Agriculture has always been the backbone of India. It has been the primary occupation of almost 80 percent of Indians since long. The Indian startup industry understood this dependency of the estate on the field very well and came up with a lot of ventures in order to cash on this dependency. And, now these agri based start-up firms have caught the fancy of the Venture Capital funds.
According to Omnivore Partners, a venture capital firm focused on agriculture and food-tech, "Venture capital funding in agri start-up firms is picking up in India and is expected to increase in the coming years." It associates this increase in VC funding to the lack of institutional funding through banks and Non- Banking Financial Company (NBFC). Apparently, this lack of institutional funding has prompted the entrepreneurs of these startups to go for venture capital even at a high cost.
Speaking to the PTI on the occasion of a CII event, Jinesh Shah, a Founding Partner at the Mumbai-based Omnivore Parters said, "There has been increase in VC funds flowing in start-up companies operating in the field of agriculture. We have made investment in atleast 11 firms including weather forecasting company Skymet."
The 11 companies in which the investments have been made cater to precision farming, farm mechanisation, sustainable farming, and innovative foods.
"We are currently investing between Rs 5,00,000 and Rs 30,000,000 in agri-start up companies, which we plan to scale up to Rs 60,00,000 in the coming years," added Shah.
However, the number of agri based startups is much lower when compared to the number of startups in the technology and e-commerce sector. The main reason for this huge disparity in the numbers is because there are too many problems in the entire value chain of agriculture.
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