Agristartups

prospects and challenges of agristartups

1. Agri Startups : Prospects and challenges EXT-591 Master’s Seminar AKSHITHA TAM/2020-50 1

2. FLOW OF SEMINAR Introduction Indian Startup Scenario Global Startup Scenario Government Initiatives Agri Innovation Centres Research Studies Case studies Prospects and challenges Conclusion 2

3. INTRODUCTION 3

4. 58% of Indian population are dependent on agriculture and allied sectors. Contribution of Agriculture to GDP (2020-21) - 19.9%. Total food grain production (2020-21) - 308 MT. Agriculture contributes around 11.04% to the total National Export. India’s food and grocery market is the sixth largest in the world. Food processing industry accounts for 32% of the country’s total food market. 4

5. T ec h n olo g y t h en TODAY Drones in Agriculture Artificial intelligence Hydroponics Automatic Electronic Tractor 5

6. Still there is a big challenges to be looked into to enrich the agricultural growth in India POPULATION GROWTH UNEMPLOYMENT LACK OF MARKET FACILITY MIDDLEMAN EXPLOITATION LACK OF STORAGE, GRADING AND SORTING TRANSPORTATION PROBLEM MECHANIZATIONS IN SMALL FARMS PRICE FLUCTUATION 6

7. 7 To know the concept of agritech startup and current scenario of agritech startups To Understand the prospects of agritech startups in India O b j e c ti v e s To present case studies highlighting innovative agritech solutions To Understand the challenges of agritech startups in India

8. What is startup? A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model . Startups are young companies founded to develop a unique product or service, bring it to market and make it irresistible and irreplaceable for customers. 8

9. Agri Tech ? AgriTech  is the concept of applying modern technologies to the  agricultural sector  with a view of enhancing and producing with efficiency and generating sufficient revenue to support livelihoods. The concept extends to any kind of applications, practices, products, and services that enhance any aspect, whether input or output, of the agricultural process. 9

10. Agri Startup Startups in the field of Agriculture and its allied sector are called Agri Startups 10 Agritech Startup is defined as an individual or segment of companies using technology in the field of agriculture leading to increase in productivity, efficiency and output. Agritech can be applied across the agricultural value chain and can be in the form of a product, a service or an application .

11. Eligibility Criteria for Startup   Upto a period of ten years from the date of incorporation/ registration. Turnover of the entity should not exceeded one hundred crore rupees. Entity is working towards innovation, development or improvement of products or processes or services , or if it is a scalable business model with a high potential of employment generation or wealth creation. If an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’. Source : Startup India website. Official website: www.startupindia.gov.in 11

12. Global Startups Scenario USA, China and India are the Top three countries in terms of global startups ecosystem followed by Canada, Germany. During 2020 Venture capital funding was $148 billion. In the first half of 2021 venture funding is $ 288 billion. National venture capital investment into US companies decrease to 51% from 84% during 2014.(GSER report 2020). Source: GSER, 2021. 12

13. Investment in Asia’s companies are constantly being increased. In 2021 China start up’s investment raised to $37 billion. India startup’s investment raised to $12.1billion. USA is having 396 Unicorns followed by China 277 and India 70. Agritech unicorn Source: GSER, 2021 13

14. Top nations in startup funding Source: EY Analysis, 2020 14

15. GLOBAL STARTUP ECOSYSTEM SUBSECTOR CONTRIBUTION Source: GSER, 2021 15

16. India’s Startups Scenario India emerged as the  third largest startup  ecosystem in the world. Mumbai stands 1 st in global startup ecosystem ranking among top 100 startup ecosystem of the world. Bengaluru is 23 rd in global startup ranking Delhi is 36 th in global startup ranking. Hyderabad is 61 st in global startup ranking. Bangalore-Karnataka is the Startup capital of India. Source: GSER, 2021 16

17. SECTOR PERCENTAGE DISTRUBUTION E-COMMERCE 33% B2B 24% INTERNET 12% MOBILE APP 10% SaaS 8% OTHERS 13% SECTOR PERCENTAGE DISTRUBUTION ENGINEERING 33% CONSTRUCTION 24% AGRI-SECTOR 12% TEXTILE 10% PRINTING & PACKING 8% TRANSPORT & LOGISTICS 6% OUTSOURCING & SUPPORT 5% OTHERS 32% Sector Wise, the Distribution of Indian Startup Businesses Source: Startups India- An Overview, Grant Thornton, 2020 17

