New report: India’s 60% drop in agrifoodtech investment is ‘a reversion to the mean’
Indian agrifoodtech investment drops 60% - new report AgFunderNews
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Indian Agrifoodtech Investment in 2023: A Report on Sustainable Development Goals (SDGs)
Disclosure: AgFunderNews’ parent company is AgFunder.
The investment in Indian agrifoodtech startups in 2023 followed a familiar pattern, as revealed in AgFunder’s 2024 India AgriFoodTech Investment report, produced in collaboration with Indian agrifoodtech investor Omnivore. The report emphasizes the significance of Sustainable Development Goals (SDGs) throughout the analysis.
Investment Trends
The investment in Indian agrifoodtech startups decreased by 60% compared to 2022, reaching just under $1 billion in 2023. This decline aligns with the global agrifoodtech investment trend, which experienced a 50% year-over-year decrease due to fewer and smaller deals.
However, Indian agrifoodtech stands out from the global scene as its deal activity remained relatively stable. In 2023, startups secured 129 deals, only four fewer than in the previous year. Moreover, the $940 million raised in 2023 is not significantly lower than the $1.3 billion raised in 2019, before the COVID-19 pandemic caused valuations to soar.
In contrast, global agrifoodtech investment in 2023 was 20% lower than both 2019 ($21 billion) and 2018 ($20 billion) levels.
Challenges and Opportunities
The report highlights some concerns, such as the absence of dedicated agrifood investors in India’s top investor list. This raises concerns for younger companies and ideas, as specialist funds like Omnivore and AgFunder tend to support early-stage startups.
On a positive note, the report emphasizes the blurring of boundaries between agrifood and other sectors, such as fintech, biomaterials, and diet-related healthcare. This integration is particularly significant in India, where the impact of climate change is more pronounced, and over 150 million smallholder farmers still struggle with outdated and inefficient production practices and supply chains. Recognizing the interconnectedness of agriculture, food, and other industries can bring more value and investment to the sector while promoting holistic, planetary health.
Examples of Sustainable Agrifoodtech Solutions
The report highlights two Indian agrifoodtech startups that exemplify the integration of sustainability goals:
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altM
Bangalore-based altM utilizes post-harvest crop residue as raw material for biochemicals and biomaterials. This approach provides an additional income stream for farmers by monetizing crop residues that would otherwise be burned or underutilized.
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LeadsConnect
LeadsConnect offers fintech services to create a more connected and sustainable supply chain, benefiting both farmers and consumers.
Key Highlights from the Report
- In 2023, Indian agrifoodtech startups raised $940 million across 129 deals, a 60% decrease from 2022.
- The number of deals remained relatively stable, indicating smaller deal sizes due to the decline in funding.
- Early-stage deals showed continued investor interest, but at lower valuations compared to previous years.
- The median deal sizes dropped significantly across all stages, with the largest decline at the late stages.
- All parts of the supply chain received less funding in 2023, with Midstream startups experiencing the greatest decrease.
- eGrocery remained the most funded category, although it experienced a 46% year-over-year drop to $420 million.
- Agribusiness Marketplaces & Fintech was the second best-funded category, raising $162 million, a 62% decline.
- eGrocery and Ag Marketplaces & Fintech accounted for 62% of the capital raised in 2023.
- Many later-stage startups raised follow-on bridge capital in 2023, resulting in smaller deals. This trend aligns with global agrifoodtech investment patterns, where later-stage startups faced down rounds and overall valuations were corrected.
Download the Full Report
For more detailed insights on Indian agrifoodtech startups in 2023 and predictions for the next 12 months, download the full report here.
SDGs, Targets, and Indicators in the Article
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 1: No Poverty
- SDG 2: Zero Hunger
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 12: Responsible Consumption and Production
- SDG 13: Climate Action
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
- SDG 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets, and opportunities for value addition and non-farm employment.
- SDG 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including through a focus on high-value added and labor-intensive sectors.
- SDG 9.3: Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets.
- SDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
- SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Number of deals and total funding raised by Indian agrifoodtech startups
- Percentage change in investment compared to previous years
- Percentage change in deal sizes across different stages
- Amount of funding received by different parts of the supply chain
- Percentage change in funding for different categories within agrifoodtech
- Number of early-stage deals indicating continued interest from investors
- Percentage change in median deal sizes at different stages
SDGs, Targets, and Indicators Table
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 1: No Poverty | Reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions. | Number of deals and total funding raised by Indian agrifoodtech startups |
| SDG 2: Zero Hunger | Double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists, and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets, and opportunities for value addition and non-farm employment. | Percentage change in investment compared to previous years |
| SDG 8: Decent Work and Economic Growth | Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including through a focus on high-value added and labor-intensive sectors. | Percentage change in deal sizes across different stages |
| SDG 9: Industry, Innovation, and Infrastructure | Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets. | Amount of funding received by different parts of the supply chain |
| SDG 12: Responsible Consumption and Production | Achieve the sustainable management and efficient use of natural resources. | Percentage change in funding for different categories within agrifoodtech |
| SDG 13: Climate Action | Integrate climate change measures into national policies, strategies, and planning. | Number of early-stage deals indicating continued interest from investors |
Copyright: Dive into this article, curated with care by SDG Investors Inc. Our advanced AI technology searches through vast amounts of data to spotlight how we are all moving forward with the Sustainable Development Goals. While we own the rights to this content, we invite you to share it to help spread knowledge and spark action on the SDGs.
Fuente: agfundernews.com
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