The ongoing funding winter in the startup sector has begun to impact the pace of innovation in the agritech ecosystem, which offers technology-based solutions like offtake marketplaces, storage and transportation services and agronomy advisory that help farmers get better returns on their crop.
Agritech startups said they have scaled down expansion plans to conserve cash and are focusing on profitability.
“Those startups which have mopped up funds through Series C & D rounds are not seeing fresh funding rounds and are now scaling down initiatives,” said Amit Sinha, cofounder of Unnati Agri that provides digital technology services to farmers. “This may slowing down the pace of innovation, but startups are now looking at improving their margins and profitability.”
The funding slowdown could lead to investors taking a “wait-and-see” approach towards late-stage startups, with expectations of fair valuations and a keen eye on unit margins, said a recent report published by the Boston Consulting Group, Times Bridge, and TiE Delhi-NCR.
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India is home to 3,000 agritech startups and their role becomes important at a time when exports of major agriculture and processed products are increasing.
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In fiscal 2023, these exports are likely to touch $26 billion, as per the latest estimates of the Agricultural and Processed Food Products Export Development Authority, exceeding the government’s target of $23.56 billion.
Rajamanohar Somasundaram, founder & CEO of Aquaconnect, a full-stack aquaculture input and output platform with embedded fintech, said: “This will be a year of survival and bootstrapping, as opposed to hypergrowth. It is the cockroach startups that can win this battle over the unicorns. Positive unit economics, right product-market fit, and positive margin – startups that tick these boxes are well-poised to attract significant investor interest.”
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