Home Food Funding in food-tech startups in India: Trends

Funding in food-tech startups in India: Trends

By  
SHARE

According to a report of in 2019, agriculture and food comprise of 10% in global GDP. In recent years, as the focus of consumers shifts towards sustainability, health and hygiene, India’s food sector is going through robust technological innovations, and it is foodtech startups that are leading the change. With the humungous load of information being continuously uploaded, online is the new screen from where awareness is generated today. Within the food world, in particular, issues like organic farming, food wastage and global warming have gained maximum limelight amongst the online community.

Funding in Food-tech StartUps in India:
Funding in Food-tech StartUps in India:

But it’s not the problem tellers but the problem solvers who will lead the road forward in these ever-competitive times. And, considering the present scenario, food companies addressing the ambient problems with innovative solutions will have the advantage of gaining growth by tapping on the ethical points in the society. In the future ignoring these issues will not be easy as they will soon convert into mainstream demands or regulations of the industry.

Today despite the fact that various Consumer Packaged Goods (CPG) brands are rushing to deliver to the heightened demands, promising services and quality food, yet still, the falling margins in commodities, ingredients, and the parallel industry consolidation has led to a decrease in the progressive efforts, and this has left the door open for a new wave of hungry innovators and startups. From the beginning to the final delivery of food, all along the value chain, new solutions are, and will continue being representative of how technological approaches will be addressing key points in the food industry. We will see significant growth and investment in the coming years.

According to a 2019 report, there were around 1047 Indian startups operating in the FoodTech sector. With strong Indian startup stories, homegrown innovators are making it big riding high on the innovative need-based ideas.

In 2018, India’s foodtech sector had witnessed humongous growth and saw a few ground-breaking investment deals. Swiggy has raised $210 million led by South Africa’s Naspers Ltd and DST Global, and its arch-rival was also not far behind when it fetched $150 million from Ant Financial. As per the forecasts of RedSeer Consulting, the country’s food-tech sector is growing phenomenally, and it could reach up to USD 3.5 billion by 2021. The predictions made by RedSeer are ringing true as in the first half of 2019, homegrown Indian startups raised $4.88 billion, an increase of 8.7 per cent from the same period last year.

In fact in the current fiscal year, we at received 70% more startup requests from food-tech than the previous year. We received 50+ requests from food-tech startups in 2018 and this year we have 88+ requests from the same sector. This shows a tremendous increase of startups in this sector and huge potential for investors.

Food is a basic need of every individual, but today people’s demands and preferences for food are changing much faster than ever before, and that is why foodtech startups with unique and innovative features are successfully enticing angel investors and venture capitalists, not only from the homeland but from the overseas, too. At the same time, startups taking green initiatives in this direction are also inviting the attentions of stakeholders and accelerators.

With the main aim to assuage consumer-driven demands, the investor primarily focuses on the development of technologies in the market. While some companies focus on the food itself, many others explore the process, packaging and distribution on a new wave of sustainable, healthy and innovative food. These include the way of reducing food waste while improving the product for proper transportation which will benefit in the food supply chain. Some examples:

  • It was reported that over eight tones of plastic get dumped into the oceans or landfills, and plastic straws contribute to over 30 per cent of the waste every minute, resulting in the biggest threat to marine creatures. Bengaluru-based startups ‘’ manufactures bamboo straws, cutlery, and packaging materials with the help of tribal in northeast India generating revenue of Rs 10 lakh in a year. Influenced by its unique and healthy, an HNI based in London came forward and invested an undisclosed amount in the .
  • , another inspirational story in India’s foodtech landscape was also in the headlines when industrialist and investment bank, Enabler, decided to invest in this promising startup. The startup provides digital video menu for restaurants and allows its customers to gift food and beverage experience across the world. IdeaChakki was perhaps the world’s first video-based startup which introduced this unique concept to the food world.
  • is a Mumbai-based startup brings out the solution of maintaining a healthy diet.
  • (ANE), also from Mumbai, is a 100 percent clean-label food brand aiming to rebuild the world’s trust in food.

The list of Indian foodtech players with good traction for funding is very long and increasing every new day, and they are indeed incredibly impressive in raising funds from Indian and overseas investors. When we, at Risers Accelerator, go through the applications, the first thing that we pay attention to is the technology and the model that they propose. India has developed into a market where only offers will not help you gain the loyalty of the customers; the plan should be comprehensive enough for a long term engagement. Thus, the retention policy is of utmost importance.