Advanced technologies have benefited up and coming organisations in the information technology, e-commerce and digital services space in India for a long time. Many startups have secured large funding over the years in those areas.
Now, it seems that the agritech is proving to be the next big space for startups. This is evident from the fact that Indian agritech startups received funding worth $248 million as of June 2019, which is a 300% increase as compared to the previous year, according to a recent National Association of Software and Service Companies (NASSCOM) report.
Growing at a rate of 25% year on year, India presently has more than 450 start-ups in the Agritech sector. It is reported that B2B agritech startups in the country are fast-maturing and generating decent revenue by making use of advanced technologies. This has attracted direct global and sector focused funds.
What Problems Are Agritech Startups Solving Using Advanced Tech?
There are a bunch of startups out there in rural India, who are creating solutions so that farm losses can be eliminated. Annual post-harvest losses are estimated to be about ₹90,000 crore in India. This is due to the mismanagement of resources, a lack of basic infrastructure and a bad supply chains. This is the reason why more than half of overall funding in 2019 went to agritech startups with solutions related to market linkage and digital agriculture services.
Here, many startups are striving to create supply chain efficiency across all the farming processes. For example, Ninjacart, which is India’s largest B2B fresh produce supply chain startup. It has created a direct linkage between the farms and groceries and helped farmers realise 20% more revenue than the existing market.
While one set of startups are working on enhanced supply chains, others are using big data analytics and artificial intelligence to optimise farm management. One of the important things to help derive better farming strategies is the extensive use of data, and data being collected through IoT sensors is being being analysed for anomalies and patterns. This is a valuable process to help farmers be ready for adverse weather phenomena, prevent spoilage and ensure the good health of crops. And there are startups doing exactly that.
Gramophone, a startup that provides actionable insights to farmers with the help of an app via a phone and a call centre, raised 3.5 million from InfoEdge. The startup reported using the portion of the funds specifically for data science. There are also specific investor funds that primarily focuses on data-driven agritech startups working to create operational efficiency in the farms, such as the Rabo-Caspian Agtech Financing Fund created by Netherlands-based Rabobank in partnership with Caspian investment group.
Then there are startups focused on the financial aspect of farming. Such startups are striving to help farmers in their financial challenges through their digital lending platforms. One example is Gurugram-based farMart which offers cashless credit to small farmers. The startup has created a 50-point credit assessment algorithm for agriculture loans. Other kinds of innovations that have attracted funding include image sensing for quality assessment, storage monitoring based on the Internet of Things and the digitisation of local markets.
With public-private partnerships and government support, several Indian states have established Agritech policies. Factors such as the availability of good quality farm data, better regulatory environment for startup funding, and cheap internet connectivity are some of the crucial factors leading to a thriving startup ecosystem in the agritech the last few years. The rising farm incomes over the decade has also enabled farmers to try experimenting with new technologies to enhance their yields.
All of this has unleashed a fresh wave of entrepreneurship in the country that is focused on creating value for one of India’s sector that employs the most number of people. With the given pace of investments, Agritech sector may soon take the centerstage of India’s transformation.