The unprecedented disruption caused by Covid-19 last hit most industries hard, except maybe the agri-tech sector which was actually fast tracked by the crisis year.
Agri-tech that broadly entails bringing in new age technology tools or platforms like Internet of Things (IoT), Artificial Intelligence (AI), data analytics, etc. in agricultural practices — including allied segments like dairy and fishery — has seen emergence of a new crop of entrepreneurs A spate of sizeable private investment deals in the second half of 2020 testifies their rising prominence.
In October FreshToHome, which has become a leading name in the home delivery of fish and chicken items in around 20 cities in India, had turned heads when it had raised $121 million in funding.
The company is now eyeing for pan-India expansion as well as larger presence in the UAE market, which is going to be a major hub for its future international growth.
In December, Noida-headquartered Arya, a post-harvest agri-tech and agri-fintech startup, announced raising $ 21 million. The company offers storage, warehouse management, finance support and market linkages to agricultural producers.
These are some noticeable deals covering firms which have attained a certain level of maturity, but there has been no dearth of small ticket-size investments flowing in the startups which want to make a difference to the agriculture business.
“Agri-tech sector has certainly become more attractive for the private investors. Problems in 2020 notwithstanding, agri-tech sector has been pushed to an inflection point,” said Jinesh Shah, Managing Partner, Omnivore Capital.
Omnivore Capital, in association with Accel, recently released a report which highlights the consistent growth of the agri-tech business in the last five years. It has, of course, grown on a small base but picked up considerable momentum rising from $45.8 million five years ago to around $430 million this year.
“If you include all allied businesses of agriculture, fresh investments in agri-startups will easily touch $700,” Shah said.
The major uptick in the investment quantum to the agritech firms has also been a function of their agile response to the agri supplychain disruption caused by Covid early this year.
According to the Accel-Omnivore report, “strong tailwinds formed by restricted movement, migration of labour, and increased consumer awareness of health, have helped escalate the adoption of technology throughout the farming ecosystem.”
The report further specifies that even in this troubled spell, agri-tech firms especially in horticulture business are expecting positive growth numbers this fiscal owing to the larger adoption of their services, indicative of their growing prominence.
Even as the Indian government is finding it difficult to convince the protesting farmers of staples from Punjab, Haryana, and other surrounding states that the farm bills adopted earlier this year are slated to change the fortune of the Indian agri-business going ahead, players in the agri-tech fray are making their presence felt in other ways too apart from drawing sizeable funding.
Hyderabad based SimplyFresh that specialises in the large scale farming of organic produce and medicinal plants last month unveiled the first phase of its precision farm project in the interiors of Telangana.
The project is billed to be India’s largest precision farm covering around 140 acres. “ We have just initiated production in 22 acres and have invested Rs 130 acre in this phase. The entire farm is expected to get ready by 2022 end,” says Sachin Darbarwar, CEO of the startup which was formed in 2014 and has raised around Rs 225 crore so far.
IFFCO-Kisan, the joint venture entity between fertiliser major IFFCO and telecom giant Bharati, has initiated similar large scale high-tech farm projects aligned more with its growing retail portfolio.
“We will be working on more of these projects and in the near run it will be centered around spices products which are going to be the main offerings of our retail basket,” Morup Namgail, Head (Agritech), IFFCO-KISAN recently told Indoasiancommodities.com.
For the established players in the agri-tech sphere, scalability is the prime consideration now. For instance, DeHaat, a technology based full stack platform covering inputs to market linkage value chain to its registered farmers ( about four lakhs currently) in four eastern states in India – Bihar, UP, Jharkhand and Odisha- is eyeing at having 10 million registered farmers and larger geographical footprint in the next five years.
Bangalore based Stellapps which is digitising Indian dairy supply chain using the larger IoT platform in different pockets in 18 states and handling nearly 11 million litres of milk is now aiming to align with FMCG firms and leading exporters in the dairy value added segment.
As circa 2021 sets in, the positive trends that emerged in the agri-tech play in India last year have almost created an unanimous feeling that the sector is poised for big-ticket growth in the near to medium run.
“The kind of innovations which have been happening in the backyards of leading agri-tech firms will have an exponential presence in the marketplace soon,” says Sunoor Kaul, Co-Founder & Director of Origo Commodities that specialises in post-harvest agriculture commodities management with presence in 12 states.
The company is now getting ready to launch its dedicated blockchain and later an e-auction platform before the end of this fiscal.
“We are noticing a great momentum in this space with Farmer Producer Organisations (FPOs) being formed at block levels, helping build the ecosystem for greater penetration of technology in the agriculture sector. Clearly, we see immense potential for AgriTech startups, which present a market potential of $ 24billion by 2025 as per a recent EY report,” adds Himanshu Goyal, India Business Leader, The Weather Company (IBM), which provides weather advisory services to many agritech startups.
Simply put, serious stakeholders are expecting action galore in the space in the coming years and their confidence may not be misplaced given the growing prominence of the horticulture business in the country which has shown more agility in embracing technology.