This article is part of Inc42’s Startup Watchlist annual series where we list the top startups to watch for 2018 from industries like Agritech, Logistics, Blockchain etc. Explore all the stories from ‘Startup Watchlist’ series here.
“Farming is a profession of hope.” And India holds the record for the second-largest agricultural land in the world, with around 60% rural Indian households making their living from agriculture.
This not only speaks about millions of hopes associated with agriculture but also points out to the huge scope for agritech startups in the country to make those hopes of Indian farmers come true.
Likewise, the central and state governments are proactively pursuing policies to improve farmers’ lives in India. In fact, PM Modi’s government has an aim to double the average farmer’s income by 2022. No wonder, agritech became the new buzz word in the Indian startup ecosystem in 2017 and a hot topic for discussion in most of the startup conferences and events in India.
As per Inc42 Datalabs, the size of agriculture and allied activities in the country underwent a near100% growth between FY14 and FY15. Agricultural exports increased from $24.7 Bn in 2011-12 to $32.08 Bn in 2015-16; a CAGR of more than 6.75%.
But a drop in landholdings (average 1.4 hectares), small and fragmented land holdings, a decreasing agricultural land versus a growing population, decreasing groundwater levels, poor quality of seeds, and lack of mechanisation are some of the challenges for the growth of agriculture in India.
And that’s not enough, an absence of an organised marketing structure for produce, malpractices in the existing unorganised agricultural markets, inadequate facilities for transportation and storage, scarcity of credit, and limited access to superior technology are some of the many afflictions which obstruct the Indian agricultural sector.
Thus comes a massive opportunity for agritech startups in India.
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, and reducing wastage in the distribution system, among others.
Agritech startups are also leveraging technology in the area of market linkages such as retail, B2C and B2B marketplaces and digital agronomy startups. They are now able to address input challenges of agriculture in India from the very beginning.
The agritech startups are able to provide correct information, techniques, and efficiencies to farmers both for pre-harvest applications and post-harvest use cases. Accenture estimates the digital agriculture services market to hit $4.55 Bn by 2020, thus pointing out to the ample scope of growth for agritech startups in the country.
How Did Agritech Fare In India In 2017
Within the last two years, as agriculture has come back into the public mindset, there has been an increased interest in investing in this sector.
As per Inc42 DataLabs, around $36 Mn was invested in 15 startups in the space in 2017. Out of these, Pune-based agritech startup AgroStar raised the highest funding of $10 Mn Series B funding led by Accel India in March this year. Mirroring Agrostar in its funding amount was Noida-based EM3 Agri Services which offers pay-per-use farm services for every step of the cultivation process and raised $10 Mn in a Series B funding round led by Global Innovation Fund (GIF) in August.
Following closely was Bengaluru-based B2B agritech startup, Farm Taaza, that raised $8 Mn Series A funding in a round led by Epsilon Venture Partners in October.
As we close the year and the agritech rage continues unabated, with investors such as Omnivore Partners, Future Venture Capital Company Ltd. (FVCCL) and IDG Venture among others continuing to pour money in the sector, here’s our pick of 12 agritech startups to watch out for in 2018.
A List Of Indian AgriTech Startups To Watch Out For In 2018
Founded in May 2016 by Prashant Jain and Varun Khurana, Crofarm is an F2B (Farm to Business) venture. According to the website, it has over 10,000 farmers in its network and has partnered with Reliance Retail, Grofers, Big Basket, Jubilant Foodworks, Big Bazar and Metro Foods.
Crofarm generates revenue through commission, starting from nearly 5% of the price in case of less perishables like potato and onions. It makes a commission of around 15% of the price of green vegetables, and 20-25% in case of fruits and exotics.
The company procures products that have a longer shelf life from national sourcing zones and other products from regional sourcing zones.
