Why investors are looking at Indian ag-tech startups

A view of the SmartFarm platform by Indian agriculture technology startup CropIn. Photo by: CropIn

SAN FRANCISCO — When agribusinesses buy crops from smallholder farmers, they tend to send agents to the field, who walk the periphery of plots, take pictures of crops, and identify issues such as pests, in an effort to predict what the harvest might look like.

The ground-to-cloud SmartFarm app digitizes this process. On Monday, the Bill & Melinda Gates Foundation announced that its Strategic Investment Fund is investing $4 million in CropIn, an agriculture technology startup based in Bengaluru, India, which is behind the app.

“As ground-truth information from these geographies continues to fill our data lake, it provides insights that create a paradigm shift in the agriculture ecosystem globally.”

— Krishna Kumar, founder and CEO, CropIn

Expected to reach $4.5 billion by 2020, digital-based agriculture services will be critical in feeding the estimated global population of 9.7 billion people by 2050, and this investment points to growing interest by the Gates Foundation and other investors in ag-tech in India.

The case for investment

CropIn came onto the Gates Foundation's radar after members of the Strategic Investment Fund visited India, where they met with venture capital firms and learned about opportunities to invest in emerging technologies. SIF has a mandate to invest in support of the foundation’s mission and program strategies.

“In parallel to that, our colleagues on the agriculture team were also deeply exploring the intersection between technology and agriculture, especially on the big data side, to identify what new innovations could help solve some data challenges they have,” said David Rossow, founding partner and head of international at SIF.

This investment is the latest by the foundation in the Indian ag-tech ecosystem. Earlier this year, the foundation joined other partners in a $14 million round of financing for Stellapps Technologies, an “internet of things” platform for dairy.

“Historically, the only agri investors in India were impact investors,” said Mark Kahn, founding partner at Omnivore Ventures, an impact venture fund investing in early-stage ag-tech companies in India, which also backs Stellapps.

He noted the significance of Chiratae Ventures, formerly IDG Ventures India, joining the Gates Foundation in the $8 million Series B financing of CropIn, because Chiratae is a pure venture capital firm — the type of investor that typically has not touched this space.

“It is a recognition that there is a tremendous scope for innovation, and that the quality of startups in the ag and food ecosystem is just as high as across the India ecosystem,” Kahn said.

Some of the trends Kahn sees in ag-tech in India include platforms and marketplaces, precision agriculture companies using remote sensing and drones, and data analytics startups. CropIn merges datasets of on-the-ground information and other insights, and stands out from its competitors because of its software as a service offerings, Kahn said.

Smart farming

CropIn is a “business to business to consumer” model, and about half of the farmers CropIn works with are smallholder farmers. The SmartFarm app feeds into a SmartRisk platform, which combines data from the farm with local weather information, satellite imagery, and other sources of information in order to detect crops and predict yields.

Smallholder farmers benefit from services they do not have to pay for, and customers have reported a 25-30 percent increase in yields from using the app.

The extent of India’s smallholder farming means that relatively small areas of land can generate vast numbers of data points. These are then be put into machine learning algorithms to generate conclusions.

“India’s rich mix of farming practices and small landholdings provide a massive data set to inform our models,” CropIn founder and CEO Krishna Kumar said in a press release about the investment. “As ground-truth information from these geographies continues to fill our data lake, it provides insights that create a paradigm shift in the agriculture ecosystem globally.”

Looking ahead

These insights from India are actionable globally thanks to cross-learning on crops that happens on the platform, Kumar told Devex in an email. He said the company currently draws on data from 265 crops and 3,500 varieties on its platform, helping 180 customers across 29 countries take a more data-driven approach to agriculture, and is now expanding its reach from 3 million acres to 10 million acres as a result of its Series B round.

SIF saw the investment as an opportunity to increase the yields and incomes of farmers in India. The Gates Foundation is also working with CropIn to develop an artificial intelligence and machine learning team that can analyze these datasets for customers they may not have pursued otherwise. While the goal is to generate products that solve problems for partners beyond agribusiness, the SIF team sees this as an experiment.

“Extrapolating the data is a big audacious challenge,” Rossow said. “Being able to get the right data, make sure it’s the quality we need, and package that in a way that will be useful for our goals is new territory.”

About the author

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    Catherine Cheney

    Catherine Cheney is a Senior Reporter for Devex. She covers the West Coast of the U.S., focusing on the role of technology and innovation in achieving the Sustainable Development Goals. And she frequently represents Devex as a speaker and moderator. Prior to joining Devex, Catherine earned her bachelor’s and master’s degrees from Yale University, worked as a web producer for POLITICO and reporter for World Politics Review, and helped to launch NationSwell. Catherine has reported from all over the world, and freelanced for outlets including the Atlantic and the Washington Post. She is also the West Coast ambassador for the Solutions Journalism Network, a nonprofit that trains and connects journalists to cover responses to problems.