India obtains third agrotechnology funding; can generate nearly $ 35 billion in agricultural products by 2025: Bain & Co report
A Bain & Co report said that the agritech and agroecosystem sectors have attracted a lot of interest from the investment community, which India, third country in terms of agrotech funding and number of agrotech startups.
He added that there are several estimates which indicate that about 30 to 35 billion dollars value pool will be created in agro-logistics, harvesting and delivery of agricultural inputs by 2025.
The report indicated between 2017 and 2020, India received around $ 1 billion in agrotech funding. The main deals in the agricultural sector have been investments in companies such as Ninjacart, AgroStar, Mahyco Grow, Husk, WayCool Foods and Products, Jumbotail, Vahdam and DeHaat (Green AgRevolution). Based on the noticeable changes in the sector, investments in agritech over the next four to five years are expected to increase significantly.
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Parijat Jain, Bain’s partner and food practice leader in India, said:
“Indian agriculture is at an inflection point. The $ 370 billion sector will undergo a complete transformation in the years to come thanks to significant technological interventions, regulatory support and behavioral changes among consumers and farmers. Digital disruption in the agricultural and agro-tech value chain enables the ‘uberization’ of services, the conversion of investment assets into pay-as-you-go models, and the creation of online communities as well as entry and exit markets. online output.“
He said that nearly 55 percent of India’s population still depends on agriculture for their livelihood.
The report describes an approach to reinventing Indian agriculture that is responsive to the changing times: Organizations can maximize their current business potential by becoming cheaper, better, faster, larger and greener.
The report stated –
a. The Indian agricultural sector is on the cusp of disruption based on technology, regulation, investment and behavioral changes in stakeholders from consumers to farmers.
b. The idea of doubling farmers’ incomes in the next few years is likely to become a reality.
vs. Agriculture’s contribution to the country’s gross value added (GVA) is around 20 percent, but it continues to be dominated by small, marginal farms.
Commenting on the report, Prashant Sarin, Partner and Head of Advanced Manufacturing and Services, Energy and Natural Resources Practices at Bain & Company, India, said, “We are at a key point where we can move from traditional methods to a new one, technology-friendly method of growing, processing and selling food. The traditional form of agriculture will be disrupted and reshaped over time, and $ 30-35 billion worth will be created in new value pools along the agricultural value chain over the next few years.
The report adds that the APMC reforms will allow companies to buy directly from the farmer while the ECA reform encourages investment in storage and transport infrastructure, which translates into cost savings. supply chain efficiency. Businesses can save 5 to 10 percent or more on the cost of purchasing food products through a concerted national strategy.
Technology drives innovations in various ways along the agricultural value chain. For example, insurance, credit rating and loans help increase funding for this sector. In farming activities, weather forecasting and smart crop management lead to higher yield, while sensors and the Internet of Things (IoT) allow better tracking and visibility of farming activities.
Shalabh Singawne, Associate Partner and Member of the Energy & Natural Resources, and Advanced Manufacturing & Services practices of Bain & Company, India, said:
“Businesses must be prepared to meet the challenges of this evolution while exploiting the opportunity it presents in the years to come. We will see significant value being created in the industry, and now is the best time for companies to invest and strengthen their digital capabilities to exploit the opportunities that arise. “
At the macro level, there are three potential games for companies in the agro-technology ecosystem:
a. Set up an integrated and scalable agrotech platform by bringing together all offers throughout the value chain.
b. Set up a CoE and an incubation wing for new business models and agrotech startups through strategic investments and partnerships.
vs. Digitally reinvent today’s businesses by identifying priority use cases that would complement current businesses and capabilities. When implemented, these technological changes, capabilities and investments can fundamentally change the productivity and landscape of the sector.
“Bain believes that the lifecycle of building an integrated platform will require sustained investment over several phases. A holistic digital platform would therefore include e-commerce and an online marketplace; transparent supply chains; and smart agriculture and evidence-based advice on risk and mitigation measures, such as short-term weather forecasts and long-term soil conditions, ”the report says.
He said that the future of agriculture is very important for the development of India, its political planners and other stakeholders. Indian agricultural reform is also essential from an environmental, sustainability and climate change perspective.
“We have only touched the tip of the iceberg. Businesses and farmers are essential parts of this value chain – one complements each other. We will be able to lift millions of farmers out of subsistence agriculture and poverty, thus enabling them to become creators of wealth. More and more, many young entrepreneurs are entering the agricultural startup space. The adoption of technology-friendly practices throughout the agricultural value chain is essential to transform this vital sector of the Indian economy, ”the report said.