Startup Mahakumbh: 'India's rural, agri-tech startups lagging behind'

While India’s startup ecosystem is maturing, rural agri-tech startups are still an untapped opportunity and are lagging behind, industry players focused on rural innovation said on Friday during a panel discussion at the second edition of Startup Mahakumbh. The three-day event is taking place at Bharat Mandapam here.

 

Speaking on the theme Financing Bharat: Unlocking Startup Growth Beyond India One, Ajay K Sood, deputy managing director of NABARD, said, “Rural India is really facing this crisis as agriculture is the only sector which has been left off the ground. If India has to achieve its Viksit Bharat dream, then rural areas have to develop and to solve the problems of the rural areas, rural agri-tech is the solution.”

   

Echoing Sood’s thoughts, Rajat Tandon, president of Indian Venture and Alternate Capital Association (IVCA), said that even if agri-tech has immense potential for growth and innovation, it is largely an overlooked opportunity. “Out of $50–60 billion which is invested every year, only a billion dollars goes into agri-space, which is very less. It's probably time to look at how we as domestic capital kind of boost it up.”

 

On the investment opportunities, Tandon added that in Tier-II and Tier-III cities, the cost of investing in a startup is 30–40 per cent less than in metro cities. “It is an untapped market. There are different challenges in these cities, which makes it an opportunity for more innovation to be built. Even talent is far more affordable in these cities.”

 

Vikas Bali, chief executive officer of Intellecap, which provides advisory and consultancy services, said that awareness, accessibility, and affordability are key issues in addressing the last mile in the rural areas. “You cannot design products and services for Bharat (rural India) the way you do for India (urban India),” he said.

 

Giving an analogy of sachetisation of shampoos, he said it is important to think how to sachetise products and services while addressing the rural population. He added that there is a need to build trust with the rural segment, and only then can the startups operating in rural India scale up.

 

Kishor Jha, co-founder and chief executive officer of Ergos, an agri-tech startup, also reiterated that in rural India, while startups need to operate with speed and efficiency, they first need to build trust in the consumers’ minds.

 

Industry experts said that to boost startups in the agri-tech space, there is a need for collaboration between different players in the ecosystem. “The need of the hour is to collaborate with each other. The venture capitalists, fund providers, development agencies, and government schemes are there, but it is the collaboration that will help,” Sood said. He added that there is also a need to create more and more incubation and acceleration centres.

 

There are requirements for collaboration between individuals working in the domain of corporate social responsibility and financiers to put together the amount that needs to be given to an entrepreneur, Bali added.