Factors Driving The Growth Of Agritech Industry In India

 Factors Driving The Growth Of Agritech Industry In India

AgriTech
is the concept of applying modern technologies to the agricultural sector with
a view of enhancing and producing with efficiency and generating sufficient
revenue to support livelihoods. AgriTech
promises to help farmers increase crop yields, improve animal health, reduce
waste, lower carbon footprints and improve scalability by easing the burden of
labor-intensive tasks.

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Indian
Agritech industry is growing at a rate of 25% /yearly and factors are  increase digitization, initiatives by Govt and huge interest of
investors. More than 60% population has their dependency on agriculture in one
or another way so huge opportunity is for entrepreneurs seeking this sector a
business playground, investors who are seeking good exits in years to come and
employments which will be created by the new startups entrepreneurs.   

Driving
force for giving agritech a strong wing is leveraging technology such as data
digitization, data analytics, machine learning, AI, Raas, Saas, efforts are to
make the industry more efficient.

Sentiments
are good in this sector after Covid, especially in terms of investments. Huge
money flow is coming from financial institutions.  As a rough estimate is USD 350 million
inflow has been done post covid, and expect to increase by end of this year
around USD 1.5 billion resulting in a great opportunity in Agri sector.

A brief summary
about factors influencing the growth factors:

Ø  Government initiatives & Reforms supporting the
Agtech Sector

Ø  Challenges Faced by the Industry in India

Ø  Startups and why so interaction & interest.  

 

Government
initiatives & Reforms supporting the Agtech Sector

The way developments are going on in agri
sector after the Farm reforms done by Govt of India just after March 2020, Government
is acknowledging the importance and accordingly providing the required support
through various schemes and initiatives.  Huge credit goes to Prime Minister Narendra
Modi cabinet for giving a shape to Farm Acts and reforms. The Modi Government
has been dynamically making policies to improve farmers’ lives in India. In
fact, the government has promised its citizens to double the incomes of farmers
by the end of 2022.

Growth has been accelerated based on following
big launces by the Modi Government.

        
I.         I. Agri-Udaan
initiative: focuses on catalyzing scale-up stage food and Agribusiness
startups through rigorous mentoring industry networking and investor pitching.

       II.           
INR
5000 crore grant based scheme by NABARD for digitisation of  35000+ primary Agriculture Credit Societies –
PACS by Financial year 2022-23.

     III.           
Multilingual
App which provides farm inputs and machinery & equipment on rent.

    IV.           
Transport
and marketing assistance (TMA) scheme to provide financial assistance for
transport and marketing of agriculture products to boost agri exports.

      V.           
Pradhan
Mantri Krishi Sinchayee Yojana (PMKSY), PMKSY focuses on conserving water and
increasing irrigation coverage in a focused manner with targeted objectives of
source creation, distribution, management, field application, and extension
activities.

    VI.           
National
Centre for Management of Agricultural Extension (MANAGE) in Hyderabad.

   VII.           
Establishment
of National Agriculture Market (eNAM), a pan-India electronic online trading
portal which networks the existing APMC mandis to create a unified national
market for agricultural commodities, providing better price through the
transparent auction process.

Challenges faced by the Industry

Like other industries, Indian agri industry is
also facing various challenges. Agriculture is the bone of Indian economy but
due to lack of Govt willpower, nothing much could be done by the previous Governments.
Polarisation of interest of farmers has been done by the political parties for
their will and win strategy, a big factor remains unchanged just taking farmers
mere a vote bank.  This has nothing
contributed but only giving a different thought plowed by various political
parties.  But if we drive to the business
directions and impact on farmers there are various challenges still the industry is
facing:

1.

 1.    Lack
of financial services

2.      
Limited
Digital infra

3.      
Issue
in market linkage which further lead to malpractices,

4.      
Unorganised
marketing systems where no clarity on govt. policies and benefits.

5.      
Non
availability of quality agri inputs and products.

---

 Major Startups in Agritech Sector

 

Few Startups have shown the courage to build a strong
ecosystem for better transparency and scalability through super technology
tools.  As per a rough estimate 450
startups are working in the Indian Agri sector.

