Let us talk about the agritech industry and how it has bought a change in the traditional agricultural industry of the country. India is an agricultural country, it is a source of employment and livelihood to about 58% of the population of the country. This sector is a contributor to about 17.8% of the gross value added in India in the financial year 2020-2021.
Looking back to the history of agriculture, it has come a long way. Initially, agriculture in our country had focused on making sure that there was food security and now it has become the major source of food producer in the world. The food processing industry of India is one of the largest and is contributing to around 32% of the total food market of the country.
The number of exports of the country in this industry has increased during the year 2020-2021. The Ministry of Commerce & Industry has said that the export of agricultural and related products has increased by 17% in the year 2020-2021, which for the previous three years was stagnant and still. The agricultural demand of the country is growing and it is expected that by the year 2030 India will have the largest population in the world, and will be one-third of Asia and 17% of the world. This will lead to shifting in the agricultural output.
Technology has entered the agriculture industry. Artificial intelligence, the Internet of Things, Big Data, Machine Learning, are transforming the sector by bridging in high productivity, better quality, increasing profits, and reducing the carbon footprint. The technology if used wisely brings in a solution to the existing problems of the industry.
Some of the problems along with the solutions the agritech brings are mentioned below-
Inaccessible Conditions- The solution for this are drones
Lack of assessment of crop health in real-time- The solution for this is satellite imagery
Lack of quality assessment- The solution for this is the smart supply chain
Presence of middlemen- The solution for this is the farm-to retail linkage
Real-time feedback of the techniques used by farmers- The solution for this is Big Data Analytics
Determination of optimal time to plant- The solution for this is the Mobile application for sowing
Growing Agritech market in India
India has seen a boom in some sectors of the economy. Edtech, fintech, and agritech are those sectors. Many investors and venture capitalists are showing a great interest in these sectors. The agritech sector is booming because of the opportunity of the entire value chain. But the agritech sector in the country is at a very young stage. It is open for opportunities that bring in new and advanced technology and different and innovative solutions.
The already existing names in the agritech industry are- Gramophone, Bijak, Onato, Agrostar, Reshamandi, BharatAgri, and TartanSense.
The agriculture industry today in India is about USD 5 trillion and will change in the next 5 years by the entry of new agritech startups. The Indian agritech industry has 600-700 startups that have shown growth. The report published by Ken Research says that the agritech market in India is expected to grow at a CAGR of 32% from FY 2020 to FY 2025.
Announcement of the funding of agritech startup
The startup, DeHaat, has raised a funding of USD 115 million, as announced on October 27, 2021. This round of funding was the Series D round of funding and was led by Sofina, which is an investment firm based in Belgium, and Lightrock India. Temasek, which is a Singapore government investment fund, also co-invested in this round of funding. The other participants of this round of funding were the existing investors of the startup- Prosus Ventures, RTP Global, Sequoia Capital India, and FMO.
The startup plans to utilize the funds raised for the expansion of the network, to increase the technology interface, and to grow value-added services. It will also use the portion of funds in hiring new people for employment purposes. With this round of funding, the total funds raised by the startup have increased to USD 157 million and the valuation has increased three times from the last valuation of USD 158 million to around USD 450 million, up from the last valuation of 158 million.
About the newly funded agritech startup
The startup, DeHaat was founded in the year 2012 by alumni from IIT Delhi, IIT Kharagpur, IIM Ahmedabad, and other top institutes, the startup is one of the largest growing startups in the agritech industry and one of the very few companies providing end-to-end solution and services to the farming community in India. It is building AI-enabled technologies to revolutionize supply chain and production efficiency in the farm sector.
It is currently operating in Bihar, Uttar Pradesh, Odisha, and West Bengal. It has around 350,000 farmers in the service network and the goal of the startup is to bring the services to 5 million farmers by the year 2024. It is now a fully funded startup with a growth rate of 3-4X annually. The impact created by the startup has been phenomenal and has been recognized and felicitated by NASSCOM, Forbes, ET, Niti Aayog, and Bill Gates Foundation, and many more.
The Delhi-based startup is currently earning revenue of INR 100 crore each month and it is expected that at the end of the financial year, March 31, 2022, to be INR 1400 crore, which will be four times more than the revenue at the end of March 31, 2021, which was INR 352 crore.
The startup has 650 buyers who buy from farmers and 150 sellers who are engaged in selling farming-related products to the farmers.
Sofina is a Belgium-based investment company that is family-run and is engaged in controlled investment with the Chief Executive Officer being Harold Boel. The four focus sectors of the investment company are-
Consumer and Retail, Digital Transformation, Education, and Healthcare.
The mission of the investment company is to be the preferred partner of entrepreneurs and families who leads growing companies by backing them with patient capital and supportive advice. The goals and the mission of Sofina are explained below-
1. Our goal is to create economic value with a human approach
2. We believe entrepreneurs become successful by being competitive in a globalized market
3. Our heritage and culture are what makes us unique
Looking back at the history of Sofina, it was founded more than 120 years ago as an engineering conglomerate and is now a listed investment company. It has equity holdings in Europe, the United States, and Asia. It has the shareholders’ equity worth EUR 10.4 billion, and 30 investment officials working across 3 offices.
About LightRock India
Launched in February 2021, LightRock India is a global private equity partnership that seeks to achieve financial as well as societal, and environmental returns. It is LGT group’s global impact investing platform that consolidates all of its impact investing activities worldwide.
It provides patient capital and business-building support to world-class entrepreneurs across three key themes-
1. Unlocking human potential, equitably
2. Building resource efficiency, sustainably
3. Reimagining business productivity, responsibly
It covers key factors like Food and Agriculture, Logistics, Mobility, Healthcare, Renewable Energy, Educational and Financial services. It invests between USD 10 and USD 50 million in a company.
About Temasek Holdings
Founded on June 25, 1974, Temasek Holdings is a Singaporean holding company which is owned by the Government of Singapore. It owns and manages a net portfolio of S$306 billion. It is anchored in Asia and has 60% underlying exposure to the developed economies. It is an active investor and shareholder. It has four key structures for long-term portfolio construction- Digitisation, Sustainable Living, Future of Consumption, and Longer Lifespans. The key investment areas of the holding company are- Consumer, Media & Technology, Life Sciences & Agri-foods, and Non-Banks Financial Services.
It has its headquarters in Singapore and has 13 offices in 9 countries- Beijing, Mumbai, Shanghai, Hanoi, Shenzhen, and Singapore in Asia, London, Brussels, San Francisco, Washington DC, New York, Mexico City, and Sao Paulo outside Asia. It has total assets worth S$381 billion as of March 2021 and has more than 800 employees.
The startup is doing good and we wish it nothing but good luck and a bright and successful future.
EDITED AND PROOFREAD BY : NIKITA SHARMA