The central government is keen to be your business partner if you launch a firm focused on digital solutions for agriculture, climate change, rural development, education, or even health care delivery, as India attempts to extend its already robust startup environment.
For example, the ministries of agriculture and electronics are ready to accept business proposals from people, investors, and businesses in which the government will have a limited equity stake.
One of the reasons the Union government decided to become an investor, according to an official who sought anonymity, is to provide “nascent-stage capital for fresh entrants given India’s booming startup environment and the potential they have to impact multiple sectors.”
The government had a “good idea and tonnes of data” on startups’ potential and the value they can offer to the economy’s production from handling prior projects like Startup India, which had an investment of over 900 crore, according to the source.
India has surpassed the United Kingdom to become the third most populous country in terms of unicorns, following the United States and China, who added 487 and 301 unicorns, respectively, in 2021. As of January 14, India had 83 unicorns, valued a total of $277.77 billion, according to the latest Economic Survey. A unicorn is a corporation with a market capitalization of $1 billion or more.
According to a second official, the agriculture sector is being viewed as a “sunrise sector,” with digital technology already showing signs of future growth. Additional agricultural secretary Abhilaksh Likhi made a worldwide pitch on February 18 at the Dubai Expo 2020.
“He asked startups and FPOs (farmer producer organisations) to submit ideas to the agricultural ministry,” a second official, who did not want to be identified, added.
Proposals for equity grants, management expenses, and other support measures for agri-tech-led enterprises are being considered by the agricultural ministry.
Since the 1970s Green Revolution, India’s huge agriculture industry, which is dominated by tiny and impoverished cultivators, has experienced no substantial technical breakthrough.
Startups focused on accurate inputs to data-based, tailored crop monitoring packages, and market information are expected to be the next technological leap in the agriculture industry.
According to a spokeswoman for Aqgromalin, an agri-startup, “the rising use of deep-tech solutions across the country is propelling India’s agricultural revolution, or agriculture 4.0.”
For instance, Aqgromalin is a technology-driven agricultural diversification platform that employs a “stack tech” approach to enable farmers to enter the animal husbandry and aquaculture industries.
DeHaat, the country’s fastest-growing agri-tech start-up, provides end-to-end AI-based solutions. Ninjacart is India’s largest delivery service for fresh vegetables.
The government will establish a new fund for the new initiative, although its participation may be limited to a 20 percent equity stake. The fund will be managed by private equity fund managers.
The project will include the ministries of agriculture, electronics and information technology, and health, in addition to agriculture.
According to Ashish Patel, a partner at Tech-X, a startup funder, “holding 20% restricted shares in any business suggests the enterprises will obtain more capital to expand.”