Investments in Agri sector technology

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In the last 18-24 months, the Agri technology sector has seen large investments focused on transforming this traditional sector. Historically, the sector witnessed a handful of funding transactions in a year, with most of the investments in conventional segments like agrochemicals, water and irrigation companies, animal health companies and dairy companies. 

Over the last couple of years, there has been an exponential flow of investments in the agri-tech sector, which is transforming the industry completely.

In the last few months, both the frequency and ticket size of investments in the Agri sector has increased. We have tabulated below a summary of the top 5 investments by venture capital funds in the sector in the last few months that have amounted to over $500 million.

The strengthening of the supply chain management is slowly changing the traditional supply chain of the big fat middlemen. Direct procurement of vegetables, fruits and other items is leading to higher pricing for the farmers and lowering the wastage losses

For example, Ninjacart raised $145 mn from Walmart and Flipkart recently, works closely with the farmers to procure fruits and vegetables from them. It claims to have coverage of over 1 lakh farmers across 150 villages.

Similarly, WayCool Foods, a start-up that sources farm-sourced fruits, vegetables and other products from farmers, distributes these products to kirana stores, modern retail stores, and contract manufacturing units, hotels and restaurants.

New technologies being introduced like enhancing traceability of produce or database for dairy farmers to track vaccinations, feed etc for their animals or providing real-time farm data and insights will go a long way to enhancing productivity, pricing for farmers and revolutionizing the Indian Agri Sector.

The demand-side drivers such as evolving consumer dynamics towards consuming healthier food due to increased awareness and urbanization, focus to reduce food wastage in India, environmental factors such as climate change and water shortage are helping drive the adoption of agritech in the country.

 However, despite the strong investment activity in the last few years, the market penetration in the sector is still low. Also, I believe that the solutions to challenges in Indian agriculture need to be inclusive of the needs of the small and marginal farmers that comprise a lion’s share of India’s farm holdings. 

The momentum of investments in the Agri sector will facilitate the Agri tech companies to fast develop scale and tap the large market potential and opportunities in the Agri sector going forward over the next 5-10 years.

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