Indian Agrifoodtech Startups Experience 33% Funding Decline to $2.4 Billion in 2022
- ByStartupStory | May 24, 2023
According to a joint report by AgFunder and Omnivore, funding for agrifoodtech startups in India saw a 33% decline to USD 2.4 billion in the previous calendar year, primarily due to a higher base.
“Agrifoodtech startups in India raised a total of USD 2.4 billion in 2022, down 33 per cent from 2021. The number of deals also declined to 133 in 2022, compared to 230 deals in 2021,” said India AgriFoodTech Investment Report 2023.
According to a report, the agrifoodtech startup ecosystem in India experienced a decline in venture capital funding during the 2022 calendar year. The funding dropped by 33% to USD 2.4 billion, compared to the previous year’s figure of USD 3.6 billion. The report highlighted that the decrease in funding was a reflection of the global trend and was attributed to the correction following the high valuations and abundant investments in 2021.
Despite experiencing a decline in funding, the report emphasizes the significance of the agrifoodtech sector in India as a crucial emerging space for agricultural transformation and food security. The report reveals that late-stage investments witnessed a 34% drop, while early-stage investments saw a 46% decrease. However, growth-stage deals remained relatively stable, experiencing only an 8% decrease in capital flow.
According to the report, investments in the supply chain segment of agrifoodtech startups showed contrasting trends. Downstream startups experienced a 37% decrease in funding, with USD 1.7 billion raised in 2022 compared to USD 2.6 billion in 2021. Notably, a significant portion of this category’s investment was contributed by Swiggy’s late-stage deal of USD 700 million. Conversely, upstream startups, operating closer to farmers and spanning the entire supply chain, defied the global downward trend by securing USD 617 million in funding. This marked a notable 50% increase from the USD 409 million raised in 2021.
Although deal activity in Midstream Technologies witnessed a decline, the category continues to be active, raising USD 178 million in the last year. This amount represents a decrease from the USD 506 million raised in 2021.
“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 moats and deliver affordable solutions to smallholder farmers,” a company statement said.
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