Economic Survey 2023: Private equity investments in agritech surge 50% in four years

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Private equity (PE) investments in agritech skyrocketed over the past four years with an increase of more than 50 percent per annum, the government noted in its pre-budget Economic Survey on January 31, at a time when the rising demand for quality food, and macro tailwinds like climate change and food security concerns trigger renewed investor interest in the nascent sector.

According to the survey, the increase in private equity investments aggregates about Rs 6,600 crore annually. The survey highlighted that there are over 1,000 agritech startups in India that assist farmers in improving farming techniques.

“This is slowly gaining acceptance with farmers… Crop yield prediction models using artificial intelligence and drones for monitoring soil and crop health have been initiated. Smart farming also enables crop diversification, which will help farmers reduce their dependence on monsoons for water,” said the government, in the survey.

According to updated data by Venture intelligence, agritech startups raised a total of $515 million in private equity and venture capital in 49 deals in 2022, a spike of over three times from $161 million raised by agritech startups in 2020, showing how investments in the sector are above the pre-pandemic levels.

Moneycontrol earlier reported how with private equity and venture capital investors shifting focus towards profitability, biggies in sectors like edtech, e-commerce, and fintech – the poster boys of 2021’s startup bash, had to take a step back to re-evaluate their strategies and align themselves to the fundamentals.

Meanwhile, for the agritech ecosystem that witnessed valuations shooting up and continued funding with unwavering investor interest, there seems to be no end to the party.

The report also said that more than 500 startups in India are working in the millet value chains, at a time when the United Nations General Assembly, in its 75th session during March 2021, declared 2023 the International Year of Millets (IYM)

Notably, the Indian Institute of Millets Research has incubated 250 startups under Rashtriya Krishi Vikas Yojana – Remunerative Approaches for Agriculture and Allied Sectors Rejuvenation (RKVYRAFTAAR), the government added in the survey.