NABVENTURES Marks ₹450 Crore First Close of ₹1,500 Crore Fund II to Back Agritech and Rural Innovation

MUMBAI, Oct 8 NABVENTURES, the venture capital arm of India's National Bank for Agriculture and Rural Development (NABARD), has announced the first close of its second fund at ₹450 crore, against a target corpus of ₹1,500 crore that includes a greenshoe option.

NABARD is the anchor investor. The fund will invest in start-ups working across agritech, food and agribusiness, rural fintech, climate-smart solutions, and agricultural supply chains and logistics — sectors that sit at the centre of India's rural economy but have struggled to attract private venture capital over the past three years.

The first close arrives at a pointed moment. Funding for Indian agritech start-ups has fallen sharply from its 2021–22 peak, and a well-capitalised, state-backed investor committing fresh money to the sector could help steady a segment that many generalist venture funds have quietly stepped back from.

Key facts at a glance

• Fund: NABVENTURES Fund II

• First close: ₹450 crore

• Target corpus: ₹1,500 crore, including a greenshoe option

• Anchor investor: NABARD

• Focus areas: agritech, food and agribusiness, rural fintech, climate-smart solutions, supply chain and logistics

• Existing vehicles: Fund I and AgriSURE

• Portfolio so far: 23 companies, including Unnati, Eggoz, Beyond Snack and Jai Kisan

• Sector backdrop: agritech funding of about $202 million across 36 deals in 2025, down about 25% from 2024

A fund built for rural India

NABARD chairman Dr Shaji Krishnan V said the new fund reflects the institution's commitment to innovation that advances sustainability, climate resilience, financial inclusion and rural livelihoods. That framing matters. Unlike a conventional venture fund, which is judged almost entirely on financial returns, NABVENTURES operates with a dual mandate: generating returns while also strengthening the rural economy that NABARD was created to serve.

NABVENTURES was incorporated on April 23, 2018, as a wholly owned subsidiary of NABARD. It already manages Fund I and AgriSURE, the Agri Fund for Start-ups and Rural Enterprises, which was set up to back early-stage ventures in agriculture and allied sectors. Across these vehicles it has built a portfolio of 23 companies, including farmer-services platform Unnati, egg brand Eggoz, healthy-snacking company Beyond Snack and rural lender Jai Kisan.

Fund II widens that remit. Its focus on rural fintech recognises that access to affordable credit, insurance and payments remains one of the largest barriers for small farmers and rural enterprises. The inclusion of climate-smart solutions reflects growing recognition that Indian agriculture is on the front line of climate change, exposed to erratic monsoons, heat stress and water scarcity.

The funding drought in agritech

The data underline why a dedicated fund is needed. Indian agritech start-ups raised about $202 million across 36 deals in 2025, according to Inc42 data, down roughly 25% from $269 million in 2024. That is a fraction of the $728 million raised in 2021 and $840 million in 2022, when investor enthusiasm for digitising the farm-to-fork value chain was at its height.

Several factors drove the retreat. Business models that relied on heavy discounting or on aggregating fragmented farm produce proved harder to scale profitably than many investors expected. Thin margins, long working-capital cycles and operational complexity in rural logistics weighed on returns. As the wider venture market tightened, many funds shifted towards sectors with clearer paths to profitability.

Signs of life

There are, however, signs that capital is returning selectively. Farm machinery company Balwaan Krishi raised a $10.4 million Series B in September, and B2B fresh-produce platform Ninjacart secured $6 million in July. Aquapulse, a NABVENTURES portfolio company, is reported to be raising a ₹25 crore Series A.

The broader funding environment has also stabilised. Indian start-ups raised about $2.2 billion in the third quarter of 2026, up 5% from the previous quarter, though deal count fell 13% and the number of active investors declined by about 24%. That combination — more money concentrated in fewer deals — suggests investors are writing larger cheques to companies they believe in, while remaining cautious about new bets. A specialist fund with a long-term horizon and deep sector knowledge is well placed to back companies that generalist investors overlook.

Why it matters beyond agriculture

Agriculture employs a large share of India's workforce and remains the backbone of rural household incomes. Improvements in productivity, access to markets and resilience to climate shocks have direct consequences for food security, inflation and rural consumption — which in turn feeds into demand for everything from two-wheelers to consumer goods.

Technology can play a decisive role. Precision-farming tools, digital advisory services, soil-health testing, cold-chain logistics and embedded finance can raise farm incomes and reduce waste. But many of these solutions need patient capital to move from pilots to scale, and they often depend on partnerships with cooperatives, farmer producer organisations and rural banks — networks in which NABARD is already deeply embedded.

That institutional reach is one of NABVENTURES' main advantages. Portfolio companies can potentially tap NABARD's relationships with state governments, regional rural banks and farmer organisations to accelerate distribution, something few private investors can offer.

What founders should expect

For founders, a specialist fund brings more than money. Investors who understand crop cycles, mandi dynamics, cooperative structures and rural credit can judge business models that generalist funds often find hard to read, and can be more patient with companies whose revenue rises and falls with the seasons.

The road to final close

Reaching the full ₹1,500 crore target will depend on bringing in additional limited partners, which could include other financial institutions, development finance bodies, insurers and private investors drawn to the fund's blend of returns and measurable impact. The greenshoe option gives the managers room to scale up if demand from investors proves strong.

For founders working on the hard problems of rural India, the first close is welcome news after a lean few years. For impact investors and members of the global Indian diaspora interested in climate resilience and inclusive growth, NABVENTURES Fund II offers a window into how public institutions are trying to crowd private capital back into a sector that is critical to India's future.

The test now is deployment: how quickly the fund can identify, back and scale the next generation of agritech companies, and whether its early bets can demonstrate that farming innovation in India can be both impactful and investable.