18. Indian Agri tech unicorn ? BILLION DOLLAR DREAM 18

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20. Karnataka and Maharashtra together account for almost 50% of the total Agritech startups opened Startups in India Agri tech SOURCE : NASSCOM, 2020 20

21. Karnataka accounts for two-third of total funding received by startups Startups in India Agri tech SOURCE : NASSCOM, 2020 21

22. SOURCE OF FUNDING 22

23. Self-funding, also known as bootstrapping. It is an effective way of startup financing, especially when you are just starting your business. You can invest from your own savings or can get your family and friends to contribute. This will be easy to raise due to less formalities. In most situations, family and friends are flexible with the interest rate. T he practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet. Some of the popular crowdfunding sites in India are Indiego , Wishberry , Ketto , Fundlined and Catapooolt . Bootstrapping Crowdfunding 23

24. Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. They also work in groups of networks to collectively screen the proposals before investing. They can also offer mentoring or advice alongside capital. Angel investors have helped to start up many prominent companies, including Google, Yahoo and Alibaba. Angel Investors in India – Indian Angel Network, Mumbai Angels and Hyderabad Angels. Angel Investment 24

25. Some of the popular startups contests in India are NASSCOM’s 10000 startups, Microsoft BizSparks , Conquest, NextBigIdea Contest, and Lets Ignite. Early stage businesses can consider Incubator and Accelerator programs as a funding option. Found in almost every major city, these programs assist hundreds of startup businesses every year. Pusa kisan incubator IARI Poshan incubator ( Angrau ). Incubators & Accelerators Raise Funds By Winning Contests 25

26. Venture capitals are professionally managed funds who invest in companies that have huge potential. They usually invest in a business against equity and exit when there is an acquisition. Some of the well known Venture Capitalists in India are Kalaari Capital, Accel Partners, Blume Ventures. They typically look for larger opportunities. Venture Capital Raise Money Through Bank Loans Govt Programs That Offer Startup Capital 26

27. Government Initiatives 27

28. Startup India Startup India is a flagship initiative by government of India, intended to catalyze startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. Official website: www.startupindia.gov.in 28

29. Simplification and Handholding Easier compliance, easier exit process for failed startups, legal support, fast tracking of patent applications and a website to reduce information asymmetry Funding and Incentives Exemptions on Income Tax and Capital Gains Tax for eligible startups; a fund of funds to infuse more capital into the startup ecosystem and a credit guarantee scheme Incubation and Industry-Academia Partnerships Creation of numerous incubators and innovation labs, events, competitions and grants Salient features of Startup India Official website: www.startupindia.gov.in 29

30. Eligibility for Startup Official website: www.startupindia.gov.in 30

31. Initiative for Development of Entrepreneurs in Agriculture (IDEA) The scheme intends to promote agri-business ventures in the North-East Region and assist in establishing agri-business as a profitable venture. It also provides gainful employment opportunities and makes available supplementary sources of input supply and services. Extent and Nature of Assistance . Financial assistance will be extended on need basis, depending upon the nature of the projects and competence of the promoters. Maximum project size could be Rs.25 lakhs. Term Loan = Maximum upto 75% of the project cost. The promoter’s contribution will be at least 25% of the project cost. Eligibility Criteria Graduates and Post graduates in agriculture and allied subjects. Graduates, Post-graduates from other disciplines having experience and skill to undertake Agri Business ventures can also be considered. 31

32. Key components of Innovation & Entrepreneurship Cell under RKVY-RAFTAAR Strengthening of existing agribusiness incubators for integrated rejuvenation and development and setting up new ones (RKVY-RAFTAAR Agribusiness Incubators). Seed Stage Funding of R-ABI Incubates. Agripreneurship Orientation. Idea/Pre-Seed Stage Funding of Agripreneurs Aims Strengthening infrastructure in Agriculture and Allied sectors to promote Agripreneurship and Agribusiness by facilitating financial aid and nurturing a system of business incubation RKVY-RAFTAAR is a unique scheme of MoA & FW, GoI. RKVY-RAFTAAR has been launched in 2017-18 with a component for innovation and agrientrepreneurship. 32

