Latest News | Funding in Agrifoodtech Startups Down 60pc Last Year to USD 940 Mn: Report

New Delhi, Apr 30 (PTI) Funding in Indian agri-food technology (agrifoodtech) startups declined 60 per cent annually to USD 940 million last year due to smaller deal sizes and lower valuation, according to AgFunder and Omnivore report released on Tuesday.

"In 2023, Indian agrifoodtech startups raised $940 million across 129 deals, down 60 per cent from 2022. The number of deals remained almost flat with 129 closing in 2023 compared to 133 deals in 2022, indicating smaller deal sizes given the steep decline in dollars raised," according to a statement.

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More early-stage deals closed in 2023 than in 2022 indicating continued interest by investors in the category but at much lower valuations than in previous years, it added.

"The median deal sizes dropped significantly year-on-year across stages and most dramatically at the late stages: 50 per cent at the early stages (Seed and Series A), 39 per cent at the growth stages (Series B and C) and 89 per cent at Series D and later," the company said.

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Louisa Burwood-Taylor, Managing Editor of AgFunder News, said the global downturn in agrifood investments is attributed to fewer and smaller deals, but the situation in India indicates a fundamental shift..

"Although the number of deals remains nearly unchanged, the investment approach in India has become more selective and merit-based, suggesting a gradual and promising revival of the sector," said Louisa.

Out of the total funding, the investments in eGrocery stood at USD 420 million, agribusiness marketplaces at USD 162 million and Online Restaurants & Meal Marketplaces at USD 119 million.

Mark Kahn, Managing Partner, Omnivore, said, “What we see unfolding before us is the return of realistic valuations that reflect the operational and financial achievements of the companies.

"From unbridled growth strategies, the focus is squarely on prioritizing building a strong business model, focusing on profitability, and creating value for customers and stakeholders," Kahn added.

"Like 2023, this year will be a great vintage year to invest in promising startups, especially for founders who are building differentiated and unit economically viable businesses from the beginning," Khan said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)