it depends on external capital, and no fresh round has been publicly reported since July 2021 (Entrackr; Inc42).
• Capital intensity meets perishability: hydroponic hardware drives depreciation (6.85% of FY24 expenses, up from 2.99%) and every new city needs its own farms and stores, while the product itself is perishable and hyperlocal — a combination that makes geographic expansion slow and cash-hungry relative to a software business with the same revenue (Entrackr).
• Disputed, sparse funding record: trackers cannot agree whether the company has raised about $1.5 million or about $7 million, and no valuation is public (thekredible; Tracxn; Inc42). That opacity, plus the four-year gap since the last reported round, limits outside visibility into how much runway actually backs the business.

The takeaway

Vertical farming has been one of the most seductive and most punishing pitches in agri-tech: clean, local, water-light food, sold to investors on a vision and, too often, funded straight into insolvency as the hardware bills outran the salad sales. UrbanKisaan’s real contribution is not the vision, which it shares with dozens of failed peers, but a single boring year in which it proved a hydroponic operation could be run at a profit at small scale by spending less than it earned. The transferable lesson is uncomfortable for a category addicted to growth stories: in a capital-hungry business with perishable output, reaching a ₹2.29 crore profit on ₹18.79 crore of revenue can be worth more than raising a large round to grow at a loss. Survival, made numerical, is its own kind of proof — and it is the part of UrbanKisaan’s story that its more heavily funded competitors never got to write.

Frequently asked questions

What does UrbanKisaan actually sell?

Pesticide-free vegetables, leafy greens and herbs grown hydroponically without soil, sold to urban consumers in Hyderabad and Bengaluru through franchise-owned stores, a mobile app and a website, with some produce grown in the stores. It also sells home-growing kits and sets up hydroponic farms for partners abroad (TechCrunch, September 2020; Inc42 company profile).

Who founded UrbanKisaan and when?

Vihari Kanukollu (CEO), Dr Sairam Reddy Palicherla (chief scientific officer) and Srinivas Chaganti are the co-founders and registered directors. The venture is traced to around 2017 (Tracxn), and the operating company, Urbankisaan Farms Private Limited, was incorporated on 8 January 2020 in Hyderabad (RoC/MCA via ZaubaCorp).

Is UrbanKisaan profitable?

Yes, as of its most recent reported year. It posted a net profit of ₹2.29 crore in FY24 on revenue of ₹18.79 crore, reversing a ₹14.44 crore net loss in FY23 — mainly by cutting total expenses 43.2% (Entrackr, citing RoC filings).

How much has UrbanKisaan raised, and from whom?

The total is contested: trackers report anywhere from about $1.5 million (thekredible/Inc42) to about $7 million (Tracxn). Named backers include Y Combinator and BASF Venture Capital, whose investment was announced on 13 July 2021 and reported as its first early-stage India deal; TechCrunch also reported actress Samantha Akkineni as an early angel (Inc42; Entrepreneur; TechCrunch, September 2020).

What is UrbanKisaan worth today?

No post-money valuation has been publicly disclosed for any of its funding rounds, so a specific figure cannot be verified. The company remains private and is not listed on any exchange (thekredible; Tracxn).

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr / thekredible, “UrbanKisaan achieves 28% revenue growth and Rs 2.29 crore profit in FY24,” 2024 (FY24 and FY23 revenue, profit/loss, expenses, EBITDA margin, ROCE, expense mix; citing RoC filings).
• Inc42, “UrbanKisaan — Funding, Revenue & Investors” (company profile), accessed September 2026.
• Inc42, “Y Combinator-backed UrbanKisaan receives investment from BASF VC,” July 2021.
• Entrepreneur India, “UrbanKisaan raises funding from BASF Venture Capital,” 2021.
• TechCrunch, “UrbanKisaan is betting on vertical farming to bring pesticide-free vegetables to consumers and fight India’s water crisis,” 17 September 2020.
• Tracxn, “UrbanKisaan — company profile, team, funding, competitors and financials,” accessed September 2026.
• thekredible, “UrbanKisaan — profile overview: funding, valuation, financials, news,” accessed September 2026.
• CB Insights, “UrbanKisaan — funding and financials,” accessed September 2026.
• ZaubaCorp / Tofler / TheCompanyCheck, “Urbankisaan Farms Private Limited” (CIN U74999TG2020FTC138296) RoC/MCA record: incorporation 8 January 2020, directors, paid-up capital, registered office, accessed September 2026.
• VerticalFarmDaily, “India: ‘We’re setting up farms globally for a fraction of the costs’,” company interview, accessed September 2026.

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