Agribusiness Marketplaces overtook Midstream Technologies to become the most funded upstream category in FY2022.
India has overtaken China as Asia-Pacific’s biggest funder of agrifoodtech innovation, attracting record levels of investment in the fiscal year April 2021 to March 2022, according to AgFunder and Omnivore’s fourth India AgriFood Startup Investment Report. With $4.6 billion in agrifood venture capital investments in FY2021-22, India’s agrifood ecosystem is finally receiving the funding required to tackle the challenges faced by smallholder farmers, rural communities, agricultural value chains, and food systems.
As with other parts of the world and particularly in the wake of Covid-19, food delivery services inflated total investment level, with Restaurant Marketplaces and eGrocery startups securing close to $3 billion – around 66 per cent– of total investment in the fiscal year (FY) ending 31 March 2022. But increasing deal activity for upstream innovations shows promise.
Other key insights in the report:
- Total investment in agrifoodtech startups for India’s FY2022 stood at $4.6 billion, up 119 per cent from $2.1 billion in FY2021.
- Deal activity also increased to 234 in FY2022 compared to 189 deals in FY2021.
- Agribusiness Marketplaces overtook Midstream Technologies to become the most funded upstream category in FY2022. The former raised $569 million in FY2022, a 7x jump from the $86 million raised in FY2021.
- While Midstream Technologies remains an active category with $461 million raised across 19 deals, the number of deals declined. This is indicative of multiple sub-categories including logistics, transport, and B2B retail achieving maturity.
- Ag Biotechnology emerged as a fast-growing upstream category, raising $114 million in FY2022, a sharp increase from $5 million in FY2021.
- Farmtech startups closed $1.5 billion in funding, a 185 per cent increase on the $527 million raised in FY2021. Rapidly improving technology adoption buoyed this segment of agrifoodtech, together with steady demand for traceable quality produce, encouraging innovations aimed at ironing out chronic inefficiencies.
- Restaurant Marketplace and eGrocery were the most funded downstream categories, accounting for 84 per cent of total downstream funding with eGrocery startups landing the highest number of late-stage deals.
- eGrocery startups raised $934 million across 42 deals, a 4x jump from $244 million across 25 deals in FY2021.
- Investment in Online Restaurants & Meal Kits saw a remarkable recovery at $301 million in FY2022, almost 4x more than $64 million in FY2021.
- Upstream investment leapt 300 per cent to $1.2 billion up from $312 million. The participation of generalist VCs, bigger deals sizes, and higher deal count contributed to this increase.
Mark Kahn, Managing Partner, Omnivore, said, “The investment trends are proof that the agrifoodtech space can no longer be called niche. It has caught the attention of generalist VCs the world over who understand that agrifoodtech is key to the transformation of India’s massive agricultural sector and rural economy.”