In August this year, the agritech startup secured about $783K from a consortium of investors, including US-based Factor[E] Ventures; Rajan Anandan, VP of Google Southeast Asia and India and Jitendra Gupta, MD of PayU India. Prior to that in August 2016, it raised $1.5 Mn in seed funding from Mukul Singhal and Rohit Jain, former Principals at SAIF Partners.
When it comes to competition, the agritech startups that are in the same space include – Ninjacart, MeraGrocer, Freshfalsabzi.com and GrocerMax.
The Farm-to-Business, Crofarm attacks one of the biggest inefficiency in agriculture wastage during distribution and selling of farm produce. By building a digitised agri-supply chain for fruits and vegetables that is efficient and has zero wastage, it increases the incomes of both farmers and neighbourhood retailers.
Farmers using the Crofarm platform reportedly earn 25% more than what they would if they sold the produce to mandis (markets).
No wonder, it claims to have served more than 10,000 farmers from Delhi-NCR, Haryana and Uttar Pradesh and is currently servicing over 100 small and medium-sized retailers through its distribution centres.
With clients such as Reliance Retail, Grofers, Big Basket, etc., Crofarm is one agritech startup that is addressing a key problem in agriculture by efficient utilisation of technology.
Aarav Unmanned Systems
An unmanned aerial vehicle startup incubated at IIT Kanpur with a team of designers, artists, developers, and engineers from IIT Kanpur, IIT Bombay, IISc Bangalore & IIST, Aarav Unmanned Systems aims to build the future of drones and their applications in the enterprise space.
The startup’s drones provide high-value engineering solutions to enterprises across GIS (geographic information system) surveying/mapping, industrial inspection and precision agriculture. Thus it holds the potential for making precision agriculture scalable in the country which is far behind in employing technology.
By providing accurate 3D representations of the terrain surface, it can transform and change the way decisions are made in agriculture through its solutions to optimise irrigation, fertilisation, pesticide distribution and early failure warnings.
In February 2016, the agritech startup raised an undisclosed amount in Seed funding from StartupXseed Ventures, The Phoenix Fund, and other investors.
Founded by IIT Madras graduate Vivek as Airwood Aerostructures and rebranded as Aibono in January, the agritech company provides farm-related intelligence, technology, expertise and gadgets to farmers.
Engaging in precision agriculture, the company helps small farmers gain from economies of scale by sharing resources and expertise. The agritech startup also advises farmers on the right amount of inputs to use for maximum yield.
Aibono began in the niche area of providing Farm Management-as-a-Service whereby, a farmer gets to outsource his entire measurement, production management and decision-making processes to a Service.
It provides this service on a sharing basis deploying a shared Farm Manager along with shared instruments mapping the data onto the cloud. Its centrally managed Data Science and Recommendation Engines enabled by its data scientists and agronomists give precise day-to-day interventions to farmers, enabling a 30-50% increase in yields.
Aibono has helped increase yields by nearly 50% for some 140 farmers it works within the Nilgiri hills in Tamil Nadu. Given the dire need for precision agriculture in India’s $300 Bn agritech industry, Aibono’s prospects look great in the coming times.
CropIn integrates the agricultural sector with Information and Communication Technology (ICT) by putting a network of ERP and BI (Business Intelligence) across rural India. By doing so, the agritech startup collaborates with the different value chain participants along the supply chain to monitor farm produce status closely.
The agritech startup provides farm businesses a farm management software and mobile app, which enables them to do connected and data-driven farming.
In September this year, the Bengaluru-based agritech startup raised an undisclosed amount of Pre-Series A funding from Singapore-based Beenext, Ankur Capital and Invested Development. With this round of funding the total funds raised by the startup has increased to about $4 Mn. Last year, the startup had raised $2 Mn from Denmark based Sophia Investment.
CropIn allows farm businesses to take advantage of real-time data and insight from farms (an accurate view of their operation throughout the growing season) and to improve financial, operational, and agronomy aspects. The company harnesses cutting-edge technologies – Big Data analytics, Artificial Intelligence, Geo-tagging & Satellite monitoring to revolutionise the agri-ecosystem.
