Why Agritech Startups Failed in India? скачать в хорошем качестве

Why Agritech Startups Failed in India?

Check out Yenmo by clicking on this link - https://bit.ly/BwM_Yenmo01 00:00 - Intro 01:24 - State of Indian Agriculture 05:15 - $24 Billion Dream 08:23 - Reality Check and Challenges 13:09 - Sponsored Part 14:11 - Road Ahead In 2019, Tiger Global invested $100 million in Ninjacart, a B2B agritech startup, marking one of its largest bets in India. This put agritech in the spotlight, leading to an explosion of startups and a surge in funding, growing from $60 million in 2017 to $895 million in 2021. However, the sector's promise didn’t materialize. By 2024, funding dried up, and many startups shut down, making it one of the worst years for Indian agritech. What went wrong? The State of Indian Agriculture India has a massive agricultural workforce—about 50% of its population—but the sector contributes only 18% to GDP, showing extreme inefficiency. Compared to the US, where only 10.4% of the population is engaged in agriculture but contributes 5.5% to GDP, Indian farmers earn significantly less. The inefficiency stems from: Small Landholdings: 70% of Indian farmers own less than 1 hectare of land, which limits their productivity and income. Low Income & Debt: The average Indian farmer earns around ₹9,000 per month, barely enough to sustain a family. Less than 20% have access to formal credit, forcing them to borrow from informal lenders at exorbitant interest rates, pushing many into a cycle of debt. Traditional Farming Methods: Limited access to modern technology and reliance on rain-fed irrigation make Indian farming vulnerable to climate changes. The $24 Billion Dream The agritech boom was fueled by a 2019 EY report projecting the sector to grow from $200 million to $24 billion by 2025. Startups aimed to: Increase farmers’ income by eliminating middlemen. Introduce advanced farming technology like IoT and AI. Streamline supply chains for higher efficiency. Venture capitalists and the government saw potential in this vision, leading to a surge in funding. The 2020 farm laws were expected to help, allowing farmers to sell directly, engage in contract farming, and improve storage infrastructure. However, these laws were later repealed due to farmer protests, dealing a blow to startups. Challenges & Reality Check The agritech dream failed due to multiple factors: Role of Middlemen – Startups underestimated the importance of middlemen, who not only act as traders but also provide credit to farmers. Greenikk, a banana trading startup, tried to bypass them but failed, ultimately working with the same middlemen they sought to eliminate. Lack of Farmer Adoption – Many startups introduced IoT and AI-driven solutions, like Intello Labs’ image analytics for produce quality. However, with low incomes, farmers couldn’t afford these tools, and many found the data they provided to be impractical. VC-Driven Growth Model – Startups pursued aggressive expansion without sustainable revenue models. ReshaMandi, a silk supply chain startup, burned cash by paying more for produce than market rates and expanding into unrelated businesses. Once VC funding slowed, it collapsed. The Road Ahead The agritech sector’s failure highlights that money alone can’t solve India’s agricultural crisis. A sustainable approach is needed: Reducing agricultural dependence – Moving India’s workforce from farming to other sectors, similar to developed economies. Long-term investment models – Startups must focus on profitability over aggressive expansion. Collaborating with existing structures – Rather than eliminating middlemen, startups should work with them to create better efficiencies. Agritech has potential, but it requires patient capital, policy stability, and solutions tailored to the realities of Indian farming.