India’s agritech sector is entering a phase of measured maturity, shifting from a period of rapid fundraising and aggressive scale-ups to one prioritising sustainable revenues, profitability and consolidation. Recent data point to selective funding revival, stronger unit economics and strategic mergers shaping the sector’s near-term trajectory.
Funding journey: decline and selective recovery
From 2020 to 2025, roughly 160 Indian agritech startups raised over $2 billion across more than 250 funding rounds, with the bulk of capital going to growth-stage companies. Investment peaked in 2021–22 during the wider startup boom, when investor appetite for technology-led agricultural disruption was strong.
Global market correction and a broader investor shift toward profitability saw funding taper from 2023. Although 2024 registered early signs of recovery, overall deal volumes remained subdued as backers adopted a more disciplined approach, favouring startups with proven business models and predictable revenues.
In recent months, large, selective rounds have reappeared—mainly for companies demonstrating stable unit economics and demonstrable paths to long-term viability—indicating investor interest is returning, albeit cautiously.
Emphasis on profitable, sustainable business models
There has been a clear move away from growth-at-all-costs toward models that deliver margin improvement and sustainable cash flows. Startups that blend digital tools with deep understanding of supply chains, pricing cycles and farmer behaviour are emerging as stronger operators.
Many firms are shifting to B2B models, supply-driven production and demand predictability to improve margins. By tightening operations and demonstrating positive or near-positive unit economics, these companies are reducing reliance on continuous external capital and helping restore investor confidence.
Consolidation and strategic partnerships
Consolidation is becoming a defining theme as startups seek scale efficiencies and broader geographic reach without excessive capital burn. Mergers and strategic alliances enable pooling of technology, logistics and farmer networks, reducing duplication and improving resilience against market volatility.
Complementary tie-ups are creating larger, more robust entities capable of weathering funding cycles and expanding across the value chain—from input supply and farm advisory to aggregation, processing and distribution.
Persistent structural challenges
Despite positive developments, agritech still represents a relatively small share of total startup funding in India. The sector’s dependence on rural infrastructure, fragmented farm holdings, weather variability and price fluctuations makes scaling inherently challenging compared with consumer tech or fintech.
Notably, India has yet to produce a unicorn in agritech, underscoring the difficulty of achieving large-scale valuation while preserving profitability and on-ground impact.
Outlook: technology and execution will determine winners
Adoption of data analytics, artificial intelligence, traceability solutions and integrated farm management is likely to accelerate, but success will depend on bridging digital offerings with real-world agricultural practices. Startups that align technology with field-level realities—helping farmers increase productivity, reducing waste and improving market linkages—will be better positioned for sustained growth.
The sector appears to be moving from experimentation to execution: investors and founders are prioritising patience, efficiency and durable business models that deliver measurable value for farmers, enterprises and consumers.
