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This reduction aligns closely with the global decline in agrifood tech investments, which fell by 50 per cent year-over-year

AgFunder and Omnivore have released the sixth India AgriFoodTech Investment Report, detailing just under $1 billion in startup investment, a 60 per cent year-over-year decline from $2.4 billion in 2022. However, India maintained a steady deal activity with 129 deals, only slightly fewer than in 2022. This reduction aligns closely with the global decline in agrifoodtech investments, which fell by 50 per cent year-over-year. 

Unlike the global market, however, the total funds raised by Indian agrifood startups were not far off from the $1.3 billion garnered in pre-Covid 2019, suggesting a normalisation of market conditions after a period of excessive valuations. A concerning trend is the limited participation of agrifood investors, with Omnivore being one of the few remaining, alongside generalist and climate-focused VCs. This scenario underscores the need for more committed investors across all stages. 

Below are some of the highlights of the report:

In 2023, Indian agrifood tech startups raised $940 million across 129 deals, down 60 per cent from 2022.

The number of deals remained almost flat with 129 closing in 2023 compared to 133 deals in 2022, indicating smaller deal sizes given the steep decline in dollars raised. 

More early-stage deals closed in 2023 than 2022 indicating continued interest by investors in the category but at much lower valuations than in previous years.

The median deal sizes dropped significantly year-on-year across stages and most dramatically at the late stages: 50 per cent at the early stages (Seed and Series A), 39 per cent at the growth stages (Series B and C) and 89 per cent at Series D and later.

Both AgFunder and Omnivore continue to explore deals that push beyond traditional agrifood boundaries into adjacent sectors, highlighting the growing interconnectedness of food, agriculture, and other industries like climate tech. Despite a decrease in the median deal sizes, the willingness to invest persists, although at lower ticket sizes, with Ag Marketplaces and eGrocery receiving the most attention yet again. However, there are fewer players in the market than before, reflecting Power Law dynamics.  

This reduction aligns closely with the global

Neatleaf technology has been developed over the last several years to detect plant issues even before the human eye can detect them

Neatleaf™, a first-of-its-kind cultivation management platform that uses data, AI, and robotics to help the cultivation industry manage their crops and improve their yields, has secured $4 million led by AgFunder, one of the world’s most active food tech and agtech investors.

The company’s flagship product, the Neatleaf Spyder, is a fully autonomous robotic platform that scans indoor cultivation crops generating millions of data points on plant health and growth metrics. This data is analyzed and turned into actionable insights for the cultivation team to assess, monitor, and remedy. “We believe that data is one of the most crucial tools a farmer can have today,” said Elmar Mair, Neatleaf Founder and CEO. “Our AI-driven technology will save growers time and money but more importantly, allow them to grow healthier, more profitable crops through daily management and forecasting tools. This funding will allow us to increase production and deliver the benefits of automation and AI to more growers.”

Neatleaf technology has been developed over the last several years to detect plant issues even before the human eye can detect them. The Spyder looks at every plant multiple times and can “go back in time” to show when a problem began. Data analytics can compare growth conditions across multiple growth cycles as well as across facilities which is crucial for crop steering and planning. With remote monitoring, growers can save travel costs and optimise an often overworked staff.

Neatleaf technology has been developed over the

India briefly overtook China in agrifoodtech investment, while Southeast Asia demonstrated significant potential with $1.7 billion in funding.

As the world’s largest region in both geography and population, with a vast network of smallholder farmers combined with dense urban settings and food sovereignty concerns, Asia-Pacific is a hotbed of opportunity for food and agriculture technology startups.

But in 2023, downstream food delivery and restaurant startups, once the darling of the region’s agrifoodtech ecosystem, fueling tens of billions of dollars of investment, are no longer so attractive to investors.

The new star of the ecosystem is upstream innovation, reveals a new report from leading agrifoodtech venture firm and research platform AgFunder, in collaboration with the Bill & Melinda Gates Foundation, Omnivore and AgriFutures Australia.

While total funding to the farm-to-fork agrifoodtech ecosystem dropped 58 per cent year-over-year (YoY) to $6.5 billion in 2022 from the record-breaking $15.2 billion raised in 2021, investment in startups operating upstream increased 24 per cent YoY. This increase appears to be continuing in 2023, according to preliminary data on 2023 funding flows.

This is good news for the 450 million smallholder farmers producing about 80 per cent of the region’s food. For the first time in years, upstream funding, which provides technologies to farmers and primary food producers, overtook downstream investment. The former raised $3.2 billion in 2022 versus the latter’s $2.7 million, according to the report.

