Finance minister Nirmala Sitharaman is likely to announce the launch of a Rs 1,000 crore fund by Nabventures, a subsidiary of Nabard, for the benefit of startups in agriculture and allied sectors, working on climate-smart agriculture. Officials said the focus of Nabventures fund – II would be to create regional pilots that aim to demonstrate solutions capable of mitigating adverse impact of climate change effects and would provide financial support for both mid- as well as early-stage startups working in the field of climate resilient agricultural activities.
Officials said the fund is expected to be launched in FY26. It aims to support innovation in the rural economy with a strong climate resilient theme. Details of the proposed fund would be worked out soon.
The Nabventure fund-I, a venture capital fund, launched in 2019, had a corpus of Rs 598 crore which was to be invested in agri-tech, food-tech, agri or rural fintech, and rural tech businesses at an early to mid-stage.
“The investee companies have delivered outcomes including Jai Kisan facilitating loans worth Rs 3,000 crore in the food and agri-business value chain across 11 states while entity like Krishitantra enabled rapid soil testing for over 1 lakh farmers, and the company is an approved partner for the digital soil health card scheme of the agriculture ministry,” according to Nabard note on the impact of the Nabventures-fund-I.
Recently Shaji KV,Chairman, Nabard had stated , “as a development financial institution, we need to create use cases that showcase the potential of such activities to counter climate-related issues. These solutions will be home-grown and will cater to India’s specific needs,”
In September, last year, the government had launched a Rs 750 crore joint Agri fund for start-ups and rural enterprises (AGRI-SURE) in collaboration with Nabard, the agriculture ministry and private entities.
Sources said operationalisation of the AGRI-SURE fund is currently being undertaken. The fund aimed to help scale up operations of about 85 start-ups in the next five years with a variable ticket size upto Rs 25 crore for each start-up.
Out of the total Rs 750 crore corpus of the fund under the “Agri-SURE” scheme, Rs 250 crore each will be contributed by the agriculture ministry and Nabard. The remaining Rs 250 crore will be mobilised from institutions including private investors.
Under AGRI-SURE, also managed by Nabventures, out of the total fund, Rs 300 crore will be directly invested in startups, while Rs 450 crore will function as a fund of funds, supporting venture investors operating in agriculture and allied sectors.
The fund is designed to operate for 10 years, extendable by two or more years and its a SEBI Registered category – Alternative Investment Fund. The fund will focus on supporting start-ups and agripreneurs, enhancing farm produce value chains, creating rural infrastructure, and supporting Farmers Producer Organizations (FPOs).
The AGRI-SURE fund aimed at reducing post-harvest losses, by investing in agricultural infrastructure like warehouses, cold storage, and processing units, bridging infrastructure gaps by developing critical infrastructure to support the agricultural supply chain and reducing dependence on intermediaries by empowering farmers by providing direct access to infrastructure and resources.
Finance minister Nirmala Sitharaman in her budget for 2022-23 had announced a fund with blended capital, raised under the co-investment model, will be facilitated through Nabard. “This is to finance startups for agriculture and rural enterprise, relevant for farm produce value chain,” she had said.
