eGrocery remained the most funded category, even though funding dropped by 46 per cent year-over-year to $420 million
In 2023, Indian agrifoodtech startups raised $940 million across 129 deals, which was a 60 per cent decrease from 2022, according to the India 2024 AgriFoodTech Investment Report.
Although the number of deals remained nearly the same at 129 in 2023 compared to 133 in 2022, the decline in total funding suggests that the average deal size decreased. This trend was not unique to India, as global agrifood tech investment dropped by 50 per cent year-over-year due to fewer and smaller deals. Interestingly, deal activity in India remained consistent at 129 deals, just four less than in 2022. The total funding in 2023 was also comparable to the pre-Covid levels in 2019, indicating a return to more stable valuations after a period of inflated values.
Both AgFunder and Omnivore identified intriguing deals at the intersection of food and agriculture, with investments extending beyond traditional sectors. Examples include funding for diet-related healthcare startups and fintech initiatives aimed at rural economies. Diversifying investments in this way has the potential to enhance fund returns and underscores the interconnectedness of the food and agriculture industries with other sectors. Notably, climate tech is also gaining attention as one-third of greenhouse gas emissions are related to the sector.
In 2023, the median deal size across all stages of funding decreased significantly, indicating lower valuations. Early-stage deals, in particular, received continued interest from investors but at lower valuations compared to previous years. The supply chain as a whole received substantially less funding in 2023, with Midstream startups experiencing the most significant decline at 80 per cent.
eGrocery remained the most funded category, even though funding dropped by 46 per cent year-over-year to $420 million. Agribusiness Marketplaces & Fintech was the second best-funded category, raising $162 million, which represented a 62 per cent decline. Together, eGrocery and Ag Marketplaces & Fintech accounted for 62 per cent of the capital raised in 2023. Furthermore, many later-stage startups raised follow-on bridge capital in 2023, resulting in smaller deal sizes. This trend mirrors global agrifood tech investment patterns, where later-stage startups have faced down rounds and overall valuations have been significantly adjusted.