Agritech deal value more than doubled to $500 Mn in 2020, may cross $10 Bn by 2030: FICCI report
While India has more than 600 agri startups attempting to solve challenges in the agri value chain, it accounts for merely 1 percent of the potential market opportunity of $24 billion. This indicates the potential for agri startups in the country, according to a FICCI-PwC report.
The report shows that despite the pandemic, investors pumped more than $500 million into agritech deals in 2020, as compared to $248 million in 2019.
With the significant rise in investment activity and considering the market potential of agritech in India, industry experts estimate there will be investments higher than $10 billion in the next 10 years.
The report was launched at the third edition of two-day “FICCI Summit & Awards for Innovations by Agri Startups” starting 9 February.
The summit gives a platform to agri startups to showcase their projects implemented on a range of issues impacting Indian agriculture and the allied sector. The summit saw brainstorming on how to fuel future growth of agri startups in India, impactful partnerships for the development of the agri startup ecosystem, policy push, and enabling farmers. PwC is the knowledge partner for the event.
At the inaugural session of the summit, TR Kesavan, Chair of FICCI National Agriculture Committee, highlighted that agri startups come up with brilliant ideas, but face issues in expansion and need a proper system to expand in India. He said that it is time to unleash the potential of startups in this space as they are going to put the money back in farmers' hands.
The 36-page report also cites a five-point agenda to further enable the government to bolster the agri startup ecosystem. The report says that in the future, the agri startup ecosystem will need impetus in key strategic areas such as infrastructural enablement, product innovation, supporting entrepreneurship and incubation, enhanced co-creations, and institutional support.
The five points on the agenda are
- Pacing development of an AgriStack: A nationwide single and unified digital agri database infrastructure could act as a one-stop solution and enabler for data requirements in the startup ecosystem. This, coupled with better data infrastructure, mobile literacy, and high-speed internet in rural India, will alleviate the infrastructure bottlenecks.
- Ushering in entrepreneurship and incubation: Ecosystem-level support in the form of agri business incubation centres, right mentorship, and a mix of technological and managerial assistance would help agritech startups leapfrog in their business.
- Co-creating through collaborations: There is a need to foster a win-win collaborative partnership between startups, farmer producer organisations, and micro, small, and medium enterprises to optimise profitability across value chains and ensure improved price realisation for small and marginal farmers.
- Product innovation: Agri startups need to collaborate and engage actively with banking and insurance companies and introduce crop and region-based credit and insurance products (agri-fintech solutions) in such a manner that small and marginal farmers get encouraged to readily adopt climate-resilient solutions. Agri startups can also innovate and customise tech solutions for quality assaying, traceability, and food safety. Product innovation strategies can be executed successfully through continuous engagement between startups and the government, and other facilitators in the ecosystem.
- Institutional support: To ensure requisite institutional support for agri startups, there is also a need for creating a dedicated agri startup cell at decentralized level to meet the requisite regulatory and ease of doing business requirements for startups.
Adding to the report launch, Ashok Dalwai, CEO of National Rainfed Area Authority under the Ministry of Agriculture and Farmers Welfare, said at the inaugural session that there is a need to re-mandate agriculture as a domain that is productive and can generate employment.
"We need to identify new biotechnology processes that will help the sector to move up and we need to focus on generating employment in the agriculture sector," he said.
Hemendra Mathur, Chair of FICCI Task Force, said the next decade will be a period for agri startups, with huge transformation in the food economy. He added that a lot of collaboration is needed between startups and small and medium businesses in the segment.