Indian Agrifoodtech Startups Raise $2.4 Billion In 2022: Report India became the second-best funded market for agrifoodtech startups in 2022, after the US and overtaking China for the first time, as per the report
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AgFounder and Omnivore have released the India Agrifood Startup Investment Report for 2023 that detailed $2.4 billion in startup investment, a 33% year-over-year decline from $3.6 billion in 2021. As per the report, the decline matches the global downward trend but there were bright spots where investors backed innovations focused on farmers and climate change.
While funding to startups in downstream and midstream categories fell 37% and 65% respectively in 2022, investments rose 50% in upstream categories in India, which is expected to overtake China as the world's most populous country this year. Furthermore, India became the second best funded market for agrifoodtech startups in 2022, after the US and overtaking China for the first time, as per the report.
Highlighting more insights, the report revealed that, startups innovating upstream, closer to farmers and across the supply chain, bucked the downward trend witnessed globally, raising $617 million, up 50% from $409 million in 2021. Adding on, farmtech investment also remained relatively strong, raising $1.1 billion in 2022, only a modest 15% drop from 2021.
"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," said Michael Dean, founding partner at AgFunder
As per the report, 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.
"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," said Mark Kahn, managing partner, Omnivore.