FB Pixel no scriptIndian agritech startups are surviving and growing during the pandemic | India Digest Volume 64 | KrASIA
MENU
KrASIA
Newsletters

Indian agritech startups are surviving and growing during the pandemic | India Digest Volume 64

Written by KrASIA India Digest Published on     6 mins read

Share
In this round of India Digest from August 20 to August 26, 2021, read our big story of the week, the weekly buzz, and more.

Subscribe to our newsletter to read this first thing on Friday morning. This is the preview of what you will receive in your inbox.

Last week, a report by Bain & Co. said the Indian e-commerce market grew by 25% to reach USD 38 billion in the financial year ending March 2021. Furthermore, it projected the industry to touch USD 140 billion over the next five years. Notably, the researchers said, much of this growth will be driven by non-metro markets.

“Small-town India will fuel this growth, accounting for four out of every five new shoppers,” they said.

A part of this new growing user base is farmers in the country, who turned to the internet to buy seeds, pesticides, and other farming ingredients during the lockdowns imposed last year to curb the spread of COVID-19.

Although it might seem like a small target audience with lower purchasing power, the farming community may make up for a market with potential. For context, India’s official farmer population stands anywhere between 100 million and 150 million. A growing number of local startups are tapping this segment to not only sell them farm inputs but also to create an entire ecosystem, where they will help farmers grow their produce and enable them to sell crops as well.

For this week’s big read we looked at Indian agritech startups and how they have emerged stronger since the pandemic hit the country, ready to grab a new emerging opportunity.

The Big Read

Indian agritech startups are surviving and growing during the pandemic

What Happened

Last year, when India was under months of lockdown to curb the rising infections of COVID-19, the majority of farmers had no way of going to the market to buy farming ingredients. Surendra Prasad, a cauliflower farmer from a village in the North Indian state of Bihar, was one of them. His teenage son then discovered multiple online platforms such as Agrostar, BigHaat, DeHaat, and Gramophone that could help his father get hold of the products he needed to farm.

The local agritech companies, which sell farm inputs like pesticides, fertilizers, seeds, and farming equipment online, have been seeing a rise in demand since the pandemic. Earlier, they had to employ salespeople who would visit these farmers to help them place orders from their phones.

But when these sales executives couldn’t travel to the farms due to the lockdown, agritech companies started seeing farmers like Prasad placing orders themselves, albeit with some help.

“Due to lockdown, when farmers’ access to local retailers was limited, they started looking up online, discovered BigHaat, and started placing orders themselves,” Sachin Nandwana, CEO and founder of BigHaat, told KrASIA.“During May last year, we witnessed 80% growth in our business. Compared to 2019, our growth quadrupled.”

Due to COVID-19, the country’s USD 370 billion agriculture sector has observed a complete transformation that is expected to continue in the coming years.

What Does It Mean

The agritech sector in the country has been growing exponentially and is projected to grow to a USD 30 billion–USD 35 billion market by 2025, according to a study by Bain & Co. The report said online sales of produce, farming inputs, and logistics are going to be the key drivers for the sector.

Many agritech startups are looking to create an end-to-end platform for farmers to source information on weather, soil, and crops; buy farm input products; and sell their produce, among other things.

For instance, BigHaat is planning to go into a full-stack model to provide inputs to farmers, guide them throughout their farming process, and buy back crops in the end.

Apart from e-commerce, BigHaat provides farmers with value-added services such as agri-news, a communication forum called Kisan Vedika, and a platform called crop doctor, which allows farmers to upload the photo of their infected crops to seek help from experts and peers.

“Of half a million monthly visitors, most of them use features like crop doctor and Kisan Vedika. We aim to make farmers realize the importance of technology and how it can be easily harnessed to directly benefit them,” says BigHaat’s Nandwana.

The Weekly Buzz

1. In yet another sign of the Indian startup ecosystem’s maturing, large Indian startups explored corporate venture funding to buy stakes in smaller companies. Earlier this month, Dream Sports, a gaming unicorn backed by Tiger Global, launched a USD 250 million corporate venture fund to invest in startups across sports, gaming, and fitness. Similarly, in June, omnichannel eyewear retailer Lenskart constituted a USD 20 million fund to back product and technology startups. These startups are strategically investing in firms that are building allied technologies or working in adjacent sectors to expand their ecosystem for inorganic growth.

2. Indian logistics unicorn Delhivery acquired smaller rival Spoton to strengthen its B2B operations and grab a bigger piece of the pie from the country’s USD 215 billion logistics market. Although the company did not disclose the financial details, local media reports peg deal size at around USD 300 million. The development comes at a time when the Gurugram-based startup has begun the groundwork to list its shares in public markets early next year. Delhivery is reportedly looking to raise around USD 500 million through the IPO.

3. Indian digital ledger startup Khatabook raised USD 100 million from Tribe, Moore. With fresh funds in its kitty, the three-year-old startup plans to diversify its business by rolling out financial services for small businesses. The funding round—a mix of a primary infusion and a secondary share sale by existing shareholders, including early investors and employees—values the company at USD 600 million. Khatabook also said it would buy back ESOPs worth USD 10 million.

4. Indian automobile marketplace CarTrade made a weak debut on bourses. The company, which was backed by marquee investors like Warburg Pincus and Temasek, listed its shares on the Indian stock exchanges with a 1.1% discount to the issue price of INR 1,618 per share. By the end of the day, shares were down 7.3% due to low investor interest, although the company’s offer was oversubscribed 20.29 times, with the retail portion being booked 2.74 times.

Q&A Of The Week

5 observations about Asia’s changing startup landscape by Picus Capital

Munich-headquartered venture capital firm Picus Capital entered Asia last year. It is now shoring up its presence in East and South Asia, particularly in China, where it recently opened an office. Picus is closing its first Chinese investment this week, just as it is finalizing its sixth deal in India.

The firm focuses on early-stage tech startups across finance, logistics, health and wellness, renewable energy, real estate, education, and e-commerce. In India—where startups have raised a record USD 17 billion in the first seven months of the year—Picus is backing companies that are addressing infrastructure gaps in areas like finance and healthcare or have developed B2B SaaS solutions for the global market.

Picus’ investment thesis in China aligns with its global focus areas. It hopes to team up with local entrepreneurs seeking an investor with a global perspective. However, with recent changes in regulations in the country, the investment firm is looking to stay away from edtech and focus on new emerging sectors like enterprise tech, health, cross-border e-commerce, asset management, insurance, D2C brands and their enablers, the influencer economy, and remote work.

We spoke to Alexander Kremer and Florian Reichert, partners at Picus Capital, to understand how they look at the changes happening in startup ecosystems from China to India.

Top Deals This Week

In partnership with Tracxn

What We Are Reading

Covid boosted the adoption of digital-first consumer brands

Kanwaljit Singh, who co-founded Helion Venture Partners and then Fireside Venture in 2018 to back consumer brands, says post the pandemic, the concept of wellness has become all-pervasive across categories, whether it is food and beverages, home or personal care and beauty. In this interview, he talks about how mega brands can be created by leveraging D2C, e-commerce, and offline trade.

The Spoiler

Tune in next week to find out how kids are using social media to become influencers.

Share

Auto loading next article...

Loading...