Challenges hindering stakeholders in Telangana’s agri-startup ecosystem: A constraint analysis

Introduction

A startup is defined as a newly established enterprise, typically in its nascent operational stages, engineered to develop unique, innovative products or services aimed at market disruption and rapid scalability (Startup Indian, 2021) [23] . In the context of India, agriculture serves as the socioeconomic bedrock of the nation. It not only contributes approximately 18% to the national Gross Domestic Product (GDP) but also functions as a primary employment generator, accounting for 12.91% of the workforce within the organized manufacturing sector (MoFPI, 2025) [12] . Driven by an ongoing Agri-Tech revolution, the sector is undergoing a profound structural paradigm shift, transforming from traditional subsistence farming into a high-value, market-led business ecosystem. This technological evolution is underscored by the recognition of over 6,000 agricultural startups and 2,800 specialized Agri-Tech ventures by the Department for Promotion of Industry and Internal Trade (DPIIT) (Startup India, 2023) [24] . Globally, India accounts for roughly 7.5% of total agricultural production, positioning it as a critical pillar for global food and nutritional security (FAO, 2023) [6] . Within this matrix, agricultural startups play a pivotal role in mitigating hunger and strengthening food security networks. Through integration with the food processing industry, these ventures optimize value addition, process agricultural surpluses, extend shelf life, and stabilize supply chains to ensure food availability across diverse regions at affordable prices. Beyond processing, agri-based startups have generated substantial economic opportunities, yielding approximately 33,400 direct and 70,700 indirect jobs (Anand et al., 2025) [1] , while overall recognized startup frameworks have contributed to the creation of over 12 lakh jobs nationally (Ministry of Finance, 2024) [11] . Furthermore, these enterprises enhance the market bargaining power of smallholder farmers and stimulate downstream economic activity across the secondary and tertiary sectors. At the sub-national level, Telangana has emerged as a pioneer www.extensionjournal.com in fostering entrepreneurial growth. The state launched its comprehensive 'Innovation Policy' in 2016, designed to leverage its favorable demographic dividend and pool of skilled technology and research professionals (Startup Telangana, 2016). The policy establishes a conducive environment for institutional innovation, risk-taking, and statewide entrepreneurship. Utilizing a highly unique structural model, Telangana has cultivated a robust startup ecosystem to transition toward an innovation-driven economy. Consequently, it is recognized as one of India's top-performing startup states, housing 526 dedicated agristartups (Startup India, 2021) [23] . Several studies identified the constraints experienced by the stakeholders of the agristartups, such as inadequate training (Sindhu, 2015; Bhaskar, 2018) [20,3] , lack of efficient managers (Kumar, 2016) [8] , nonavailability of input materials (Raju, 2017) [17] , shortage of labor (Shivacharan et al., 2017) [19] , lack of training about scientific production technology (Pal, 2018) [14] , less support by Government (Manohar, 2019; Kumar, 2022) [, 9] , lack of funds (Swathi, 2019; Bhooshan and Kumar, 2020; Divya, 2023; Devi, 2023) [, 4, 5, ] , non-availability of information regarding technical guidelines (Pal, 2018; Jatav et al., 2023; Priyanka and Gurupandi, 2026) [14,7,16] , inadequate incentives provided by Government (Aneesha, 2021; Reddy, 2023) [2,18] , inefficient supply chain (Srishailam et al., 2022; Venu et al., 2025) [22,25] ; limited access to technology (Nair and Raj, 2024) [13] ; inappropriate marketing (Singh et al., 2025) [21] .

Statement of the Problem

Agri-startups offer pertinent, original, and scalable solutions to deeply entrenched challenges across the entire agricultural value chain. By bridging critical operational gaps among smallholder farmers, input dealers, wholesalers, retailers, and end consumers, these ventures establish reliable market linkages and deliver high-quality inputs in a timely manner. However, despite their transformative potential, these entrepreneurs navigate a highly volatile and capital-intensive ecosystem (MANAGE, 2021) [10] . To devise targeted strategies that can fortify this landscape, it is imperative to empirically investigate and comprehend the multifaceted constraints experienced by the diverse stakeholders within the agri-startup ecosystem.

