Agritech Startups Stuck in the Mud: Funding Dries Up as Sector Struggles for Breakthrough

In a country where agriculture sustains over half of the population and contributes approximately 18% to the GDP, one would expect that technology-driven innovation in this sector would be thriving. Yet, the Indian agritech sector has managed to attract just 2% of total venture capital funding since 2020, according to recent data compiled by TheKredible. Despite lofty ambitions and early momentum, the sector seems to have hit a roadblock, and the promise of a digital green revolution has faded, at least for now.

From Peak to Plunge: A Sector's Rise and Fall

Between 2020 and 2022, agritech startups in India were on a roll. Investor interest surged, deals were inked, and unicorn dreams appeared within reach. Funding quadrupled from $155 million in 2020 to $630 million in 2021, followed by another 25% surge to $802 million in 2022. This was the golden phase when startups like Ninjacart, DeHaat, and WayCool were inching toward the coveted billion-dollar valuation club.

But that narrative reversed sharply.

Funding in 2023 collapsed by 78%, plunging to just $178 million. Though 2024 saw a mild 30% recovery, it was short-lived. The first half of 2025 witnessed another sharp decline—58% year-on-year—bringing total funding down to a paltry $96 million. Compared to sectors like fintech, SaaS, and edtech, agritech's funding story has been starkly underwhelming.

Numbers Tell the Story

Between January 2020 and mid-2025, over 160 agritech startups raised more than $2 billion across 246 funding deals. Growth-stage ventures accounted for $1.59 billion, while early-stage startups pulled in $500 million. Sounds impressive until you realise that this represents only 2% of the total $107 billion invested in Indian startups during that period.

Delhi-NCR emerged as the funding capital for agritech, raising $851 million over 71 deals. Bengaluru followed with $550 million across 76 deals. Other cities like Chennai, Pune, and Mumbai also made their mark, though at a much smaller scale.

Yet, none of the agritech startups managed to become unicorns, even as India now boasts over 120 unicorns in other domains. The three top-funded players—Ninjacart($370 million), WayCool ($307 million), and DeHaat ($270 million)—have not raised major funding rounds since 2022. Their valuations have hovered just below the billion-dollar mark.

Layoffs, Shutdowns, and Missed Opportunities

What happened?

The challenges facing agritech are not just financial—they are deeply structural. Several well-funded startups, such as Fraazo, Otipy, and Deep Rooted, folded operations despite their early success in raising capital. Their shared problem? The inability to scale and maintain profitability in the complex, low-margin world of “farm-to-fork” models.

Meanwhile, ReshaMandi, a startup once hailed for streamlining the silk supply chain, shut down amid allegations of financial misreporting, revenue inflation, and governance lapses.

Moreover, the farm-to-fork narrative, so popular among urban investors, slowly pivoted to a less glamorous “mandi-to-fork” model. While this helped startups survive short term, it limited innovation and differentiation in the long run. The intense competition from traditional distribution networks only made the challenge tougher.

Policy Overhang and VC Hesitation

Despite the government launching more than 210 funds to support startups since 2024, only 23 of these are agritech-specific. Names like Omnivore, Northern Arc, and Stride Ventures do stand out, but the pool remains too shallow for a sector as massive and foundational as agriculture.

The government has introduced several schemes aimed at fostering agritech innovation. Programs such as Agri Udaan and the Innovation and Agri-Entrepreneurship Development Programme (under RKVY RAFTAAR) offer funding, mentoring, and incubation. Yet, startups often find themselves stuck in a bureaucratic maze or dependent on sporadic grants that are insufficient to scale operations.

The policy landscape also adds unpredictability. Much like the microfinance sector, agritech too is vulnerable to shifting political narratives, subsidy changes, and regulatory clampdowns—all of which make venture capitalists wary of entering the space with full conviction.

The Road Ahead: Hope on the Horizon?

While the overall funding climate remains harsh, the potential of agritech remains undeniable.

The future may lie not in last-mile delivery or digital marketplaces, but in upstream innovation. Sectors like seeds and crop inputs, precision farming, water use optimisation, and sustainable agri-fintech solutions offer significant promise. However, these require long gestation periods—something most venture funds shy away from.

Perhaps the most promising path forward is a blended finance model—one that combines government support, private capital, and impact-driven investment. Agritech also needs entrepreneurs who can straddle both technology and grassroots agricultural realities—something that remains rare today.

For now, the sector is in survival mode. But if Indian agriculture is to undergo a true transformation, agritech must rise again—smarter, leaner, and more attuned to the soil it wishes to serve.

As one investor put it, “The day agritech cracks the code to make farmers rich, every rupee invested in the space will seem like a bargain.”

And for India, that day can’t come soon enough.