Indian AgriTech had an exciting 2017, seeing its largest investment sizes and entrepreneurial activity to date. The sector has been on the rise with approximately 300 live startups (up from 50 in 2012) and three deals (Skymet, EM3, and Agrostar) that each attracted $10 Mn or more in funding. Global trends have reflected this increase too—US investment in AgriTech doubled to $700 Bn last year.
Impact investors are paying close attention to AgriTech because of its enormous potential to transform farmers’ lives. When funds are thinking about their strategic focus, they need to first consider all AgriTech subsectors –
- Biotech companies that research plant and livestock animal sciences and produce solutions for the agricultural value chain.
- Precision Agriculture, which includes companies that develop technology for data collection, data analytics, and increased automation in farming. The Farmer Business Network
- Agribusiness companies that use modern technology to produce improved farm inputs.
- Finally, Market Linkages companies that provide digital platforms to connect farmers to financing, produce markets, farm inputs, and rental equipment.
At Unitus Seed Fund, we see great promise in Market Linkages – one of the smaller subsectors in AgriTech. Investors who look beyond the numbers will see that these companies are uniquely positioned for impact.
Unlike every other subsector, which is led by the United States, the majority of Market Linkages startups are based in India. This geographic clustering is indicative of two things: the dire need for improvements to the agricultural supply chain in India and the opportunities for technology as readily available as ecommerce to disrupt the industry.
Linking Farmers To Fair Markets
One significant improvement would be to link farmers to markets that will pay a fair price for their produce. While farmers currently deal through middlemen and informal relationships that are often exploitative, online retailers have addressed market inefficiencies through B2B and B2C models.
For example, Farm Taaza, a platform that allows businesses to buy produce directly from farmers online, raised $8M in Series A funding in October 2017. Their model brings data management, planning and forecasting, sourcing, and product tracking for the agricultural supply chain into the digital age, providing retailers with superior customer service and farmers with better prices.