Indian Agritech Sector Poised for Growth with 19 Soonicorns and 40 Minicorns, Says RBI Report

The Indian agritech industry is rapidly growing, with 19 soonicorns (startups on the verge of becoming unicorns) and 40 minicorns (early-stage startups) leveraging emerging technologies like AI, IoT, blockchain, and big data to address challenges in the agriculture sector, a new RBI paper says.

According to this new paper titled “Agri-Tech Startups and Innovations in Indian Agriculture” by D. Suganthi, Jobin Sebastian, and Monika Sethi, these startups are gaining momentum in bridging the technological gap in agriculture, and they show considerable promise for the future.

While India’s agritech ecosystem currently boasts only one unicorn—Waycool, valued over $1 billion—the sector is witnessing an influx of companies approaching unicorn status.

The report states that these startups are focusing on integrating cutting-edge technologies into agriculture to improve efficiency, streamline operations, and enable farmers to adopt modern practices.

Investments in Indian agritech startups rose from $370 million in 2019 to $1.25 billion in 2021. However, the sector, like its global counterparts, saw a decline in investment in 2023, reflecting a broader economic slowdown.

Global funding for agritech companies peaked at $10.9 billion in 2021 and 2022 before dropping sharply to $5.2 billion in 2023.

“As regards the share of agritech companies by funding, the U.S. holds the highest share (43.2 per cent), followed by China (14.4 per cent), Canada (12 percent), and India (8.5 per cent). The Indian agritech ecosystem has, thus, garnered a significant share of global funding,” the paper noted.

The central government has played a pivotal role in nurturing India’s agritech landscape. Initiatives like Digital India, Make in India, and various startup funds have helped create an ecosystem conducive to growth. Moreover, accelerator and incubator programs, supported by the government, have been instrumental in helping agritech startups scale operations and increase their reach.

Also Read:

Union Agriculture Minister Launches Rs 750-Crore ‘AgriSure’ Fund to Boost Agritech Startups

According to the RBI paper, government-backed digital infrastructure has been crucial in accelerating the growth of agritech startups, especially during the COVID-19 pandemic. The creation of digital platforms for farmers and easier access to credit and funding have been key factors contributing to the success of these startups.

Several agritech startups in India are adopting technologies such as IoT, big data analytics, artificial intelligence (AI), blockchain, drones, and biotechnology to transform traditional agriculture. These technologies are being used for tasks ranging from crop monitoring to improving supply chain efficiency and automating farm processes.

Startups like AgroStar, Dehaat, and Cropin are already leveraging these technologies to offer innovative solutions to farmers, helping them increase crop yield, reduce waste, and access markets more efficiently.

Despite the promising growth of India’s agritech ecosystem, there are challenges that need to be addressed. The RBI paper notes “Key challenges hindering growth include insufficient funding, fragmented landholdings, and the longer time required to achieve revenue generation,” it added.

Another significant challenge is the adoption of modern technologies by farmers, who are often reluctant to change established practices. The sustainability of agritech startups hinges on the widespread adoption of technology, which will ultimately allow them to reach their full potential.

The future of India’s agritech sector looks bright, with the government’s continued support and technological advancements pushing the industry forward.

As India looks to achieve its Viksit Bharat mission by 2047, the agritech sector is well-positioned to contribute significantly to this vision.