India's AgTech investment growth and potential for food security

Is it time for AgTech investors to turn their attention to India? In its recent report “AgFoodTech in India 2025”, ThinkAg outlines how Indian AgTech investments grew to over $410 million in 2024, an almost 30% increase from the previous year’s $320 million. Although the 2024 figure still pales in comparison to the ~$900 million in 2022, ThinkAg argues that this 65% drop between 2022 and 2023 was in line with other growth sectors. The rebound in India contrasts with the U.S., where AgTech investment is still in decline. The report states that investments could reach as high as $800 million in 2025, if some later stage private deals are completed. Even if this level is not achieved, which I doubt it will, the Indian AgTech investment market is well positioned for strong growth. ThinkAg’s bullishness is based on growing investor interest in AgTech, more capital-efficient business models, and an increasing number of start-ups with a near-term path to profitability and a viable route to an IPO. The ability to achieve an exit is of particular importance, as a lack of exits (IPO and M&A) is making capital raising so hard for U.S. AgTech companies. My own bullish view of Indian AgTech is based on my conversations with Indian thought leaders, who tell me about the challenges that Indian farmers face with producing and distributing food through a deeply inefficient supply chain. Not only does this cause food waste, in a country where many people suffer from food insecurity, but it leads to higher costs, shorter shelf-life, and more spoilage, due to the longer times it takes for products to reach consumers. Unlike the developed world, where much of the food waste is due to uneaten or unused food being thrown out by grocery retailers, food service providers, and consumers at home, food waste in India, like many developing countries, happens during the distribution process. This explains why a majority of AgTech capital is being invested in digitalization, Fintech and supply-chain technologies, because these innovations will make the supply chain more efficient and cheaper, thus reducing food waste. India is already one of the leading developers and exporters of information technology and has a rapidly growing biotech sector. Consequently, I believe it can rapidly modernize its agriculture sector by leveraging its capabilities in AI, data analytics, genetics, and machine learning. India can significantly increase crop yields, which remain far below the U.S. and other developed economies, through implementing advanced seed-breeding technologies, more-efficient use of crop inputs, and precision-farming techniques. If India can meaningfully increase yields, not only can it dramatically reduce food security concerns at home, but it can become a food-exporting powerhouse. https://lnkd.in/gURgBvcw EcoTech Capital Cy Obert