Closely competing with Aibono, CropIn is currently present in 12 countries with a customer base of 120 clients and enriching the lives of 500,000 + farmers. The startup claims to have digitised about 2.1 Mn acres of land.
By leveraging technology to facilitate data-driven farming and expand its presence in Southeast Asia and African countries, CropIn sits at the helm of startups which could effectively bring the benefits of SaaS to agriculture.
The origin of farm equipment aggregator Gold Farm can be traced back to Surya Power Magic, which was founded by Abhilash Thirupathy in December 2012 to educate farmers about solar water pumps. The Multilateral Investment Firm-backed company has assisted more than 750 irrigation pump owners in Karnataka harness solar power.
To reach a wider section of the farming population, Thirupathy along with Karthic Ravindranath forayed into the farm services sector with Gold Farm. Launched in March 2016, the startup applies the concept of on-demand to farm mechanisation.
As an aggregator, Gold Farm partners with local entrepreneurs, who can invest in tractors and other agricultural machinery. These types of equipment are, in turn, rented out at the village level on an hourly basis.
The aggregator platform currently boasts a user base comprising of 25,000 farmers from three village districts in Karnataka and Andhra Pradesh. At present, it takes a 10% to 15% cut from each transaction.
What makes it promising is the fact that it allows farmers the availability of farm mechanisation equipment without owning them. Given that most farmers struggle on account of this, the success of the model speaks for itself.
As per Thirupathy, the farm equipment aggregator has a 75% repeat customer rate. By leveraging IoT for demand generation and tracking, Gold Farm’s prospects look bright as it endeavours to make farm mechanisation equipment more accessible to farmers across all village districts in Karnataka.
The agritech startup which counts Mahindra & Mahindra and Infuse Ventures as its investors compete with FarMart and Trringo in this space.
Due to marginal farming, poor logistics and zero market information, a number of middlemen get involved in sourcing the produce from farmers to markets. As a result, the farmer gets only one-fourth of what the consumer pays and also there is much wastage in the supply chain.
It is this problem which Ninjacart addresses-cutting out the middlemen from the supply chain. In the last one year, it focussed on building a cost-efficient, reliable and scalable supply chain that can handle 300+ tonnes a day.
NinjaCart has been founded interestingly by the former head of TaxiForSure, Thirukumaran Nagarajan, along with four more co-founders. Initially, it worked as an on-demand grocery delivery company and later pivoted to an end-to-end B2B agri marketing platform.
Today, it moves 60+ tonnes of produce a day from farm to store in less than 14 hours at a cost lower than traditional supply chains. As a result, it helps over 2,000 farmers to sell more than 80 vegetables and fruits every day to 800+ retailers and restaurants in Bengaluru and claims to have less than 4% wastage in the entire supply chain.
The Bengaluru-based B2B agri-marketing platform counts a slew of backers such as Accel Partners, Nandan Nilekani’s NRJN Trust, Mistletoe, Qualcomm Ventures, and M&S Partners. It competes with Crofarm in the same space.
WayCool aims to fix the disorganised perishable supply chain. It is an omnichannel fresh produce distribution company that distributes fruits and vegetables to multiple end-use segments spanning small local shops, modern retail outlets. The company has a retail presence currently in Chennai, through the SunnyBee brand, operating retail stores, mobile stores on trucks. In addition, there are a number of private label products that SunnyBee produces and brands through partnerships with sister companies.
India is the second-largest producer of fruits and vegetables in the world and presents a significant opportunity for private players to profitably organise perishable produce value chains. This is what Waycool is hoping to leverage.
The agritech startup now claims to have over 20,000 farmers on board and says that by tying up with Waycool, farmers have been able to increase their earnings by 25%. It has also made it a point to network with small farmers rather than larger establishments; about 45% of its produce comes from farmers having less than two acres of land.
Given that majority of farmers in India fall under this category, Waycool has a big opportunity to unlock the potential of these farmers and in the process reduce wastage in the supply chain.
