As the agritech sector booms with $4.5-billion investment with a potential to receive another $10 billion, investors have started looking at the next potential area where the money could be put in and biotech is one such territory where the country has a lot of potential.
Addressing the businessline Agri & Commodity Summit 2023 in New Delhi, Subhadeep Sanyal, partner at Omnivore, said the number of agritech start-ups has increased to about 2,000 from 30-40 in the past decade and all the funds have invested minimum 5 per cent of their portfolio in the farm sector.
Listing out different phases of the investment received in the agriculture sector, Sanyal said if the first phase (before 2015) was mainly related to hardware, in the second phase (2015-19) the digital platforms witnessed a boom from the funding received and the next area could be agri biotech.
Easy money drying out
He also said consolidation at a big level that will shake up the agri-tech industry, is yet to happen, though some reports of the acquisition have started to appear. People are aware that it requires lesser capital to start a business in India, Sanyal said, adding, “We have also seen a shift in Series sizes. Easy money is drying out. But there is enough capital that will come in over the next four years.”
However, the expectation is now that companies will have much stronger unit economics, he said. “We haven’t seen funding been struck off in a big way,” Sanyal said.
Karthik Jayaraman, CEO, WayCool, said it was time that fund managers keep in mind the gestation period in the farm sector. He said his company has demonstrated through partnering with farmers on over 500 acres in Krishnagiri district that sustainable agriculture is equally profitable with lower input costs. He also said through technology infusion WayCool has reduced post-harvest losses in fresh produce to 0.7-4 per cent against national average of 14.7-18 per cent.
Drone carnivals
There is no easy money to fund Shah Rukh Khan ads, so companies are now working on their unit economics, business models, said Agnishwar Jayaprakash, CEO, Garuda Aerospace. He said drone manufacturers see a brighter prospect as companies have started hiring for services like data collection. “You now have a Loan for Drone scheme and it will see quick adoption of the technology,” said Jayaprakash.
Further, he said taking a drone out on the fields is like a carnival for farmers. But drones are going to be super-computer on wings and will go far beyond spraying of pesticides or data capturing.
Harendra Kumar, Vice-President, DeHaat — an agtech company with a presence in 150 districts with 700 institutional partners — said for any company working across multiple value chains, it’s difficult to get multiple licenses across districts in the same State. So some uniformity and stability in policy is required.