Indian Agritech Sector Received ₹6,600 crore PE Funding in 4 Years: Bain-CII Report

“Private equity investments in the agri-tech space have skyrocketed over the past four years, growing at more than 50% per year.”

“Private equity investments in the agri-tech space have skyrocketed over the past four years, growing at more than 50% per year.”

Special Rapporteur

According to a new report by Bain & Company and the Confederation of Indian Industry (CII), private equity investment in India’s agri-tech sector has been growing at more than 50% annually and will amount to about £6,600 billion by 2020.

The report, titled “Innovation in India’s Rural Economy: Disruptive Business Models are Stimulating Inclusive Growth in Agriculture and Rural Finance,” pointed out that India’s rural economy contributed almost half of the country’s total GDP in 2019-2020. “Two-thirds of India’s population has been involved in the rural economy over the past two years and agriculture – the largest sub-sector within the rural economy – has had the highest share of output, contributing about 37% of total rural GDP,” it said called it.

It noted that India’s agricultural sector has grown steadily at a compound annual growth rate (CAGR) of 11% since 2015, “supported by government and private sector initiatives to improve its physical and digital infrastructure”. It has also experienced the highest disruption in terms of smartphone and internet penetration. This ecosystem is now at an inflection point, and companies that address inefficiencies across the value chain have explosive growth potential, it said.

“Significant national and international investment is being pumped into the sector to improve efficiency and access to credit. Private equity investments in the agri-tech sector have skyrocketed over the past four years, growing by more than 50% a year to reach around £6,600m by 2020,” it said, adding that investors would have focused on ways to address systemic problems, build sustainable systems and ensure inclusive growth.

Several global tech giants see this area as a new growth opportunity and are investing in innovative solutions for crop health monitoring and yield estimation, the report says.

“The disruption in India’s food and agriculture will evolve from traditional agriculture to new agricultural models, advanced agri-tech services and new food products,” said Parijat Jain, partner and head of Bain’s agribusiness practice in India. “Over the last six years, several start-ups have emerged to reduce systemic inefficiencies between inputs and marketplaces, precision farming, processing and storage,” he added.

The report also found that Unified Payments Interface (UPI) transactions have doubled over the past year, accelerated by the pandemic, and today processes eight times more transaction value than credit cards, reflecting smartphone access, lower data costs and Aadhaar’s build-up of a digital identity, which enabled services such as Know Your Customer (KYC) and e-signature.

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