India has overtaken China as Asia-Pacific’s biggest funder of agrifoodtech innovation, attracting record investment during April 2021 to March 2022, according to AgFunder and Omnivore’s fourth India AgriFood Startup Investment Report.

The report shows $4.6 billion investment in the Indian agrifoodtech ecosystem in the fiscal ending March 2022, an increase of 119 per cent over the previous year’s $2.1 billion. Deal activity also increased to 234 in FY2022, compared to 189 deals in FY2021

Jumbo deals in downstream food delivery categories bolstered funding totals while technologies operating close to the farm closed more deals. Downstream startups raised $3.8 billion in FY2022, a 115 per cent increase from $1.77 billion in FY2021. This significant growth is due to Swiggy, which raised $1.2 billion, accounting for 38 per cent of total investment in Indian agrifood startups.

Michael Dean, founding partner, AgFunder, said: “India has always been a leading agrifoodtech ecosystem, ever since AgFunder and Omnivore started in the early 2010s, but to see investment levels surpass all other countries in the Asia-Pacific region and compete on the global stage is indicative of the impressive range and depth of innovations coming from the country and potential to impact the agrifood industry as a whole.”

Farmtech startups raised $1.5 billion across 140 deals, a 185 per cent increase over previous year’s $527 million. 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.

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‘No longer niche’

“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,” said Mark Kahn, Managing Partner, Omnivore.

Agriculture is the backbone of India’s economy and has to sustain its 1.4 billion population. 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, the report said.

The restaurant marketplace and e-grocery were the most funded downstream categories,accounting for 84 per cent of total downstream funding, with e-grocery startups landing the highest number of late-stage deals. e-Grocery startups raised $934 million across 42 deals, a four-fold jump from $244 million across 25 deals in FY2021.

The investment in online restaurants and meal kitssaw a remarkable recovery at $301 million in FY2022, almost four times more than $64 million in FY2021. The premium branded food and restaurants categorysaw a marginal 9 per cent increase in funding.