Indian agritech sector is blooming | The Financial Express

Indian agritech sector is blooming

Indian agritech start-ups attracted investments of $1.18 billion in 2021, up nearly 200% from the $412 million raised in 2020, stated a report.

Indian agritech sector is blooming

Supply chains disrupted by the pandemic, rapid population growth and Russia’s war in Ukraine have all aggravated the global food shortage crisis. Fortunately, India’s agricultural technology (agritech) sector could address the global problem as the sector is flourishing and investments are above the pre-pandemic levels. 

“The agritech sector has attracted high year-on-year growth from an investment standpoint owing to the entry of generalist investors who have significantly accelerated capital flows,” said Rajesh Ranjan of Krishify, a social network for Indian farmers. 

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According to Ag-Tech in India – Investment Landscape Report 2022 by ThinkAg, Indian agritech start-ups attracted investments of $1.18 billion in 2021, up nearly 200% from the $412 million raised in 2020.

Another report by food and agritech-focused venture capital firms, AgFunder and Omnivore, released on November 30, revealed that India’s agrifoodtech startups raised around $4.6 billion in 230 deals in the fiscal year 2022, up 119% from FY21.

India has overtaken China as the region’s biggest funder for agrifoodtech, closing $2.7 billion in H1-2022, and is set to break records for total funding in 2022, the report stated.

In FY21, the total funds raised by Indian startups stood at $2.1 billion via 189 deals. In contrast, around $51.7 billion were raised by startups globally in the year 2021.

“The investment trends are proof that the agri-foodtech space can no longer be called niche. It has caught the attention of generalist VCs around the world who understand that agri-foodtech is key to the transformation of India’s massive agricultural sector and rural economy,” said Mark Kahn, managing partner of Omnivore.

According to NASSCOM, India had 38 agritech startups in 2013 but has now reached a handsome number of more than 450 Agritech startups and this number is growing at the rate of 25% each year.

However, the funding winter that started in mid-2022 globally has had its impact on agritech.

Data from Venture Intelligence shows that this year while the deal count remained at 50 similar to the previous year’s, the funding amount went down to $515 million from $859 million in 2021 depicting how there was a fall in large cheque sizes in 2022.

But, it is not going to be all gloom and doom for the sector, say industry experts.  

“Although the investment environment has turned cautious due to the prevailing global market situation, agritech has undoubtedly emerged as a resilient sector since digitalization measures and technological advancements are indispensable in the agriculture ecosystem in order to bring out greater efficiency across agri value chain,” said Ranjan. 

Also, a recent report by investment banking firm Avendus Capital, the agritech sector is expected to create around eight to 10 unicorns in the next five years.

The Indian agritech sector is poised to become a $34 billion market by 2027, growing at a CAGR of 50 percent over the next 5 years, a steep rise from $4 billion currently, the report said.

As of date, the Indian agritech sector has not produced any unicorns.

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First published on: 02-01-2023 at 14:27 IST
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