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| Agritech start-ups | | | Dr. Parveen Kumar, Dr. D. Namgyal | 9/13/2019 8:10:51 PM |
| The use of technology in agriculture and allied sectors with the ultimate aim of improving yield, efficiency, and profitability is what we call as Agritech. A startup or start up on the other hand is a company or project initiated by an entrepreneur to seek, effectively develop, and validate a scalable business model. Hence, the concepts of startups and entrepreneurship are similar. However, entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow big or become registered, while start ups refer to new businesses that intend to grow beyond the solo founder, have employees, and intend to grow large. Start ups face high uncertainty and do have high rates of failure, but the minority that go on to be successful companies have the potential to become large and influential. Agritech start-ups are one of the agriculture oriented start ups. These are potential human capital in the Indian agricultural economy and certainly the right partners for innovation led agriculture growth. Innovations by agri start-ups in form of products, services or applications can be a meaningful solution across the agricultural value chain. Agritech startups can rightly be called as one of the disruptive technologies.
These Agritech start ups are playing a vital role in generating employment, providing advisory, input and marketing services. The country presently has more than 450 start-ups in the Agritech sector, according to the National Association of Software and Service Companies (NASSCOM). The report of the NASSCOM, 'Agritech in India-Emerging Trends in 2019', reveals that the sector in India is growing at a rate of 25%, year on year and has over the recent years witnessed some of global and sector-focused funds directly investing in Agritech start-ups. According to the report, as of June 2019, the sector has received more than $248 million funding, a rise of 300% as compared to the previous year. With the recent rise in funding, 48% Agritech CEOs, as per the NASSCOM survey, believe they have the next Agritech unicorn in the coming three years. According to Debjani Ghosh, President, NASSCOM,'India's agriculture sector is advancing steadily towards its digital transformation and the start-up ecosystem is playing a critical role here, bringing innovation and disruption in much-needed areas'. Adoption of technology in agriculture has always needed a structured institutional focus and technology firms are trying to break into the agricultural landscape using newer business models. The findings of the report are testimony to the potential of the Agritech industry and the opportunities that India presents in the agriculture and farming landscape.
The Agritech start-ups have enabled creating better access to market, faster technology adoption and bringing domain specific product development support to the industry. In the last five years, more than five global Agritech companies have ventured in India, as compared to more than 25 Indian Agritech companies with global presence. Emerging areas like market linkage, digital agriculture, better access to inputs and financing are gaining attraction. These technology adoptions are enabling numerous Agritech startups to bring forth farming-related advanced technological mechanisms to help local farming become a sustainable and profit-yielding enterprise. It is estimated that by 2020 the Agritech sector will be at the center stage of innovation and will lead India's journey towards overall transformation. Therefore, the ecosystem needs to focus on driving innovation, data collaboration, easy working capital and providing digital infrastructure to enable real-time access to farmers across the country.
There are many a successful cases of startups in rural India. By their innovative ways they have provided the solutions for eliminating farm losses. Annual post-harvest losses are estimated to be about ?90,000 crore in India. This is due to the mismanagement of resources, a lack of basic infrastructure and a bad supply chains. This is the reason why more than half of overall funding in 2019 went to Agritech startups with solutions related to market linkage and digital agriculture services. Ninja cart, India's largest B2B fresh produce supply chain startup has created a direct linkage between the farms and groceries and helped farmers realize 20% more revenue than the existing market. One category of startups are working on enhanced supply chains, others are using big data analytics and artificial intelligence to optimize farm management.
In the country, a total of 366 agri-based start-ups have come up from 2013 to 2017 with more than 50% of the start-ups in the last 5 years started in 2015 and 2016. It is also to be noted that more than 90% of all funding is focused on seed stage and early stage start-ups. Agri start-ups have received decent support from the government through supportive policies such as Start up India, Atal Innovation Mission, New Gen Innovation and Entrepreneurship Development Centre, the Venture Capital Finance Assistance (VCA) Scheme promoted by the Small Farmers' Agri-Business Consortium and ASPIRE scheme. Such schemes along with well-recognized accelerators, incubators and mentors identified for the Agritech start-up ecosystem have been working in tandem to provide the best technical support and reduce the gestation period of agri start-ups. Going forward, agri start-ups also need to critically address the inherent issues like low landholding size, longer gestation periods, lower return on investments, lower affordability amongst target groups, and skill and knowledge gaps amongst farmers while developing and popularizing their business models.
Agro-Star, a Pune-based m-commerce startup that sells agricultural inputs directly to farmers' has established itself as one of the leaders in the Agritech space in India especially after it raised the highest funding for an Agritech startup in the country in 2017. Agro-Star, which aims to scale its services across India, is trying to solve the last-mile logistics problem in rural India so as to enable better delivery of services. It has boosted the deliveries done by its own field team (as against using an intermediary like India Post) to make sure the packages are delivered on time. It has covered more than 2,300 pin codes, which means more than 25,000 villages of Gujarat, Rajasthan, and Maharashtra. Agriculture supply chain startup Cro-farm, founded in 2016, buys fresh fruits and vegetables directly from farmers and supplies them to online and offline retailers. The Agritech start up services more than 100 small and medium retailers through its multiple distribution centres and claims wastage of less than 5% in its supply chain as compared to average wastage of 50% in fruits and vegetables throughout the supply chain in the country. Similarly in the field of Agricultural Mechanization, another startup established in 2014, EM3 Agri offers farm services and machinery on rent to farmers. The startup provides pay peruse 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. EM3 has partnered with the Rajasthan government to offer smallholder farmers access to capital equipment, such as tractors, harvesters, and advanced farm implements. |
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