May 30, 2024


Passion For Business

Funding outlook seen bright for agritech in 2021

Despite weak economic conditions induced by the Covid-19 pandemic impacting valuations, the investments in Indian agritech ecosystem are believed to be in about $300-350 million in 2020, pretty much the exact same as that of previous yr as the get started-ups attracted funding from equally new and existing traders.

Growing technological know-how adoption among farmers, progress innovation purposes, and farm sector reforms are witnessed driving investments in the agritech arena and venture capitalists are optimistic about far better prospective buyers in the new yr.

“The spotlight was viewing the agritech ecosystem increase even faster than in a long time earlier, catalysed by lockdown and the prospect to support farmers in this tough time,” reported Mark Kahn, Founding Lover at Omnivore, an affect venture fund. Omnivore invested about ₹130 crore in 11 promotions throughout 2020 as compared to ₹47 crore in 7 corporations throughout 2019.

Outlook for 2021

“The outlook for 2021 is to stay very energetic. Will most likely do 4-five new investments as very well as observe-on rounds in our existing portfolio,” he reported.

Hemendra Mathur, agritech investor, who closely tracks the house, reported there have been about twenty five promotions throughout the yr with full investments in between $300-350 million equivalent to the previous yr. “Despite currently being a Covid yr, the sector did very well. I am self-assured that the expenditure fee would maximize to $500 million a yr and hopefully we get near to $1 billion a yr as we see much more experienced agritech get started-ups. What is essential is a prosperous exit, which will acquire some time – it’s possible in 2022 and 2023 we will get started viewing exits in this house, which hopefully will give much more momentum to the sector,” Mathur included. Investments have been unfold across segments these types of as source chain and precision agriculture. About half a dozen new traders, such as mainstream traders these types of as Sequoia and Nabventures, came into the sector.

“A good deal of traders realised that agriculture is a very resilient sector. The overall economy was not developing, and in point, the development fee was damaging for most of the sectors, other than for agriculture. So, traders do realise that there is good deal of resilience in the sector,” Mathur reported.


Fund elevating

The Covid lockdown observed new organization styles arise, even though various get started-ups took the venture debt route to meet up with their funding need as elevating money grew to become tricky thanks to the tricky economic situation.

The B2C product has picked up across groups these types of as contemporary make, staples and milk, among other individuals. “A good deal of brands, which have been conference operated in the B2B phase have started B2C and I assume the development is going to continue to be for good,” he reported. Mathur included there will be new opportunities in groups these types of as health and fitness and nourishment that can leverage the raw product base we have in organic items and plant protein, among other individuals.

“India’s agriculture sector is witnessing a sturdy confluence of tailwinds these types of as an growing source of top quality entrepreneurial expertise, higher personal money flowing in to gasoline innovations, sturdy coverage assist for the sector and an unprecedented adoption of technological know-how, making it practical to establish options at scale. This, coupled with the resilience and development which the sector has shown throughout the pandemic, would drive further innovations and investments in the sector in 2021,” reported Neha Saraf, Investment Director at Aavishkaar Funds.

She included, “Aavishkaar Funds has been just one of the early backers of agritech in India and we would be doubling down on it with even higher conviction in the coming 10 years.”