Funding in Indian agrifoodtech startups declined 33 per cent during the last calendar year to USD 2.4 billion on higher base, according to AgFunder and Omnivore joint report.
"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.
The funding stood at USD 3.6 billion during the 2021 calendar year.
"The agrifoodtech startup ecosystem in India mirrored the global slump in venture capital funding in 2022. Funding dropped 33 per cent to USD 2.4 billion in 2022, from USD 3.6 billion in 2021. Euphoric startup valuations, alongside easy money, drove investments to a record-breaking high in 2021, followed by a swift correction," the report said.
Despite the fall, it noted that the sector is a critical emerging space in India for transforming agriculture and ensuring food security.
As per the report, late-stage investments dropped by 34 per cent and early-stage registered a 46 per cent decrease. Growth-stage deals showed comparative stability with an 8 per cent decrease in capital flow.
On investments by supply chain, the report said that "downstream startups raised USD 1.7 billion in 2022, a 37 per cent decrease from USD 2.6 billion in 2021. Swiggy's USD 700 million late-stage deal made up the bulk of investment in this category".
Startups innovating upstream, closer to farmers and across the supply chain, bucked the downward trend witnessed globally, raising USD 617 million, up 50 per cent from USD 409 million in 2021.
Midstream Technologies deal activity decreased, though the category remains active with USD 178 million raised during the last year, compared to USD 506 million 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.