Investment Opportunities for Start-ups in Agri Tech Sector
India has over 3,000 entrepreneurs, one third of whom are women, who have started biotechnology firms in the past five years and have raised a combined total of $2.8 billion or Rs. 18,700 crore in the same period.
These entrepreneurs have formed 1,022 biotechnology start-ups in the period between 2012 and 2016, with the major hubs for firms being Bengaluru, Delhi, Mumbai and Hyderabad, according to a report from the Association of Biotechnology Led Enterprises (ABLE).
The numbers are promising for the biotechnology sector in India, which had identified start-ups as a key driver for growth as early as 2012. With over 470 biotech start-ups being formed in the last two years alone, the possibility of reaching a goal of 2,000 biotechnology start-ups by 2020 seems possible.
Opportunities for AgriTech Startups
Opportunities lie in areas like how to increase crop production, improving the nutritional value of the crops, reduction in input prices for farmers, improving the overall process-driven supply chain, reducing wastage in the distribution system, making easy farm mechanisation available, and enabling connectivity of farmers with the masses by interlinking the consumer and producer.
AgriTech start-ups are also leveraging technology in the area of market linkages such as retail, B2C and B2B marketplaces and digital agronomy platforms. AgriTech start-ups are now able to address input challenges of agriculture in India from the very beginning. They are able to provide correct information, techniques, and efficiencies to farmers both for pre-harvest applications and post-harvest use cases.
AgriTech Funding in India
According to the latest report, for 2016, over $3.23 Bn was invested in agriculture sector worldwide. Of this, 53 Indian agritech start-ups raised $313 Mn. Globally, category-wise, 40% of the total funding ($1.29 Bn) was invested in food marketplaces or the food ecommerce category, followed by biotechnology start-ups which garnered 22% of the funding ($719 Mn). Investment in precision agriculture technologies, which include data-capturing devices and farm management software, came third at $405 Mn, while investment in Novel Farming Systems, which are start-ups using new and innovative ways to produce agricultural and biological products, was the fourth category wherein funding flowed ($247 Mn).
Reasons to Invest
India is amongst the top 12 biotech destinations in the world and ranks third in the Asia-Pacific region. India adopted the product patent regime in 2005. India has the second-highest number of USFDA-approved plants, after the USA. Increasing government expenditure will augment the growth of the sector - the government aims to spend USD 3.7 Billion on biotechnology between 2012-17. India has the potential to become a major producer of transgenic rice and several genetically modified (GM) or engineered vegetables.
Statistics
The Indian biotech industry will grow at an average growth rate of around 30% a year and reach USD 100 Billion by 2025. The market size of the sector is expected to rise up to USD 11.6 Billion by 2017 due to a range of factors such as growing demand for healthcare services, intensive R&D activities and strong government initiatives. The Indian biotechnology sector is divided into five major segments - bio-pharma, bio-services, bio-agri, bio-industrial and bio-informatics. Revenue from bio-pharma exports reached USD 2.2 Billion in 2013, accounting for 51% of total revenues of the biotech industry. The bio-pharmaceutical sector accounts for the largest share of the biotech industry with a share of 64% in total revenues in 2013, followed by bio-services (18%), bio-agri (14%), bio-industrial (3%) and bio-informatics (1%).
Being an entrepreneur myself and considering my experience with the funding part, I am bullish about the investments to be received, provided the idea and the related operation is scalable. Adding to it, the product actually need to bring about a difference and bring in "A New Hope"