33. The ACABC scheme is being implemented by Ministry of Agriculture and Farmers’ Welfare, Government of India, with NABARD acting as subsidy channelising agency. AGRI CLINIC AND AGRI BUSINESS CENTRES SCHEME The Agriculture Ministry supports agri-entrepreneurship to promote Agricultural innovation. Government of India to fund 234 more Agri start-ups with a 24.85 crore fund. Agriculture Ministry would fund 234 more Agri startups. Total funding of Rs 24.85 crore under a central scheme will go to the agriculture and allied sector businesses. These Agri start-ups have been trained in 29 agri-business incubation centres across the country. Fresh and unemployed agricultural graduates are imparted training (for 2 months) on entrepreneurship avenues in agriculture and transformed as agripreneurs through establishment of need-based agribusiness ventures Purpose - to provide gainful employment and foster entrepreneurship in agriculture and rural areas and to attract investment in agriculture 33

34. Key Agri tech focused Incubators and Accelerators IIM Ahmedabad has launched India’s first Food & Agri-Business accelerator(CIIE) for start-ups in food and agri-business sector ICRISAT launched Innovation Hub (iHub) to support agricultural tech entrepreneurs, scientists and technology experts NAARM launched a- IDEA which is a technology Business Incubator (TBI). NAARM launched Agri Udaan, Food and Agribusiness Accelerator 34

35. SAMRIDDHI – 2021 Agri-Business Incubation Programme for Startups (RKVY)-(RAFTAAR) Agri-Business Incubation scheme to provide support to the start ups having innovative product, services, business process/models at Minimum Viable Product (MVP) stage in the agriculture and allied sectors which are ready to be commercialized. ANGRAU Poshan Incubator, Tirupati. SANKALP – 2021 Agripreneurship Orientation Programme for Startups (RKVY)-(RAFTAAR) Agri-Business Incubation scheme providing an opportunity to students, youth, smart farmers, women or any interested individuals in Agri and allied sectors for working on their innovative ideas for development of product/service/prototype towards establishing their Agri based startups. 35

36. Recent Glimpse WayCool Foods, India’s fastest growing agri-commerce startup, has secured $117 million . overtaking  DeHaat’s $115 million to become India’s largest agritech funding round. Startup india was launched on 2016, and in 2021, the date marks the first National Startup Day-16 JANUARY 36

37. 37 NEWS REPORTS

38. PROSPECTS 38

39. Employment Generation Streamlining Supply Chain Untapped Agritech opportunity 22 Processing and Exports Resource Minimization The Digital Infrastructure Custom hiring centres Use of technology in sorting/ grading

40. Focus areas for agri - tech startups Farming-as-a-service Better access to the input Processing and packing Market linkage models Fintech for farming IoT for farming 40

41. Challenges 41

42. Lack of Financial services Long Gestation Period Technology Affordability Return for the Investors Lack of mentorship Government Regulations and Policies 42

43. Increased and timely support to early stage start-ups . Need for large companies to collaborate with start-ups. Need for Corporate and Government accelerators to help Agritech start-ups. Curriculum has to reframe to incorporate required modifications and exposure to make graduates business minded. Arranging workshops, webinars in agricultural universities related to agristartups. provide finance linkages to agri graduates, ensure farmer and industry connect to startups. Youth should be encourage more towards Agri startups. 43 STRATERGIES TO PROMOTE AGRI STARTUPS

44. CASE STUDY 44

45. NINJA CART Startup Name Ninja cart Headquarters Bangalore , Karnataka, India Industry Logistics , Supply Chain Founded 2015 Founders Ashutosh Vikram, KartheeSwaran KK, Sharath Loaganathan , Sachin Jose, Thirukumaran Nagarajan, Vasudevan Chinnathambi CEO Thirukumaran Nagarajan Area Served India Website www.ninjacart.in Source : www.ninjacart.in 45

46. How it works 46

47. Active regions Im p act Operationally present in 7 cities- Bengaluru, Delhi, Pune, Ahmedabad, Chennai, Mumbai, Hyderabad 20,000 farmers, serves over 70,000 customers every month, movement of 1400 tonnes of perishables from farms to businesses, every day, in less than 12 hours . Company had a revenue of INR 27cr. in 2016-17, INR 54cr. in 2017-18 and INR 132cr. in 2018-19. The revenue grew at a rate of 388% between 2016 and 2019 47

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50. Startup Name CORNEXT Headquarters Hyderabad Founded 2015 Founder Madhav Kshatriya, Amarnath Sarangula and Feroz Ahmed CEO Madhav Kshatriya, Area Served India Website https://www.cornext.in 50

