The Downstream Ag-Tech sector accounted for a little over three-fourths of total investments during 2014-2019; some of these are linked to the consumer play of the companies that includes players such as Ninjacart, Jumbotail, Way Cool and Milk Basket.

Ag Fintech, which accounts for about 6 per cent of all deals, will see a lot more action in the coming years with the category riding on an extension play in fintech per se, combined with the government’s push for a digital footprint of Indian agriculture. There will be a lot more players in the Ag Fintech sector soon.

Indian Ag-Tech players are shaping their own business models and they have displayed tremendous agility in adapting to the long value chain. Recognising the challenges in reaching out to more than 120 million small-holder farmers, the Ag-Tech players have adapted a B2B2F – business to business to farmer – model to be successful.

A full-stack offering is seen as a condition to be able to attract farmers. A number of the players in the sector have scaled national boundaries and are present in many continents, including North America.

While corporate investors have not been putting in money in the sector as much as financial investors, it is just a matter of time before large corporates make investing in Ag-Tech part of their regular play, especially during the Covid-19 pandemic when they would lean more and more on the Ag-Tech sector to support them.

Investors, according to the report, have said they will continue to invest in the sector in 2020 and beyond. The sector continued to get investments even during the pandemic with the first six months of 2020 accounting for 10 deals valued at over $75 million.

The sector will see a lot more tailwinds in the coming years.

Covid-19 has accelerated digital adoption across the board and this has a positive impact on Ag-Tech as well.

Seeing the resilience of the agriculture sector, the government too has done its bit by announcing a slew of reform measures – dismantling the APMC (Agriculture Produce Market Committee), removing certain key commodities from the purview of the Essential Commodities Act – and long-term financial support for the development of the value chain.

Nearly 96 per cent of the Indian food supply chain is in the hands of the private sector and therein lies the opportunity to deploy technology.

However, ThinkAg’s report highlights certain important drawbacks in the ecosystem.

For one, the country lacks a cohesive and vibrant platform for entrepreneurs to tap into mentors, angel investors and accelerators. The entrepreneur-incubator-government-corporate network still has a few missing links.

More importantly, the report points out that the growth in investment value has not translated into new and unique deals; only a handful of investments were new ones, while a majority were follow-on rounds in companies that had already raised funds from investors.

Fewer unique deals at the early-stage reflect not just an absence of opportunity at that stage, but also an absence of promising business models. The net result was that investors were happy putting in more money in startups that had raised funds already.

There is, therefore, a need for more India-specific ideas and their incubation in the Ag-Tech space, with an increase in angel activity to help galvanise the sector.

According to the report, the Covid-19 pandemic has accelerated digital adoption and increased use of technology in agriculture, especially in supply chain solutions.

While the farm upgrade solutions space will see subdued interest, emerging consumer trends will continue to drive the Ag-Tech space. The ThinkAg report is optimistic that the sector will continue to attract investors.