Venture capital (VC) investment in India’s agrifood sector reached $4.6 billion in FY 2021-22, up 119% from $2.1 billion in the previous fiscal, according to a joint report by AgFunder and Omnivore.
The joint report further states that India overtook China as Asia-Pacific's biggest funder of agri and foodtech innovation.
In an exclusive interaction with VCCircle, Mark Kahn, managing partner, Omnivore, said, “The tailwinds which propelled the investments in India’s agrifood sector includes increasing interest from generalist VCs, good number of founding teams joining the space and also establishment of a lot of digital and payment stacks by these agri-based startups are also gaining traction from the investors.”
He added that the deal activity also jumped from 189 to 234 in FY22 as compared to the previous fiscal.
The cumulative funding also got a push from big deals in downstream food delivery categories, while technologies operating closer to the farm closed more deals, the report further said.
Farmtech startups raked in close to $1.5 billion across 140 deals, a 185% growth on year-over-year.
In the wake of Covid-19 pandemic, food delivery services inflated total investment level, with restaurant marketplaces and e-grocery startups securing close to $3 billion, which is around 66% of total investment in FY22.
E-grocery startups raised $934 million across 42 deals, a 4x jump from $244 million across 25 deals in FY21, the report said.
For the second year in a row, upstream surpassed the downstream in number of deals. In FY22, the upstream deals were closed at 121 against 113 downstream deals.
Agribusiness marketplace overhauled midstream technology to emerge as the most funded upstream segment in FY22.
“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,” said Michael Dean, founding partner, AgFunder.
In a September report by Kalaari Capital, precision agriculture and aquaculture attracted about 23% of the total $1.6 billion capital VCs poured into agritech in FY22.