51. Product summary Silage baling is a process of compacting chopped and inoculated maize crop, tightly wrapped with UV-protected recyclable film. This way it retains moisture for up to 12 months, meaning green fodder is then available all year. Aside from improving the health and milk yield of cattle, this technology also makes it easier to store and transport fodder. Impact Cornext has produced and distributed up to 1 lakh metric tonnes of baled silage as high quality green fodder, equivalent to four months of summer ration for 1 lakh animals. The Mini Silage Baler has a daily production capacity of 20 metric tonnes, equal to 2,000 animal rations per day. Support and recognition Cornext received the 2019 Animal Husbandry Grand Challenge Award from the Ministry of Fisheries, Animal Husbandry and Dairying. The Andhra Pradesh Government has also partnered with Cornext to draft the Fodder Security Policy. Website https://www.cornext.in Source : National Startup Awards 2020 (by## StartupIndia ) 51

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53. Startup Name Urban Kisaan Headquarters Hyderabad, Andra Pradesh Industry Vertical farming, Hydroponics home kit Founded 2017 Founders Vihari Kanukollu Sairam Palicherla Srinivas Chaganti Sampath Vinay CEO Vihari Kanukollu Area Served India Website WWW.UrbanKisaan.com 53

54. The firm’s innovative home kits help people grow food in their balcony by spending less than 10 minutes a week on the task. Users get notifications on their cellphones every week. reminding them of the activity. The product was developed at a-idea incubator in NAARM Hyderabad. scientists work with the farmers educating and upskilling them on the ground to make the best use of progressive farming practices like hydroponics, soilless farming and vertical farming. From helping them identify seed varieties, proper seeding techniques, to plant nutrient formulations and how to bring about the best yield in controlled environment growing. We introduce them to the concepts of sustainable farming methods where the typical water consumption is 95% less than traditional soil farming, and harnessing the power of solar to run the farms that minimise our carbon footprint at every level, and not to forget the employment opportunity that each and every acre of our farms generate for farmer families across India. 54

55. 48 plants Cost : 19,900/- 18 plants Cost : 9,900/- 36 plants Cost :15,500/- 24 plants Cost : 12,900/- HYDROPONICS HOME KITS 52 plants Cost :65,000/- 55

56. ORGANIC MANDYA 22nd June 2015 Madhu Chandan C Mandya , Karnataka Organic Mandya Mobile app, online marketing Founded in Founders Headquarters Product Name Technology used 56

57. Organic Mandya was started with the objective of helping farmers create a self-sufficient lifestyle by adopting chemical-free farming. However, the market at the time proved insufficient for the farmers that took up the initiative, so Organic Mandya’s sales platform was put into place. After the first organic farmers supermarket in Mandya , the brand today owns and operates about seven of them across Mandya and Bangalore. Impact Mandya has created 320 organic farmer self-help groups in about 300 villages, as well as 270 women's kitchen garden groups . In total, 12,000 farmer families are under Organic Mandya's umbrella. Support and recognition Received the Nadaprabhu Kempegowda Foundation award in 2017. Website https://www.organicmandya.com Source : National Startup Awards 2020 (by## StartupIndia ) 57

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60. Founded in Founders Headquarters Technology used 2012 Shashank kumar Bihar Android based front end for last mile service providers and Farmers, cloud telephony for call centre. 60

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63. Founded in Founders Headquarters Technology used July 2015 Karthik Jayaraman and Sanjay Dasari Chennai, Tamil Nadu automation, artificial intelligence, and machine learning large part of this wastage is due to repeated handling and transport of sensitive and perishable food products.  WayCool is using apps and technology to truly transform how farmers harvest the produce and how much is actually shipped to reduce wastage. It also uses IoT devices with these apps to track quality of food as it passes through the various links. 63

64. Way Cool is a startup which has worked upon the supply chain of agri-products. It sources fresh fruit and vegetables from farmers and sells to small local shops, modern retail outlets, and HORECA (hotels, restaurants, and catering establishments) . It predominantly operates in Tamil Nadu via a distribution hub in Chennai. 250 Tonnes - Delivery Per Day Global Expansion Sourcing Partner For Exporters Into The Middle East And East Asia. Imports Products For Clients, From Europe And North America 7 Distribution Centres Across 5 Cities Directly Additional 18 Sub-Distribution Centres 64

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67. Founded in Founders Headquarters Product Name Technology used Other services 2019 Havyas K. S ( B.Sc.Ag ). & Nithin Singh Bengaluru, Karnataka Precision farming as a Service Sensors, Drones Hydroponics (home kit and outdoor setup) Hydroponics Training, Consultation Transforming the Future of Farming 45 BEEGLE AGRI TECH