EM3 Agri Services
Farm mechanisation services company EM3 Agri was established in 2014 by the father son-duo of Rohtash Mal and Adwitiya Mal. EM3 Agri provides pay-per-use farm services for every step of the cultivation process, including land development, land preparation, seeding, sowing, planting, crop care, harvesting and post-harvest field management.
Farmers can access these services through a mobile app, and can also seek assistance from the company’s local fulfilment centre or “Samadhan Kendra.”
With two-thirds of India’s farms smaller than a hectare, most of the small-hold farmers rely on manual labour as they cannot afford capital equipment such as advanced farm implements, tractors and harvesters.
It is this problem which EM3 Agri aims to address through its farming-as-a-Service (FaaS) model. EM3 provides a solution to this problem by offering an entire range of interventions, from soil preparation to harvesting, where farmers pay a service fee on a per hour or per acre basis.
These services are cheaper than hiring manual labour, with service levels guaranteed by the company. Depending on the services, this could range from $23 (INR 1,500) per acre to level ou the land; if the farmer is setting up rice nurseries, it can go up to $54 (INR 3,500).
As per Rohtash, mechanisation brings down costs by about 25% and increases productivity by nearly 20%. In the last three years, EM3 Agri has serviced more than 8,000 farms across central India.
In August this year, EM3 Agri secured $10 Mn in Series B funding from UK-based Global Innovation Fund (GIF) and existing investor, Aspada Investments. In June 2015, the startup raised $3.3 Mn Series A funding from Aspada Investments. Triingo (a Mahindra company), and Zamindara are some other startups in this space.
By August this year, the startup was clocking average monthly sales of $156K (INR 1 Cr), a sign that FaaS as a model holds much potential.
The Bengaluru based agritech startup offers a product DIGITAL AGRI which uses computer vision algorithms to see the minutest detail on every plant and harness human intelligence to grade agricultural commodities.
Intello Labs aims to revolutionize agriculture by enabling farmers, traders, millers, retailers and end users in communication though images for product quality, infestation, plant health or even soil conditions.
Intello Labs uses Artificial Intelligence and deep learning for crop quality parameters like crop infestation, nutrient deficiency harvest quality evaluation of fruits, vegetables, grains and other crops and farm to fork commodities etc.
The startup was also recognised as one of India’s Most Innovative Top 50 Emerging Software Product Companies by Nasscom this year.
The startup use satellite and drone images for yield estimation, and water requirements. Farmers, procurers, field agents or quality professionals can just click an image of the crop or harvested produce and Intello Labs can provide precise insights from the images.
Thus it has immense potential in digital agriculture in the country, in eliminating wastage, in food grain quality grading, and in reducing crop losses due to diseases. AI can enable farmers to switch to smarter techniques to control crop infestation and reduce human interference and this is where Intello Labs’ strength lies.
Mumbai-based FarmLink is an agritech startup that functions as a supplier of value-added fresh produce. It currently specialises in end-to-end supply chain of fruits and vegetables. The company launched its commercial operations last year, and counts Star Bazaar and Vista Processed Foods as its clients.
FarmLink is also in the process of piloting its B2B analytical tool, FarmTrace, which as its name suggests is aimed at helping clients track the location of the produce in the farm-to-shelf cycle.
By working with local producers, FarmLink is yet another agritech startup involved in improving the supply chain from farm to shelf, one of the major pain points for farmers in India. FarmLink also promises a secured source of income for farmers through long term off-take agreements.
In addition to offering support to enhance the quality and yield of crops, the agritech startup is striving to provide farmers with knowledge and extension services, geared towards improved planning and productivity, efficient adoption of scientific practices as well as stabilisation of payments and finances.
In November this year, it closed $3 Mn (INR 20 Cr) funding in a round led by investment firm-cum-incubator Pioneering Ventures and agrochemical company Syngenta. Waycool operates in the same space.
So far, the company has established four distribution and collection centres in Maharashtra, Karnataka and Telangana, which are being used to procure supplies from more than 700 farmers across these three states.
