Many farmers began selling their produce to agritech startups as regular markets shuttered during last year’s lockdown. Even after restrictions were eased, they continue to sell sizable portions of their produce to agritech startups. These startups are expected to have signed up hundreds of thousands of farmers since the pandemic started.
According to Venture Intelligence data, the volume of venture capital and private equity deals in the sector nearly doubled between 2018 and 2020. Against just 17 deals in 2018 worth $69 million, there were 32 deals worth $163 million in 2020. This year has seen half a dozen deals struck across categories.
Pune-based Agri10X, which offers a blockchain-enabled platform to connect farmers with buyers, is looking for an institutional funding round now. “From a business perspective, 2020 has proved to be lucky for us in terms of raising funds and we are already gunning for the pre-series round," CEO and co-founder Pankajj Ghode said. From being active in two states— Maharashtra and Bihar—the startup has expanded operations to six more states, including Uttar Pradesh, Madhya Pradesh and Tamil Nadu over the past 18 months. “We will soon expand our base to Dubai," he added.
Agri-trading marketplace Agribazaar, based in Mumbai, claims to have grown registrations on its platform 250% month-on-month over the past year. Chennai-based Waycool Foods & Products, which operates a supply chain for food and agricultural produce, said its revenues tripled during 2020-21. The startup is backed by investors such as Lightbox, Northern Arc Capital and Dutch development bank FMO. Arya Collateral Warehousing Services, an agri-fintech startup based in Delhi, said it added 15,500 new farmers and 70 new locations during the same period. Arya is backed by early-stage investors such as Quona Capital and Omnivore.
There’s a “habit shift" among farmers after protracted lockdowns, said Amith Agarwal, co-founder and CEO of Agribazaar. “We have seen farmers coming back to the platform and using our other value-added services like crop advisory, nutrient and seeds purchases, and farm equipment and allied services," he said.