AgriTech Funding In India

AgriTech Funding In India

According to the latest report, for 2016, over $3.23 Bn was invested in agriculture sector worldwide. Out of which, 53 Indian agritech startups raised $313 Mn. Globally, category-wise, 40% of the total funding ($1.29 Bn) was invested in food marketplaces or the food ecommerce category, followed by biotechnology startups which is 22% of the funding ($719 Mn). Investment in high-tech agriculture technologies, which include data-capturing devices and farm management software, came third at $405 Mn, while investment in Novel Farming Systems, which are startups using new and innovative ways to produce agricultural and biological products, was the fourth category wherein funding flowed ($247 Mn).

 Demand-side factors such as population growth, rising income levels leading to increasing consumption, and increasing exports favour the growth of agriculture in India and Odisha. More so, policy support from the government such as increasing MSPs, increasing crop insurance support, the introduction of various schemes to facilitate farmers, welfare initiatives to easy credit to farmers will also increase growth. The need of the hour is for all stakeholders – from governments to agritech startups to investors – to come together in harnessing the opportunity to transform this sector. Mostly, government policies treat agriculture as a poverty alleviation method but the focus should be on enhancing productivity and raising incomes. The momentum should be on the application of technology to lower challenges on the input side right from planting to irritating to harvesting and finally selling.

 The idea should centered on the theme that the agriculture value chain requires disturbance and innovation to tackle inefficiencies – which would most likely come from tech-driven startups rather than the traditional agriculture players in India and open up the  hidden opportunity of income.

From an investor’s perspective, investors are normally looking for four-five years’ kind of time frame for returns. We have to look for asset-light opportunities, where we can use technology to scale up businesses. One of them is information technology – which farmers can use to multiple and smartly managed  Agri-Business.

it’s challenging to monetize these products, there are interesting models which are being monetized, and farmers are willing to pay for them. However, on part of technology such as farm mechanization, India is lagging.

 He said, “Despite India having one of the highest productive agricultural land in the world, its share of sales in the mechanized products sold by top Fortune 100 farm companies in the world is less than 5%.” This is where he believed an opportunity exists for startups.

Since average landholding size of farmers is very small, many mechanization technologies are beyond the means of farmers. He said, “Hence, startups need to come up with technologies which can be leased to farmers for a period of time to but whose maintenance rests majorly with start-ups. 

We have to develop confidence in agritech extension activities, patience will have to be a key factor here. We might see a negative impact in the first four or five years and then the model might turn around.