India Set to Lead $90 Billion AgriTech Revolution in Southeast Asia
Synopsis
Key Takeaways
New Delhi, April 2 (NationPress) The adoption of Digitalisation and AgriTech could potentially generate over $90 billion in annual GDP growth across Southeast Asia by 2033, with India poised to take the lead in these gains, according to a report released on Thursday.
The collaborative report by Omnivore, Beanstalk AgTech, and Briter outlines that India's advancements in venture capital and governance present a compelling framework for tapping into the vast, underutilized agricultural technology opportunities present in Southeast Asia.
Four promising verticals have been identified in the report, including digital value chains, inclusive AgriFinTech, agrifood life sciences, and sustainable consumer brands.
Investment in AgriTech in the region reached a peak of over $750 million in 2022, but is anticipated to decline by nearly 70% by 2025 as investors reevaluate the challenges posed by fragmented value chains and scaling issues.
Agriculture accounts for about 15% of GDP and employs nearly 40% of the workforce in the region.
Development finance institutions and impact investors have allocated around $650 million to agrifood funds throughout the region, playing a critical role in the capital structure. The authors suggest that the next stage of growth will necessitate a combination of equity, credit, and concessional capital.
The report emphasizes that the most secure opportunities are those centered on single-market strategies that are well-aligned with the appropriate value chain, business model, and local execution team.
It also points out that a cohesive Southeast Asian market does not exist and that two-thirds of documented attempts at cross-border expansion have not succeeded, indicating significant potential for growth.
Mark Kahn, Managing Partner at Omnivore, stated, "The fragmentation is evident, yet so is the chance to enhance agricultural productivity and improve the lives of farmers across the region. Patient, informed capital that comprehends local market dynamics is essential to advance these ecosystems."
In terms of exits, the study revealed that corporate acquisitions constitute approximately 75% of liquidity events across the ecosystem since 2020, with only eight IPOs occurring during the same timeframe.