Funding patterns and financial viability of agricultural startups under the RKVY-RAFTAAR scheme in the states of Andhra Pradesh and Telangana, India

The emergence of agri-startups in India has reshaped agricultural entrepreneurship by addressing inefficiencies in supply chains, input distribution and technology adoption. However, their financial viability remained uncertain, particularly at early stages. To strengthen this ecosystem, the Rashtriya Krishi Vikas Yojana – Remunerative Approaches for Agriculture and Allied Sector Rejuvenation (RKVY-RAFTAAR) scheme launched in the year 2017 provided structured funding, incubation and mentoring support through Business Incubation Centres. This study empirically analysed funding patterns, resource allocation and financial viability of 80 agri-startups incubated in Andhra Pradesh and Telangana across 8 sectors: Agri-Tech, Food Processing, Organic Farming, Agri-Input Supply, Agri-Marketing, Agri-FinTech, Agri-Biotechnology and Agri-Drones & Automation. A cross-sectional design was adopted using sector-wise data on funding composition, resource allocation and financial indicators, viz., Return on Investment (ROI), Operating Profit Margin (OPM) and Debt-to-Equity Ratio (D/E). A composite financial viability score (FVS) was constructed, complemented by data envelopment analysis (DEA) with slack analysis to assess efficiency and performance gaps. The findings revealed that private investment dominates funding in technology-driven sectors such as Agri-Tech and Agri-FinTech, while Organic Farming and Agri-Input Supply rely heavily on public grants. Sectoral differences were evident in resource allocation: Agri-Tech and Agri-FinTech prioritised innovation and R & D, whereas Food Processing and Organic Farming emphasised infrastructure. Financial viability was excellent in  Agri-FinTech and Agri-Tech (FVS >19), while Organic Farming and Agri-Input Supply exhibited weak to moderate viability due to low ROI and higher debt exposure. DEA results confirmed higher efficiency in innovation-led sectors and inefficiencies in sustainability-oriented ones, with slack values indicating untapped potential across traditional sectors. The study highlights the need for differentiated policy interventions, where private funding helps grow scalable models, while targeted public support should conserve ecologically critical and financially vulnerable sectors, eventually promoting inclusive and resilient agri-entrepreneurship.