Funding for early-stage agritech startups is expected to grow in 2023
Investors were cautiously optimistic about Indian agritech in the second half of 2022. This is likely to continue in the new year, especially for mid- to late-stage deals. Early-stage funding, on the other hand, is expected to grow as the sector adopts technology more quickly.
‘Agritech investments in 2022 were somewhere between $700 million and $800 million, compared to $1.18 billion in 2021,’ said agritech investor and industry expert Hemendra Mathur. This correction is mostly because investors are being careful because of how the global economy is doing right now, even as they look for models that will be profitable and last.
Choices that look good
Even though valuations are starting to go down, which is expected to slow the closing of late-stage deals worth more than $50 million, early-stage funding in agritech is still attractive. ‘Early stage deals like seed, angel, and pre-series funding will pick up speed because of things like the high quality of new entrepreneurs, the quality of early stage deals, the support of public policy, and the many opportunities in the sector,’ said Mathur.
The ₹500 crore fund that the government is setting up to help with the development and adoption of new ideas will give a boost to the agritech sector in the coming year, making it more appealing to investors. Mathur said, ‘Now is a good time to get into the sector, and many venture capitalists, angel investors, and early-stage investors are getting ready to invest in it.’
Pay attention to smallholders
The co-founder and CEO of CropIn, Krishna Kumar, thinks that some important agri-food trends will speed up in 2023. ‘Investments in agri-financing and sustainability will skyrocket, and the digitization of agriculture will speed up to make food systems as clear and visible as possible. More attention will be paid to empowering small-scale farmers, building food self-sufficiency, reducing food waste, and using regenerative agriculture to stop soil degradation,’ he said.
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‘It is very likely that 2023 will be a year of changes and transformations in how technology is used and adopted across the agricultural spectrum. Artificial intelligence, data analytics, the Internet of Things, drone technology, and digital apps and platforms that are at the cutting edge of agritech will start to be used. The terms agri-fintech and agri value chain will be big in the coming year. These will help farmers connect with different players in the agriculture ecosystem.’ CMD of Leads Connect Services Pvt. Ltd., Navneet Ravikar, said.