Investment alert- Flipkart announced an investment of USD 145 million in Ninjacart, an agritech startup
Let us talk about the agritech industry and the investments related to it. The traditional agriculture industry which is a source of around 42% of the Indian population has seen a drastic change. Gone are the days when agriculture and farming required labor and hours of man work because now is the time when machinery and technology have taken the place. Defining agritech, is the utilization of technology in agriculture, horticulture, and aquaculture, with the motive of improvement in yield, efficiency, and profitability.
The Indian economy currently has around 1327 agritech startups. The number of agritech startups is growing at 25% year on a yearly basis. These startups are giving empowerment to around 150 million farmers with modern and data-led systems. This modern sector is undoubtedly bringing a sort of disruption (which is kind of a good way) in the agricultural industry. We have tools, machines, and pieces of equipment to help our farmers, reduce their workload, and allow them to focus on more important things.
The Indian agritech industry has seen a growth of 85% during the financial year 2019-2020. According to a report by Ernst & Young 2020, the potential of the market of the Indian agritech sector will reach USD 24 billion by the year 2025, out of which only 1% of the share has been captured yet. According to research done by Bain & Company, the Indian agritech market has the potential to reach USD 35 billion by the year 2025.
Since the year 2015, investments are being made in this sector and the total investments reached USD 242 million in the year 2020.
Let us now talk about the investment which has been made recently in an agritech startup.
Announcement of an investment made in an agritech startup
This investment will help the startup to further strengthen its grocery footprint. The funds will be utilized in giving power to millions of agri-value chain participants, which are farmers, retailers, customers, and supply chain participants. The startup understands that the world is shifting to e-grocery stores, and with these funds, it wants to contribute its bit in the same sector.
About the agritech startup Ninjacart
The startup, Ninjacart, is the pioneer in the tech-driven supply chain space for fresh produce. The startup is India’s largest fresh produce supply chain company that is solving one of the toughest problems in the world through technology. The startup connects producers of food directly with retailers, restaurants, and service providers using the in-house application that drives end-to-end operations.
It is engaged in solving some problems, which are as follows-
The problem is farmers experience price risk, information asymmetry about demand, distribution inefficiency, and receive late payments. The solution provided by the startup for this is it eliminates intermediaries using technology and analytics by taking control of the supply chain.
The other problem is retailers face obstacles like high costs, low quality, and unhygienic produce, high price volatility, and the hassle of going to the market everyday. The solution provided by the startup for this is it builds reliable, cost-effective, and high-speed logistics and infrastructure to solve the inefficiencies in the supply chain.
The next problem is the traditional supply chain is highly inefficient, unorganized, and has a high rate of food wastage. The solution provided for this problem is that on one end, the farmers get better prices and consistent demand, and on the other hand, retailers receive fresh produce at competitive prices that are delivered to their doorsteps.
The growth and development of the startup has been as follows-
It started working with farmers.
Then it supplied fresh producers to retailers.
Then it moved to fresh produce every day, PAN India.
The startup gets its source from Indian villages.
The startup currently is operational in 7 major cities – Bengaluru, Chennai, Hyderabad, Delhi, Ahmedabad, Pune, and Mumbai.
The vision of the startup is to build the most efficient and largest Supply Chain platform in the country. It also wants to improve the lives of producers, businesses, and consumers in a meaningful manner. It is engaged in making the innovations of the startup more accessible to the most fragmented parts of society. It wants to use its strength and resources to innovate for new product categories and customer segments while solving complex supply chain problems.
The investors of the startup are big names like- Flipkart, Walmart, Tiger Global, Accel, Mistletoe, Joe Hirao, and many others.
Flipkart on the other hand is offering groceries in 1,800 cities and towns and has the aim to take its offering to 2,000 more towns by the mid of the next year.
What has been said about the deal?
The co-founder and the CEO of the startup, Thikrukumaran Nagarajan, made a statement saying that our country, India is at the point where it is formalizing the agricultural industry with better road connectivity, GST, seamless payments, digital infrastructure, and whatnot. He further said that this has opened up the opportunity to organize the agri-eco landscape like never before. He said that the startup is investing in this huge potential to create value.
The startup is definitely offering something very different to the world. It is engaged in solving some of the major issues which the economy, the businesses face. We wish the startup good luck and a bright and successful future ahead.