Skip to main content

Investments in Indian agri-tech start-ups fell by 45% in FY22-23. What next?, asks report

By Ayman Ujjainwala, E 

Investments in Indian agri-tech start-ups fell by 45% between FY22 and FY23, primarily due to a hike in global interest rates and heightened investor caution amid rising uncertainty. Meanwhile, global agri-tech investments declined by 10% between calendar years 2022 and 2023, reveals consulting firm FSG’s new report, `India’s Unfolding Agri-Tech Story: Updates and Emerging Themes in India’s Agricultural Technology Sector’.
While FY22 witnessed a boom in agri-tech start-up investments, which drove start-up valuations to unprecedented heights, the correction in FY23 has led to a more prudent investment climate.
In a positive trend, start-ups operating in the mid-stream agri-tech category in India are starting to mature, as the bulk of investments (~75%) in this space are now in growth (Series B and C) and late (Series D+) stages, FSG’s analysis shows.
FSG is a global mission-driving consulting firm that partners with corporations and foundations to create equitable system change. Its new report is a significant update to its insightful Agri-Tech Report 2022, What’s Next for Indian Agri-Tech?
The latest report delves into the dynamic changes that have shaped the Indian agri-tech landscape over the last year, providing valuable insights into investment trends, the evolution of agri-tech start-ups, and the growing emphasis on sustainable and climate-smart agriculture. Some of the key findings of the report are as follows:

Investment slowdown:

India’s agri-tech sector witnessed its most successful year in terms of venture capital funding in FY22, followed by a significant decline in FY23 amid a global funding slowdown. While the number of investment deals rose from 121 in FY22 to 140 in FY23, the total funding raised by agri-tech start-ups in India fell from US$1,279 million in FY22 to US$706 million in FY23.
Going forward, FSG expects the funding slump to continue into FY24 before springing back in FY25. It expects that start-ups will continue focusing on profitability to tide over the next financial year. Investors are likely to continue being cautious and direct their limited funding towards established business models, such as follow-on funding for companies in the mid-stream agri-tech category.

Mid-stream maturation:

Mid-stream tech has consistently had higher ticket sizes when compared with up-stream start-ups, starting in FY20. The report highlights that mid-stream agri-tech start-ups have begun to mature, with investments primarily in growth and late-stage funding rounds. For example, 56% of investments in start-ups focusing on output linkages and quality management were in their growth and late stages. The corresponding figure for other mid-stream start-ups, such as those offering agri-carbon or agri-fintech solutions, was as high as 91%.
Many midstream tech start-ups have also ventured into inorganic expansion through strategic acquisitions.
While the upstream tech category has seen a sharp rise in total investments over the last two years, early-stage deals (pre-seed to Series A) continue to be the dominant investment stage in this category, accounting for ~50% of total investment.

Traditional companies alter course:

Traditional agriculture companies expand their footprint across the value chain through inorganic growth, spin-offs, and pilot ventures. However, over the last two years, several key players announced plans to consolidate and streamline pilot projects and to try to refocus closer to their core business.
FSG expects this trend to continue into FY24, with traditional companies continuing to adopt a cautious approach and expanding into areas adjacent to their core business line, rather than placing big bets in new value chain stages where they have limited expertise, resources, and farmer networks.

Sustainability and climate focus:

Sustainable solutions and climate-smart agriculture have emerged as key focus areas in the Indian agri-tech sector, driven by a growing focus on environmental conservation and climate resilience, and supported by several government initiatives.
Start-ups must use periods of slower investment to refine their business models and drive towards profitability
Commenting on the trends identified by the firm, Rishi Agarwal, Managing Director, Head-Asia, FSG, said, “The shift in investment dynamics highlights the Indian agri-tech sector’s sensitivity to global economic trends. Start-ups must use periods of slower investment to refine their business models and drive towards profitability. These moments can be invaluable for building a robust foundation that can withstand market fluctuations.”
He added, “Those in the upstream agri-tech space can seize this moment to innovate and capture market share, while midstream start-ups must focus on sustainable growth strategies, leveraging their maturing status and acquisition capabilities. The decision by some key traditional agriculture companies to streamline pilot projects and focus on their core business suggests a need for a strategic pause to recalibrate their approach. This strategic shift must be executed thoughtfully to ensure they remain agile in responding to the evolving market dynamics. Balancing consolidation with continuous innovation is a tightrope they must walk.”
FSG’s report provides invaluable insights for industry stakeholders, investors, and policymakers seeking to navigate the evolving agri-tech landscape in India. With the data-driven analysis and forward-looking perspectives presented in this update, organizations can make informed decisions to thrive in this dynamic sector.
"With the government facilitating collectivization, mechanization, and digitization of Indian farms, there are plenty of emerging opportunities available for agri-tech innovations that address the key farmer problems of agro-climatic information, yield management, and price realization. Just like UPI facilitated a paradigm shift in the Indian financial sector, a unified digitized land and soil database can provide significant grassroots impact,” said Agarwal.
“The emphasis on sustainable solutions and climate-smart agriculture, bolstered by government support, signals a significant paradigm shift. Agri-tech’s transition towards sustainability isn’t merely a trend; it’s an absolute necessity. Innovations in sustainable farming practices and technologies are poised to be the driving force behind the sector’s future growth and resilience. Companies that prioritize eco-friendly solutions and climate-smart practices today will not only meet consumer demands but also ensure the long-term viability of the sector,” he added.



