Agritech funding sees a rebound in 2024, poised for further growth in 2025
After a massive correction last year, the investments in Indian agritech have seen a recovery during 2024 in line with the broader trend in the overall state of the start-up funding ecosystem in the country. They are poised to rise further in the new year as the long term prospects for technology interventions in the farm sector remains intact.
During 2023, investments in Indian agritech registered a 65 per cent decline to $320 million from the previous year’s $901 million mirroring the broader trend of slow down in start-up ecosystem.
“Last year the investments in agritech were to the tune of about $320 million, which was absolutely bad. This year, I think we have crossed somewhere between $400 to $500 million, maybe a few more deals may close this month. Hopefully, we should close the year with $500-$600 million. So, there is some bit of rebound,” said Hemendra Mathur, co-founder, ThinkAg and Venture Partner, Bharat Innovation Fund.
Some of the agritech start-ups that were successful in raising funding during 2024 include Stellapps ($26 million), Captain Fresh ($25 million), Arya.ag ($20 million), Niqo Robotics ($13 milion), Agrim Wholesale ($17 million), BigHaat ($8 million) and Balwaan Agri ($5 million) among others.
While there’s some bit of rebound, the investors’ focus remains on the same old theme of last year in terms of more bottom line focus and point to profitability among others, Mathur said. The valuations have moderated quite a bit during the year and even some start-ups have raised money at valuations, which was kind of lower than the previous round.
“There is moderation in valuation and it’s no longer three time gross merchandise value (GMV). It is pretty much linked to linked to unit economics and capital efficiency is becoming more and more critical,” Mathur said.
“I think there are a lot of good, even scaled-up startups becoming positive either at the contribution margin level or EBITDA level. So, clearly, at least half a dozen scaled-up start-up getting there in terms of demonstrating a positive bottom line, at least till EBITDA level or some contribution margin level, which is good news,” Mathur added.
Mark Kahn, Managing Partner of Omnivore, the largest investor in the Indian agritech, termed 2024 as a year of stabilisation. “There are some announcements that are yet to come that will probably come in this month of December that will push the number for 2024 up still further,” he said.
Further, Kahn said 2025 will see a significant uptick. “One factor that will drive growth in 2025 are large growth rounds, later stage growth rounds. I think there are a number of growth stage companies raising large rounds. I think it’s much easier to raise a seed round right now than it was two years ago or one year ago,” Kahn added.
Commenting on the outlook for 2025, Mathur added “I see some larger rounds closing now, finally. Most of the deals closed this year is are under $30 million. But next year, I see at least two deals, which could be in the range of $50 or $55 million. So, the large cheques are bound to come back. And, of course, the seed and the pre-seed series, I think they will continue to grow further. So, if I have to put a number, may be between $500 million to a billion for the next year.”
Recently, Agfunder in its recent report said agrifoodtech funding in Asia Pacific has demonstrated a remarkable recovery during 2024.