31 May Agritech startups on the rise despite pandemic year
Despite a pandemic-hit year, agritech startups in 2020 saw over $300 million of investments. The number of such startups has shown steady growth with around 600-700 startups dominating the Indian agritech ecosystem.
According to a Ken Research report, the Indian Agritech market was expected to grow at a CAGR (revenue) of 32 per cent from FY20 to FY25. Karnataka, Maharashtra and Delhi-NCR had the most number of agri-tech startups in the country.
However, the penetration of agritech solutions among the Indian farmers was low and just 9 to 10 per cent.
As per an analysis, “India Agritech Market Outlook to FY’2025 by Nature of Services (Input Market Linkage and Farming as a Service, Supply Chain, Post Harvest Management and Output Market Linkage, Precision Farming, Advisory and Analytics and Agri Fintech)” a variety of business models have emerged in India to tackle the opportunities in the agricultural space. These include the engineering led-innovation model, downstream ‘farm-to-fork’ supply chain model, IoT or big data-led innovation model and the upstream marketplace model. Besides this, industry players and many new startups are now leveraging technology for instance data digitization, SaaS (software as a service), machine learning, data analytics, artificial intelligence (AI), and Internet-of-Things (IoT) to make the agriculture industry more efficient.
As per a report by Inc42 on the country’s agritech market landscape, multiple factors have driven growth in this market: Post-harvest losses of around $13 billion in agricultural value (yearly average), supply chain inefficiencies and the wastage of over 40 per cent of food even before it reaches the end consumer due to supply chain intermediaries.
For agritech startups, the goal is to make supply chains efficient in the sector, in addition to providing better access to agriculture inputs for the farmers. The report points out that a few agritech startups are also providing better weather and soil information to the farmers as there is an ever-growing need for farmer resilience technology in India.
Many challenges still face the Indian agritech segment, the report notes. Many firms still have rigid agri-models and some lack commercial guidance and are not able to work properly with the Indian middlemen and distributors. Besides this, there is a lack of subject matter experts who can work with technology.
Agritech experts such as Palat Vijayaraghavan, Founder and CEO of LEAF, feels that a majority of farmers in the country struggle with financial transparency and transparency in the agriculture ecosystem especially when it comes to selling their produce. They grow high-value crops with a lot of struggle and then face multiple hurdles to sell the produce, usually at a bargain, to an intermediary. They then wait for weeks to get paid for their harvest, only to have to commute over 40-50 kilometres on average to a bank branch or an ATM to access that money.
“Our digital platform is helping farmers take out the pain in all these steps for the farmers. With our on-ground farmer support centres, the farmers can grow the best of the produce, sell the harvest through our centres, easily realise the value for their harvest and access the fruits of their harvest,” said Vijayaraghavan.