With the fundraise from Pioneering Ventures and Syngenta, the company is planning to increase the number of farmers on its platform to 3,000. Of this, around 40% to 50% of the new farmers will be onboarded over the next 12 months.
Given that high wastage across the value chain is a big inefficiency in Indian agriculture, FarmLink’s approach to increase digitisation across the supply chain will find both many takers as well as increased competition in the coming years.
Gramco Infratech Pvt Ltd
Indore-based Gramco primarily operates in the vicinity of villages and producing areas where it is involved in creating and leasing full service agri-infrastructure to the farmers.
The infrastructure it provides spans across inputs, warehousing, collateral finance and contract farming/seed production, fully automated handling/cleaning/grading and procurement of agri-commodities by creating market links for farmers.
Gramco’s vision is to be “a complete solution provider ” right from the sowing to marketing. Integration of farm services and making available infrastructure closer to the growing areas is the need of the hour. Thus it aims to reach out and empower the farmers and give them the opportunity that so far was mainly the domain of the traders. Through offering world class infrastructure with Farm Extension Services, Inputs, Post Harvest Infrastructure and value addition, and assisting farmers sell their produce at one location, it aims to truly empower the farmers.
The agritech startup which has managed to raise $2.3 Mn from The Samridhi Fund now offers value-added services to more than 3,000 farmers every season in MP, thus slowly changing the face of post-harvest ecosystem in rural India.
Owned and operated by Thermal Energy Service Solutions Pvt. Ltd, Tessol was founded by Rajat Gupta, an alumnus of IIT Delhi and Harvard, in 2013. Rajat founded Tessol in 2013 with a vision of creating a farm to fork cold supply chain.
Rajat felt,“There was a lot of focus on energy generation, with solar and wind, but nothing was being done on the energy storage side.” He decided to dig deeper and realised that while the technology exists for thermal energy storage, it hadn’t really caught on.
Tessol’s breakthrough, as per him , is the design of a heat exchange unit that can be charged at any power outlet in about six hours. Once charged, the unit will keep the refrigerator on the reefer truck within the optimal temperature for a full-day’s operation.
Using its energy storage technology, Tessol’s cold storage and transportation solutions eliminate the use of fossil fuel for cold chain transport systems. Its PLUGnCHILL range of products for transport refrigeration use the proprietary PCM heat exchanger technology to provide 60% cost savings while eliminating the use of any fuel. Tessol products are marketed pan India and are being launched in the UAE for the middle-eastern market.
As mentioned before, India is the second-largest producer of fruits and vegetables in the world, and presents a significant opportunity for private players to profitably organise perishable produce value chains.
No wonder its fuel-free technology is being used by companies across poultry, horticulture, dairy and frozen food sectors including Godrej Tyson, Abad Fisheries, Mother Dairy, Chitale and Fortis hospitals. The firm has already customised 200 cold chain vehicles with modular TES units for bakeries, fruit and vegetable vendors, dairy and ice cream manufacturers and e-commerce, food processing, poultry and seafood companies.
The agritech startup counts Infuse Ventures and Ankur Capital as its investors. The startup plans to expand its sales and service network across India and create more products. Rajat expects to break even if Tessol can sell between 300 and 400 units a year.
In April this year, the startup was one of the six winners of the prestigious Startup Energy Transition awards instituted by the Deutsche Energie–Agentur, the German Energy Agency, for innovative business ideas in energy transition from across the world.
Given that there is a dire need for innovative cold storage solutions to tackle the problem of agricultural produce going bad when in storage, Tessol has a good shot in this space. Rajat expects to break even if Tessol can sell between 300 and 400 units a year.
While these were the Indian agritech startups to watch out for in 2018, stay tuned for next edition of Startup Watchlist, where we will be featuring IoT startups to watch out for in 2018, click here for more stories!
[The startups mentioned above have been selected on editorial discretion, our interactions with the startups and other industry veterans.]