India's agritech sector is rapidly evolving, with 19 soonicorns and 40 minicorns embracing emerging technologies like AI to boost growth, according to a recent report by the Reserve Bank of India (RBI). These startups are on track to bridge the technology gap in agriculture and transform the sector.
Although only one agritech unicorn has been identified in India, the number of soonicorns (startups close to becoming unicorns) and minicorns (early-stage startups) is substantial. The RBI paper, titled “Agri-Tech Startups and Innovations in Indian Agriculture,” highlights the impressive potential within the industry.
A survey of agritech startups revealed their dependence on government funding, research and development, and state-supported digital infrastructure for expansion.
Investment in India's agritech sector has grown significantly, from $370 million in 2019 to $1.25 billion in 2021. However, this growth slowed after 2021, in line with global trends. On the global stage, agritech funding peaked at $10.9 billion in 2021 and 2022, only to drop to $5.2 billion in 2023.
When it comes to funding share, the United States leads with 43.2%, followed by China at 14.4%, Canada at 12%, and India with 8.5%. This shows that India’s agritech ecosystem has garnered a significant portion of global funding.
The central government has been instrumental in fostering agripreneurship and innovation by reducing regulatory barriers, developing innovation-driven infrastructure, and encouraging collaboration among entrepreneurs. This has helped create a strong foundation for the growth of the agritech sector, including the development of an “agri-stack.”
Emerging technologies like the Internet of Things (IoT), artificial intelligence (AI), big data analytics, blockchain, drones, and biotechnology are gaining traction among agritech startups. Government initiatives like Digital India, Make in India, and various startup funds and accelerator programs have also played a crucial role in boosting the industry, especially during the pandemic.
Despite the growth, the RBI paper highlighted significant challenges for agritech startups, including the need for modern technologies among farmers, fragmented landholdings, insufficient funding, and longer timelines for revenue generation. These factors pose hurdles to scaling operations and ensuring the long-term sustainability of these startups.
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