The Ag Biotechnology category was particularly buoyant in the Asia-Pacific region in 2022, bringing in $813 million in funding, nearly half the amount raised globally in this category in 2022. While a couple of very large deals contributed to these totals, there was also greater deal activity in this segment, which includes on-farm inputs for crop & animal agriculture,” confirming investors’ growing interest in this space.

Innovative Food – the category housing the alternative protein industry – bucked the global decline in funding to the segment, with investment actually increasing year-over-year to $527 million, albeit over fewer deals.

Similarly, Farm Management Software, Sensing & IoT ($334m), Farm Robotics ($252m) and Novel Farming Systems startups ($254m), which include indoor farming and aquaculture and insect farming, brought in more funding across fewer deals.

China, meanwhile, lost its lead to India as the country attracting the most funding in 2022, likely due to the loss of downstream mega-deals that propped up China’s agrifoodtech investment in 2021. India’s lead looks to be short lived, however; in H1 2023, China grabbed the top spot back, raising $861 million.

The report includes deep dive sections on investment to startups in Australia, China, India, Indonesia and Southeast Asia. And spotlights on startups Zetifi, Integriculture, Eratani and Tablepointer.

India briefly overtook China in agrifoodtech investment,

Rising concerns around the impact of climate change on Indian agriculture have captured the attention of investors.

AgFunder and Omnivore have released the fifth India AgriFoodTech Investment Report, detailing $2.4 billion in startup investment, a 33 per cent year-over-year decline from $3.6 billion in 2021. The decline matches the global downward trend but there were bright spots where investors backed innovations focused on farmers and climate change.

Rising concerns around the impact of climate change on Indian agriculture have captured the attention of investors, catalysing efforts to deliver affordable mitigation and adaptation solutions for smallholder farmers.

Startups innovating upstream, closer to farmers and across the supply chain, bucked the downward trend witnessed globally, raising $617 million, up 50 per cent from $409 million in 2021.

Farmtech investment also remained relatively strong, raising $1.1 billion in 2022, only a modest 15per cent drop from 2021. Agribusiness Marketplaces & Fintech was the most popular upstream category among investors.

Investor interest in downstream, food delivery startups waned with consolidation and little new innovation.

Capital availability in India has tightened along with the rest of the world, although not as steeply as in developed markets. Indian venture investors remain bullish on upstream agrifoodtech innovations – those operating on the farm and in the supply chain – that offer deep moats and deliver affordable solutions to smallholder farmers. In contrast, despite attracting heavy funding over the past few years, investments in downstream startups plunged by 37 per cent in 2022 year-on-year. Once the pandemic lockdowns ended, many downstream ventures struggled to maintain the accelerated pace of growth created by Covid-19 in 2020 and 2021. A highly saturated home delivery market has further reduced investor interest. In the coming months, we expect fewer players to enter the downstream market and more M&A activity among existing companies.

Other key insights in the report:

  • The total number of deals declined to 133 in 2022, compared to 230 in 2021.
  • Meal Marketplaces and eGrocery were the most funded downstream categories yet again. The capital raised by these two categories accounts for 54 per cent of total funding in Indian agrifoodtech, with eGrocery startups landing the highest number of late-stage deals.
  • Downstream startups raised $1.7 billion in 2022, a 37 per cent decrease from $2.6 billion in 2021. Swiggy’s $700 million late-stage deal made up the bulk of investment in this category.
  • eGrocery startups raised $776 million across 20 deals, accounting for 32 per  of overall agrifoodtech funding in India.
  • Midstream Technologies deal activity decreased though the category remains active with $178 million raised across 14 deals.

Michael Dean, founding partner, AgFunder, said: “It is a challenging funding environment for startups globally and, as our report shows, India is no different. The relative increase in upstream financing is a welcome bright spot and reflects the urgency to fund technologies addressing the multiple inefficiencies in our food production and distribution systems that contribute to climate change and hunger.”

Mark Kahn, Managing Partner, Omnivore, said, “Across India’s agrifoodtech ecosystem, 2023 will stress test startups, while also being an ideal vintage for VCs who can enter promising deals at cheap valuations. Despite the transient headwinds, agrifoodtech in India will continue to surge ahead.”

Rising concerns around the impact of climate

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.”

Agribusiness Marketplaces overtook Midstream Technologies to become