Indian agri tech and food tech sectors saw investments almost doubling to $2.1 billion in financial year 2020-21, a report by Omnivore and AgFunder said.

In fiscal 2019-20, these sectors had attracted investments to the tune of $1.1 billion, the India Agrifood Startup Investment Report said. Overall number of deals rose to 189 in fiscal 2021 as compared to 133 in the previous year.

The Agrifood Startup Investment Report is an annual assessment of the latest funding trends in these sectors in the country, brought out by AgFunder, one of the most active global venture capital firms, and Omnivore, the most active VC in the country.

Also read: Agtech is here not to replace farmers, but make cultivation easier

For the first time in the Indian agritech arena, the upstream deals at 98 surpassed the downstream deals of 91 during the year. In the upstream category, start-ups develop technologies for farmers and the agri value chain, while the downstream start-ups are consumer facing entities such as eGrocery, restaurant market places and premium branded foods.

In the farmtech category that includes both upstream and farm-to-consumer e-grocery, start-ups raised $527 million in some 119 deals. The comparative figure for the previous year stood at $431 million across 74 deals.

The agritech sector saw generalist venture capital funds such as Sequoia, Matrix, Blue Ventures, Chiratae Ventrures and RTP Global picking up stakes in multiple start-ups during the year. For example, Sequoia invested in startups such as DeHaat, Bijak, Animall and Procol among others, while Matrix invested in Country Delight, Captain Fresh and VeGrow among others.

The agribusiness marketplaces raised $86 million in fiscal 2020-21, up from $30 million. The Covid-19 pandemic created an immense opportunity for marketplace start-ups that provided access to various products and services for farmers and agribusinesses, the report said.

Midstream tech most active category

Further, midstream technologies were the most active category among upstream sectors, with start-ups raising $176 million across 29 deals. Funding was fuelled by the need to improve efficiencies in India’s fragmented supply chains that were severely impacted by the Covid-19 pandemic. Also, the restaurant marketplaces continued to be the most dominant downstream sector, raising 64 per cent of the total funds in the period. In this category, the capital raising was been dominated by two players, Zomato and Swiggy.

“The India AgriFood Startup Investment Report has recorded the dynamics of this critical ecosystem since 2013. Particularly notable in this year’s report, and a milestone for the industry, is the increase in investment in technologies operating closer to the farm. While farmtech is a well-established category in India compared to many other Asian and emerging market regions, this year’s $500million+ of investments is a testament to the maturity and growing range of technologies for Indian farmers today and investors backing them,” said Louisa Burwood-Taylor, Head of Media and Research, AgFunder.

Mark Kahn, Managing Partner of Omnivore, commented, “This comprehensive report offers a closer look at the vibrant agritech and foodtech ecosystems in India. Despite the challenges of the pandemic, tenacious Indian start-ups helped keep farmers, SMEs, and consumers afloat when traditional supply chains collapsed. We believe that FY2020-21 will be remembered as the inflection point in Indian agritech, and the beginning of a revolution in rural India.”

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