The next wave of Investments in Agriculture: ‘AgriTechnology’

by Nitin Jain

Agriculture and technology are finally married; and the bond is expected to become stronger and more engaging with time. Five years back, agri technology was a new terminology in India, but today we are seeing several new entrepreneurs developing technologies transforming Indian agriculture as the Indian Farmer evolves. Also, new venture capital funds have come with a focus on the Indian Agritech sector.

The key driving force for this transformation at the grass root level has been the rapid growth of mobile internet users in rural India as smart phones have become more and more affordable. As per a recent report by Boston Consulting Group, there are nearly 120 mn mobile internet users in rural India today, which is expected to grow to 315 million by 2020. With the new generation taking over in rural India, adaptability to technology is much higher than we think, and the Indian farmer looks to transform his traditional farming methods.

Investments by Venture Capitalists in the sector has increased exponentially

The growing need for e-commerce in rural India has received keen interest from Venture Capitalists. In the last couple of years VCs have invested in nearly a dozen agri technology companies in India. The pace and quantum of investments seem to be increasing as some of the recipient companies have raised series B or series C. Most of these companies have a disruptive model for the traditional Indian agriculture sector.

Agrostar – ‘Building a Flipkart or an Amazon for farmers’

Pune-based Agrostar, a 3-year old start-up that sells agricultural inputs directly to farmers. The concept of creating an online marketplace is simple, tried and tested in urban India, but the challenge was how to develop such a marketplace for farmers located across remote villages across this large country and having limited or no access to technology. Agrostar started with a 1800-calling number facility, where farmers could give a missed call, and then later developed an Android-based mobile application. The farmer gets to choose agricultural inputs from a wide range of brands, is assured of authentic products and his order is delivered via India Post with cash paid on delivery.

The company focuses on a few states today like Maharashtra, Rajasthan and Gujarat and claims over 40,000 farmers are active on their m-commerce platform, and has served requests from over 700,000 farmers till date. The company has partnered with over 150 brands, including multinationals like Syngenta to provide raw materials, seeds, fertilizers and other agricultural inputs.

Average size of a transaction is nearly INR 1500-2000 and the company executes over 15000 transactions on a monthly basis. The company has received good interest from VCs and has raised several rounds of funding including a $4 mn raise last year, valuing this 36 – month old start up at over $12-15 mn (assuming dilution of 25-30%).

Cropin Technology – ‘Smart Farming for Corporates’

Bangalore-based startup – Cropin Technology – has created a technology platform for Corporates to make farming more accountable and efficient for them. The company provides Agriculture Farm Management, Monitoring and Traceability Solutions with data analysis aimed at improving farm efficiencies per acre. For any FMCG using Cropin, its contract farms or own farms are all tracked via satellite images, data and the images captured are analysed by plot or farmer, to provide a desktop view to the Farm Manager sitting in Mumbai or Delhi. This not only helps the Corporate plan its production but also the farmer, who is closely monitored and receives regular training and advice on improving his yield. Currently, in its operational span of 6 years, Cropin manages over 70+ variants of crops ranging from field crops, fruits and vegetables, plantations, spices, and seeds production. Over 500,000 farms have been digitized (via geo tagging) which further connect over 10,00,000 farmers and the company serves 60+ institutional clients, including companies like ITC Group, Pepsico, Rallis and Nuziveedu Seeds.

Below are some select VC funding deals in the agri technology sector in India in the last few years.

DateTargetInvestorAmount (INR mn)Description
Sep-16CropIn Technology SolutionsSophia Investment130Provides a cloud-based software platform to help farmers track their produce
Apr-16VegFru.comWingify SoftwareNAAn online B2B marketplace for fruits and vegetables, connects farmers to retailers such as restaurants, hotel chains, exporters, importers
Oct-15ZappfreshUnknown20The Company offers 40 items, including whole chicken, mutton and pork.
Aug-15AgrostarIDG Ventures, Aavishkar 260A mobile commerce firm that sells agricultural inputs directly to farmers
Jun-15EM3 Agri ServicesAspada Investments200Provides farm services using using modern agricultural machines and technologies
Apr-15YcookOmnivore PartnersUndisclosedY-Cook offers sweet corn kernels and cobs, baby corn, chickpea, and chutneys that stay fresh for 12 months without preservatives
Aug-14SkymetDaily and General Trust276Noida and Mumbai based weather forecasting services provider
Feb-14CropIn Technology SolutionsAnkur Capital5Provides a cloud-based software platform to help farmers track their produce
Nov-13Eruvaka TechnologiesOmnivore Partners50 The company makes on-farm diagnostic equipment for aquaculture farmers
Jun-13Barrix AgroOmnivore Partners50The company seeks to develop technology enabled cost effective solutions to reduce the use of pesticides in crop protection
Oct-12Frontal Rain TechnologiesOmnivore Partners50Offers supply chain software for agribusiness companies on the cloud

Note: Does not include deals in food and grocery e-commerce

In the last couple of years though less than $25 mn has been invested in agri-technology companies, we believe that with some companies like Skymet, Agrostar and Cropin several rounds of investment has happened and the companies have grown bigger in size with good acceptability from farmers.

Global Investments in Agriculture Technology Start-ups

Globally, Venture Capitalists invested $4.6 billion in 2015 in agriculture technology companies, nearly doubling 2014 levels ($2.36bn), and over 10 times more than it was in 2012.


Source: AgTech Investing Report for 2015

Though the investment is still very small as compared to investment in Technology or other sectors, it is gaining traction. Global venture capital investments cooled down a bit in the first half of 2016 on account of pullback in funding to Food E-Commerce and Drones startups, however, investments in other subsectors, such as Soil & Crop Technology, Biomaterials & Biochemicals, Precision agriculture grew handsomely.


The eco-system for agri-start-up has evolved in recent times as some incubation centres and funds have been introduced in the sector. Today there are a handful of agri technology focussed funds in India like Omnivore, Aavishkaar, Aspada etc.

However, Indian VC investments in agri technology are miniscule compared to their global peers. Given a growing population and limited increase in land acreage possible, the country will have to rely on improved crop productivities to feed the population. Agricultural technologies will play an important role in that.

We strongly believe that the sector will attract much more and substantial investments going forward. Also, we think investments will cover across the range of innovative products and services in the agri supply chain, as more and more entrepreneurs take a plunge to develop newer technologies despite all odds and uncertainties in the agriculture sector in India.

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