India’s agrifoodtech sector attracts $2.4b VC funding in 2022: report

Venture capital investments in India’s agrifoodtech startups totaled US$2.4 billion in 2022, according to a recent report by AgFunder and Omnivore.

The figure represents a 33% year-over-year drop from US$3.6 billion in 2021, aligning with the global downward trend in startup funding.

Despite the overall decline, the report highlights that investors still exhibited a keen interest in backing services focused on farmers and addressing the challenges posed by climate change.

Growing concerns over the impact of climate change on Indian agriculture have spurred investors to seek affordable mitigation and adaptation solutions for smallholder farmers.

Startups operating closer to farmers and along the supply chain still managed to raise US$617 million in 2022, a 50% increase from US$409 million in 2021.

However, India saw a 37% decline in investments in downstream startups in 2022 compared to the previous year.

Meal marketplaces and e-grocery emerged as the most funded downstream categories, accounting for 54% of total funding in the country’s agrifoodtech sector. Among these categories, e-grocery startups secured the highest number of late-stage deals, raising US$776 million across 20 transactions, representing 32% of overall agrifoodtech funding in India.

However, investor interest in certain downstream categories, particularly food delivery, has waned due to industry consolidation and a lack of new innovations.

Mark Kahn, managing partner at Omnivore, said that 2023 will be a “stress test” for agrifoodtech startups in India, but it also serves as “an ideal vintage for VCs who can enter promising deals at cheap valuations.”

See also: Mapping Indonesia’s key agritech players (update)