“We are bullish on agtech in India,” says Asha Impact’s investment associate Raghav Rungta, in an exclusive interview with AFN. And this impact investment company has every right to be.
Snapshot: India’s Agtech Sector in 2019, so far
Source: NASSCOM 2019 Report
The number of agtech startups has grown 25% from the year before, standing at over 450, according to a 2019 NASSCOM report. That means every ninth Agritech startup in the world comes from India, and it doesn’t end there. Support for the sector is at a fever pitch, with funding surging 300% to $248 million from 2018.
Sentiment in the sector is also largely positive, as nearly half of the CEOs polled by the Indian trade association believes the next agritech unicorn will emerge from India within the next three years.
Every ninth Agritech startup originates from India
Recent high-profile funding activity in the sector adds weight to Asha Impact & NASSCOM’s case.
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Snapshot: Ag+food tech deals in India
Following in the footsteps of Ninjacart, DeHaat and Gramophone have also received multi-million-dollar pats on their backs. And Asha Capital gave us a glimpse into what makes agtech startups attractive to impact investment companies like them.
“We are watching companies across the value-chain, from inputs, advisory, precision ag-to-market linkage, storage and finance. On top of that, we are looking to back strong and contextualized founding teams that can address the biggest challenges facing Indian agriculture at scale,” says Rungta.
Apart from Asha Impact, Info Edge, Raveen Sastry, and Better Capital were other big names that took part in Gramophone’s $3.5 million first significant round of financing. The Indore-based startup said that the funds will go towards spreading agronomic love to more states in India.
Gramophone eyeing India-wide expansion
Commenting on the Series A, Tauseef Khan, co-founder & CEO of Gramophone, said, “We’re on a mission to create a future of farming that puts ‘Farmers First’ by democratizing knowledge, building transparency in transactions, and creating a connected ecosystem for farmers’ business.”
“This investment will enable us to invest aggressively on product, data science and scale operations across geographies.”
The three-year-old company provides farmers agronomic insights to help them achieve better yields, and ultimately aims to help them get more bang from their buck for their crop. Through Gramophone, farmers can also buy genuine crop protection, crop nutrition, seeds, implements and agri hardware.
“Gramophone’s focus creates a stronger hook”
Commenting on Gramophone’s place in India’s $271 billion agriculture ecosystem, Rungta says he’s “very impressed” by its deep understanding of agri-business, especially its “exposure to building scalable technology platforms”, and the “ability to execute in a difficult last-mile environment”.
“Gramophone’s focus on advisory led, crop protection and crop nutrition sales – where the grower is educated prior to sale, and educated after the sale – generates outsized value over and above the existing informal network. This thereby creates a stronger hook for grower customers,” Rungta elaborated.
Delving deeper into what set Gramophone apart from the bunch, he says most of the startups they evaluated were “either not structured for scale, or focused on low-hanging sales of branded seeds and hardware”, saying that the networks limited the value-add. On top of that, it was further constrained to “convenience or unsustainable discounting”.
“Strong adoption among the farmer community”
Info Edge is a returning investor, having splashed out some $2 million earlier on Gramophone in April, and another $1 million in a pre-Series A back in March 2018. They echoed their Series A partner’s sentiments.
Kitty Agarwal, the company’s Head of Corporate Development (VC), called Gramophone’s selling point a “huge opportunity,” due to agriculture being the backbone of India’s economy.
“The company has shown tremendous growth and witnessed strong adoption among the farmer community since we first invested a year ago. The team has executed very well on their vision and we are excited to continue backing them,” added Agarwal.
Are you bullish, or bearish on India’s vibrant startup scene?
Do you know an up-and-coming trailblazer or have a tip-off about a big fund close?
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