Data Snapshot is a regular AFN feature analyzing agrifoodtech market investment data provided by our parent company, AgFunder.
Downstream food delivery startups have dominated funding levels across agrifoodtech globally and India is no exception; in the fiscal year to March 31, 2022, over 70% of the $4.6 billion raised by startups went to those operating closer to the consumer, according to AgFunder’s India AgriFoodTech Investment Report.
However, funding for Indian farmtech startups — those used by farmers in their operations — accounted by 60% of total deal count, showing increasing activity, especially in the early stages. Farmtech startups raised $1.5 billion during the 12-month period, a 185% year-on-year increase.
A look at India’s agricultural supply chain reveals gaps that technology acceleration and adoption can fill to improve productivity. As with other regions like Africa, India is also facing drought, which is claimed to be affecting close to two-thirds of the country, but other weather events like monsoons can also have devastating impacts on the country’s agriculture industry. In addition to that, most farmers are subsistence farmers with often low productivity and income cycles, and lacking access to markets and affordable credit due to the fragmented nature of land ownership in the country.
What could have led to increased funding for Indian farmtech startups?
Global investments into farmtech have generally been on the rise since 2013. AgFunder’s 2021 Farmtech Investment Report, projected that farmtech investments would hit a record $7.9 billion, with the US taking the lion’s share of investments at 83%.
It appears tech acceleration has buoyed this trend for Indian farmtech startups too; the report disclosed that India is one of the top five most funded farmtech ecosystems globally in 2022. It comes behind the US, France and China, but was ahead of Canada in investment volume.
AgFunder describes farmtech as solutions that are helping farmers realize better farming outcomes and ultimately higher incomes. This could be increased yields, reduced harvest losses, better access to consumers and buyers and overall better farming practices especially in times where farmers are the most disadvantaged group due to climate change effects.