68. Intello Labs Founded in Founders Headquarters Product Name Technology used Works by digitizing the quality assessment of fresh fruits and vegetables. There technology transforms quality processes, making them objective, efficient, and less wasteful. From growers to packers, from exporters to food services, anyone can use the smart, scalable solutions to digitize food quality, achieve fair pricing and reduce food wastage. 2016 Milan Sharma, Nishant Mishra , Devendra Chandani and Himani Bengaluru, Karnataka Intello Labs Grading App AI (Smartphone based) 30 68

69. Research study 69

70. 19% More than 5 years 5 years 33% 3 years 43% F a r me r s’ Mindset P o li cy Key Challenges for Indian Agritech Firms 1 years NASSCOM Agritech CEO Survey 2 020 Lack of Digital I n f r a st ru c tu r e Fund i ng 5% First Indian Agritech Unicorn ? More than 50% Agritech CEO’s do not expect an Indian Agritech unicorn within the next 5 years 39% 29% 20% 12% ~40% of Agritech founders feel that raising funds is the biggest challenge 70

71. Sl. No Challenges Percentage (%) 1 Product had no market 42 2 Firms ran out of cash 29 3 Lack of right team 23 4 Pricing issues 18 5 Firms had poor product 17 6 Poor marketing 14 7 No investor interest 8 n=101 Why start-ups fail, according to their founders. -Griffith ERIN (2014) 71 CB Insight, 2018 report

72. Entrepreneurial India: How startups redefine India’s economic growth Undifferentiated business models 77% Lack of sufficient skills 70% Insufficient funding 65% Inadequate mentoring of satartup leaders 64% Unethical business conduct by startups 64% Inexperienced leadership 53% Accelerate development of new ideas 77% Improve customer experience 67% Accelerate development of new products/ services 61% Opportunity to mentor startups 61% Access to better skills and talent 52% Leaders of established companies identify the benefits of collaborating with startups major reasons for failure of startups as identified by Venture capitalists 72 Mehrotra, N et al. (2016) AgTIVE report, 2019

73. 73 Sl. No factors Percentage (%) 1 Focused on supply chain 50 2 Solving small and marginal farmers 80 3 Own fund 100 4 Developing unique and innovative solutions 80 Pro-agripreneurial factors for the formation of agristartups in India 73 CB Insight, 2018 report

74. Overall, the ecosystem for agritech startup in the country is promising. The government, through several initiatives playing their part in boosting innovation and entrepreneurship in the sector. Agritech startups are playing key role in agriculture value chain by reducing cost of cultivation, providing inputs, linking markets, increasing employment helping the farmers to tackle problems at all the stages of farming. Agri graduates and youth should be encouraged more towards agristartups There is a need to conduct more research on this area in order to promote more agristartups in India. 74 CONCLUSION

75. Anand, A. and Saravananraj . 2019. Agritech Startups: The ray of hope in Indian agriculture. Indian Journal of Extension Education & Rural Development. 26 : 21-24. CB Insight Report, 2018. Why the startups are failing. EY Analysis, 2020. Agritech towards transformation. Promoting agristartups in agriculture-Ministry of agriculture and farmers welfare Startups India- An Overview, Grant Thornton, 2020 NASSCOM website: http://nasscom.in Ninjacart website: www.ninjacart.in StartupIndia website : www.startupindia.gov.in Cornext website: https://www.cornext.in Mandya organic website: www.organicmandya.in Waycool website: https://waycool.in D ehaat Website :https ://agrerevolution.in 75 references

76. Agriculture and food E-News letter: http://www.agrifoodmagazine.co.in Manage website:http ://cia.manage.gov.in Agriculture innovation and developmental cell: https://www.angraurabitpt.org https://yourstory.com/2020/12/agritech-startup-farming-as-a-service-ujjay/amp https://timesofindia.indiatimes.com/business/india-business/india-becomes-third-largest-startup-ecosystem-in-the-world/articleshow/85871428.cms https://www.thehindubusinessline.com/multimedia/audio/when-could-we-spot-the-first-indian-agritech-unicorn/article34687194.ece https://economictimes.indiatimes.com/markets/cryptocurrency/top-cryptocurrency-prices-today-bitcoin-ethereum-solana-add-up-to-3/articleshow/87708694.cms 76