'Draconian' Kerala health law follows WHO diktat: Govt readies to take harsh measures

By Dr Maya Valecha*  The Governor of Kerala has signed the Kerala Public Health Bill, which essentially reverses the people’s campaign in healthcare services in Kerala for decentralisation. The campaign had led to relinquishing of state powers in 1996, resulting in improvement of health parameters in Kerala. Instead, now, enforcement of law through the exercise of power, fines, etc., and the implementation of protocol during the pandemic, are considered of prime importance.

Reject WHO's 'draconian' amendments on pandemic: Citizens to Union Health Minister

By Our Representative  Several concerned Indian citizens have written to the Union Health Minister to reject amendments to the International Health Regulations (IHR) of the World Health Organization (WHO) adopted during the 75th World Health Assembly (WHA75) in May 2022, apprehending this will make the signatories surrender their autonomy to the “unelected, unaccountable and the whimsical WHO in case of any future ‘pandemics’.”

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Bihar rural women entrepreneurs witness 50% surge in awareness about renewal energy

By Mignonne Dsouza*  An endline survey conducted under the Bolega Bihar initiative revealed a significant increase in awareness of renewable energy among women, rising from 25% to 76% in Nalanda and Gaya. Renu Kumari, a 34-year-old entrepreneur from Nalanda, Bihar, operates a village eatery that serves as the primary source of income for her family, including her husband and five children. However, a significant portion of her profits was being directed toward covering monthly electricity expenses that usually reach Rs 2,000. 

Work with Rajasthan's camel herders: German scientist wins World Cookbook Award 2023

By Rosamma Thomas*  Gourmand World Cookbook Awards are the only awards for international food culture. This year, German scientist  Ilse Kohler Rollefson , founder of Camel Charisma, the first of India’s camel dairies, in Pali district of Rajasthan, won the award for her work with camel herders in Rajasthan, and for preparing for the UN International Year of Camelids, 2024. 

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Why is electricity tariff going up in India? Who is the beneficiary? A random reflection

By Thomas Franco*  Union Ministry of Power has used its power under Section 11 of the Electricity Act, 2003 to force States to import coal which has led to an increase in the cost of electricity production and every consumer is paying a higher tariff. In India, almost everybody from farmers to MSMEs are consumers of electricity.

'Pro-corporate agenda': Odisha crackdown on tribal slum dwellers fighting for land rights

By Our Representative  The civil rights network Campaign Against State Repression (CASR), even as condemning what it calls “brutal repression” on the Adivasi slum dwellers of Salia Sahi in Bhubaneshwar by the Odisha police, has said that the crackdown was against the tribals struggling for land rights in order to “stop the attempts at land-grab by the government.”

Deplorable, influential sections 'still believe' burning coal is essential indefinitely

By Shankar Sharma*  Some of the recent developments in the power sector, as some  recent news items show, should be of massive relevance/ interest to our policy makers in India. Assuming that our authorities are officially mandated/ committed to maintain a holistic approach to the overall welfare of all sections of our society, including the flora, fauna and general environment, these developments/ experiences from different parts of the globe should be clear pointers to the sustainable energy pathways for our people.

Hazrat Aisha’s age was 16, not 6: 'Weak' Hadith responsible for controversy

Sacred chamber where Prophet and Aisha used to live By Dr Mike Ghouse* Muslims must take the responsibility to end the age-old controversy about Hazrat Aisha’s age at the time of her marriage to the Prophet (pbuh) – it was 16, not 6 (minimum was 16, Max 23 per different calculations). The Hadiths published were in good faith, but no one ever checked their authenticity, and they kept passing on from scholar to scholar and book to book.  Thanks to 9/11, Muslims have started questioning and correcting the Hadiths, Seerah, and mistranslations of the Quran. Now, the Ulema have to issue an opinion, also known as Fatwa, to end it and remove those Hadith entries. Mustafa Akyol, a scholar of Islam, implores Muslims to stop deifying “the received traditions” and critically study their religious past, shedding rigid legalism and close-mindedness. Someone else used the phrase “copycat Muslims” to identify scholars who copied what was given to them and passed it on without researching or questioni