Agtech startups are putting technology to good use to build market links, including business-to-business (B2B) and digital platforms. The Covid-19 pandemic helped them take advantage of the weakness in traditional supply chains to scale up rapidly, says the partner of a venture capital firm that funds such startups. 

“Despite being in their early days, most startups today in agriculture are able to provide farmers with an alternative to existing channels for selling their marketable surplus or produce,” says Subhadeep Sanyal, Partner, Omnivore, which funds agriculture and food startups. 

According to him, these startups enable better price and value discovery for farmers, more information, market options, service and products.  “From access to discovery, fulfilment, finance, logistics — varied aspects of agri-business problems are being solved by different players,” Sanyal said.

Addressing challenges

However, different startups have different advantages and everything depends on the focus of the firm, he said. 

Startups offer quality products at “reasonable” prices, while delivery schedules are reliably coupled with required credit terms. These firms are able to address the input challenges of India’s agriculture, the venture capital firm partner said. 

Asked if there was any intervention from States, particularly after the Centre withdrew farm reform laws in December, Sanyal said the startups it funds have not faced such problems till now. 

Soon after the farm reform laws were withdrawn, some states, especially Maharashtra, had reportedly objected to purchase of farm produce outside the agricultural produce marketing committee (APMC) yards. 

Abundance of connections

Some farmer producer companies were issued notices over “out-of-mandi” business in December 2021. However, there was no further development on it.

Asked if any State insisted on mandi fees for “out-of-mandis” sales, the Omnivore partner said, “we haven’t seen anything specific over the involvement of the State anywhere…”

He said agri-businesses are able to benefit from the abundant connections of these startups; they can find new customers, suppliers, and address issues faced by farmers every day. 

“Farmers can get the correct information, techniques, and efficiencies for their pre-harvest applications and post-harvest use cases. Additionally, B2B markets offer a wide array of avenues to buy and sell,” he said. 

Ease of doing business

On farmers benefiting while selling produce and buying inputs, Sanyal pointed to DeHaat as an example. “The reason they (DeHaat) have more than eight lakh farmers on their platform is because they have created a one-stop-shop for them, complete with distribution of high-quality agricultural inputs, customised farm advisory, market linkage to sell produce, and access to financial services and insurance, he said. 

Sanyal, whose venture capital has invested in startups such as DeHaat, Bijak, AGRIM, ReshaMandi and AgNext, said if innovation can improve ease of doing business, it paves the way for better yields and farmers’ income. 

These startups, according to him, are among the top in disrupting the B2B marketplaces in the country. 

According to AgFunder, one of the world’s most active food tech and agtech venture capital (Omnivore is its India report partner), investments in the agtech sector stood at $527 million in 74 deals in 2020-21, compared with $431 million in 119 deals in 2019-20.