Methodology

The present study was conducted in Telangana state of India. It was purposively selected for the present study due to its success in agri startup, which is mainly due to their unique 'Triple Helix' model involving Government, Academic and Industry. While, to examine the constraints experienced by the stakeholders of agri-startup ecosystem, 50 agri-startup entrepreneurs, 12 incubators and accelerators, 10 mentors and experts and 8 funding agency representatives were selected for the present study. Various constraints experienced by the stakeholders were identified and studied as financial, technological, marketing, establishment related and personal constraints. The stakeholders were requested to assign rank to the constraints based on their experience and analysis was carried out as per Henry Garret Ranking technique. In Garret ranking technique, the rank given by the entrepreneurs were converted into percent position by using the formula Where Rij= Ranking given to the ith attribute by the jth individual Nj = Number of attributes ranked by the jth individual Then for the calculated value using the Garrett ranking conversion table, the Garrett score was found. The Garrett score was multiplied with the ranks given by the entrepreneurs for each factor. The average of each factor was taken and ranking was done. By employing the above methodology, the major findings were given as follows.

Results and Discussion

Constraints faced by incubators and accelerators

As incubators and accelerators act as the central engine for the entire agricultural startup ecosystem, constraints faced by them creates a negative effect on the ecosystem. In this regard, constraints experienced by them were identified and ranks were assigned by incubators and accelerators. The major findings were presented in Table1.

Constraints faced by the mentors and experts

As survival of agri-startup depends on specialized mentorship, multi-tier supply chains, understanding the bottlenecks helps to transfer institutional knowledge and market realities. In this regard, constraints experienced by mentor and experts was studied and presented in Table .2. Most agri-tech founders come from core agronomic, engineering, or technical backgrounds rather than corporate environments. While their technical solutions are innovative, their inability to translate ideas into rigorous business models, financial sheets, and pitch decks paralyzes the mentorship process from the outset. Technical founders frequently exhibit cognitive inertia, prioritizing product mechanics over essential market pivot suggestions. This friction is compounded by a complete lack of real-time data tracking systems for startup progress, making it impossible for experts to deliver data-driven, strategic advice. Mentors feel perfectly capable of opening doors and introducing startups to large distribution chains; however, their efforts are stalled because the startups are internally unequipped, uncoachable, or lacks the professional documentation required to walk through those doors.

Constraints experienced by investors/ funding agency representatives

Examining the constraints experienced by the investors helps to understand the reason of startup failure or the exit of startup in agricultural ecosystem. In this regard, the rank assigned by investors and funding agency representatives were studied and presented in Table .3

Conclusion

As agricultural enterprises are intrinsically bound to seasonal production cycles and unpredictable weather conditions, coupled with a growing consumer awareness toward environmental sustainability, there is an imperative need to accelerate the development of food processing industries and agri-tech startups. Ultimately, the empirical findings demonstrate that agri-startups do not fail in isolation; rather, they are restricted by an uncoordinated ecosystem where technical innovation is severely decoupled from financial governance, regulatory ease, and strategic market execution.

To transition the agricultural landscape from traditional subsistence farming into a resilient, innovation-driven economy, the state of Telangana can implement targeted interventions-such as introducing blended finance alongside patient capital instruments, building localized public-private testing and validation laboratories, establishing a singlewindow regulatory clearance platform, and facilitating product quality governance paired with digital market linkages-to fundamentally strengthen agri-tech startups within their broader operational ecosystem.

Acknowledgement

AcknowledgementThe authors of this research study are thankful and acknowledging the help, support and co-operation from faculty from PJTAU, Ag-Hub, T-Hub, a-IDEA NAARM, CIA MANAGE.

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