AgriTech Startups or established old companies
work on products, services or applications derived from agriculture that
improve various processes. Technology and data can open new opportunities and
help solve problems with production, traceability, and the preservation of
natural resources

ü 

Categorisation of the startup based on their ecosystem
is done as per below ( https://www.ibef.org/blogs/agritech-start-ups-the-ray-of-hope-in-indian-agriculture)

Upstream marketplace model – Agrostar, BigHaat, Agrevolution,
Agronxt, Ninjacart, Agrihub and FarmGuru are the main players employing this
model

Downstream ‘farm-to-fork’ supply chain model – Krishi Star, Crofarm, Sabziwala
and BharatBazar are start-ups working towards increasing efficiencies using
this mechanism

Farming-as-a-service model – Far Mart, EM3 Agri Services, RAVGO
and Oxen are players offering farm equipment rentals to ease the burden of
capital investments for farmers

IoT or Big Data-led innovation model – FlyBird, Cropin, Gro4, Freshokart and Exabit
Systems are deploying smart technology to assist farmers gain access to timely
information and drive productivity

Engineering led-innovation model – Kheyti, Drip, Kamal Kisan and
Nanopix are players driving innovative solutions in this space

Agritech startups are the need of the nation
right now. More and more entrepreneurs are setting up companies in this field,
grabbing the opportunity to transform the sector. The government policies are
also giving thrust to these startups so that they can easily find investors.
The farmers can finally look forward to better price realization now and
embrace this new initiative.

In 2020, more than 20 agritech start-ups have
cumulatively raised more than Rs. 920 crore (US$ 125 million) across equity,
venture debt and conventional debt rounds. Some of the notable equity rounds
are listed in the table below: https://www.ibef.org/blogs/agritech-start-ups-the-ray-of-hope-in-indian-agriculture

Startup	Model	Funding Till Date (US$ million)	Latest Round	Key Investors
Arya Collateral	Warehousing and Supply Chain	9.3	Pre-Series B	LGT, Aspada, Omnivore
Bijak	B2B Marketplace	14.6	Series A	RTP, Omidyar, Better Capital, Surge, Omnivore
Clover	Warehousing and Supply Chain	6.9	Series A	Accel, Omnivore, Mayfield
Crofarm	B2B E-commerce	4.9	Seed	Smile group
DeHaat	Full Stack	16.5	Series A	Sequoia, FMO, Pi
Ergos	Warehousing and Supply Chain	6.3	Series A	Aavishkaar Capital
IntelloLabs	Image recognition (Agronomy)	8.8	Series A	Saama, Nexus, SVG
Jai Kisan	Full Stack	6	Seed	Arkam, Blume, Better Capital
Kisan Network	B2B Marketplace	3.5	Series A	Misteltoe, YC, Foundersclub, Thiel Foundation
Procol	SaaS – Cloud based procurement software	4.8	Series A	Surge, Blume, Beenext
Vegrow	Big Data & Farmer Analytics	2.5	Seed	Matrix Partners, Ankur Capital, Titan Capital
WayCool	E-Distributor (B2B)	65.7	Series C	Lightbox, FMO, Aspada

 

Cropin Technology well articulated the solution: https://www.cropin.com/segments/

• ·  Farming
  Companies: Revolutionary technology for Contract Farming Companies, OrganicFarming Companies, Export and Pack House Processing Companies, Commodity Traders
• ·       Seed
  Production Companies: Cutting-edge technology for Growers and Sellers of seeds
• ·       Agri
  Input Companies: Breakthrough technology for Producers and Sellers of agri
  inputs: fertilizers, nutrients, pesticides, seeds and farming equipment
• ·  Financial
  Lending Institutions: Risk Mitigating technology for Banking & Financial
  Institutions offering agriculture loans
• ·    Crop
  Insurance Provider: Risk Minimizing technology for Insurance companies offering
  agriculture insurance
• ·   Government
  & Advisories: Innovative Technology for Government and Development agencies
  involved in agriculture projects on rural development and livelihood, e.g. projects
  under Government of India’s NFSM & NRLP schemes

Future of
Agritech in India is bright  not because
of the funding scenario being pushed but because of the need and a solution
to the problems faced by the industry. Opportunity is huge in Indian Agri
Sector, by 2025 Agritech industry will have USD 25 billion sizes in terms of trade
being done by the new tech-based startups. 

 

Written and
consolidated by

Balwant
Singh Rana

17.07.2021
Jaipur, India