191
late 1990s and early 2000s, a boom in venture funding emerged, foreign investment
in the startups during the dotcom boom and Internet bubble. By 2017, venture funds
financed close to $150 billion in investments in new technology startups, nearly
reaching market highs not seen since the Internet bubble in 2000.
14
Compared to technology-led industries, the agriculture industry is still underserved by the technology community and venture capital investors. The agricultural
community relies mostly on chemical and mechanical technologies for the majority
of their innovations in plant yield, productivity, and cost efficiency. Digital technologies did not easily adapt to the rough and dirty environment of farm-level applications. The digital age initially reached agriculture using GPS systems on tractors
to aid in seed and fertilizer applications. Precision farming, which allows more precise application of agricultural protection chemicals and nutrients, is now delivering
significant value. Technologies such as automation, decision support systems, and
agricultural robots are rapidly being adopted on many of the large-scale farms. The
connection of smart sensors through the Internet of Things (IoT) gives farmers valuable information, including soil moisture, nutrient levels, the temperature of produce in storage, and the status of farming equipment. Self-driving equipment
connects with satellite imagery to apply fertilizer automatically and relay nutrient
information to a farmer’s mobile computer. Agtech is still small in comparison to
other technology investments, but it is disrupting the agri-food industry by applying
new innovative and sometimes counterintuitive technologies on the farm and
throughout the food processing industry.
In comparison to the burgeoning $84 billion technology-led investments in 2017,
the Agtech and FoodTech investment market is still relatively small. According to
AgFunder 2017 Investment Report, the food and agriculture venture investments –
comprised of over 990 deals and 1,487 unique investors – totaled $10.1 billion.
15
With a 29% increase in investment growth, Agtech deals are getting larger and
attracting more prominent investors.
Currently, Agtech investments occur in three broad areas:
1. Digital Innovation capitalizes on the latest advancements in hardware and software to create a new system of farming relying on computing power and connectivity. Soil sensors measure ground moisture. Drones collect data and
imagery, providing specific and precise crop analytics. Cloud-based advanced
analytical solutions process this data to provide growers with direct recommendations. As Randall Barker, Managing Director of FarmLink, states, “There’s an
obvious convergence about all these technologies that can be connected and
solved for in a data science approach. It’s all about taking the complexity of biology, weather, and math and making it work.”
16
14 https://pitchbook.com/news/articles/a-record-setting-year-2017-vc-activity-in-3-charts
15 https://research.agfunder.com/2017/AgFunder-Agrifood-Tech-Investing-Report-2017.pdf
16 http://www.middle-east.atkearney.com/documents/10192/7853238/Innovation+in+Agriculturethe+Path+Forward.pdf/4e2d0e75-eea6-42e4-bc6d-6a75450ad8bf
7 Innovation and the Quest to Feed the World
late 1990s and early 2000s, a boom in venture funding emerged, foreign investment
in the startups during the dotcom boom and Internet bubble. By 2017, venture funds
financed close to $150 billion in investments in new technology startups, nearly
reaching market highs not seen since the Internet bubble in 2000.
14
Compared to technology-led industries, the agriculture industry is still underserved by the technology community and venture capital investors. The agricultural
community relies mostly on chemical and mechanical technologies for the majority
of their innovations in plant yield, productivity, and cost efficiency. Digital technologies did not easily adapt to the rough and dirty environment of farm-level applications. The digital age initially reached agriculture using GPS systems on tractors
to aid in seed and fertilizer applications. Precision farming, which allows more precise application of agricultural protection chemicals and nutrients, is now delivering
significant value. Technologies such as automation, decision support systems, and
agricultural robots are rapidly being adopted on many of the large-scale farms. The
connection of smart sensors through the Internet of Things (IoT) gives farmers valuable information, including soil moisture, nutrient levels, the temperature of produce in storage, and the status of farming equipment. Self-driving equipment
connects with satellite imagery to apply fertilizer automatically and relay nutrient
information to a farmer’s mobile computer. Agtech is still small in comparison to
other technology investments, but it is disrupting the agri-food industry by applying
new innovative and sometimes counterintuitive technologies on the farm and
throughout the food processing industry.
In comparison to the burgeoning $84 billion technology-led investments in 2017,
the Agtech and FoodTech investment market is still relatively small. According to
AgFunder 2017 Investment Report, the food and agriculture venture investments –
comprised of over 990 deals and 1,487 unique investors – totaled $10.1 billion.
15
With a 29% increase in investment growth, Agtech deals are getting larger and
attracting more prominent investors.
Currently, Agtech investments occur in three broad areas:
1. Digital Innovation capitalizes on the latest advancements in hardware and software to create a new system of farming relying on computing power and connectivity. Soil sensors measure ground moisture. Drones collect data and
imagery, providing specific and precise crop analytics. Cloud-based advanced
analytical solutions process this data to provide growers with direct recommendations. As Randall Barker, Managing Director of FarmLink, states, “There’s an
obvious convergence about all these technologies that can be connected and
solved for in a data science approach. It’s all about taking the complexity of biology, weather, and math and making it work.”
16
14 https://pitchbook.com/news/articles/a-record-setting-year-2017-vc-activity-in-3-charts
15 https://research.agfunder.com/2017/AgFunder-Agrifood-Tech-Investing-Report-2017.pdf
16 http://www.middle-east.atkearney.com/documents/10192/7853238/Innovation+in+Agriculturethe+Path+Forward.pdf/4e2d0e75-eea6-42e4-bc6d-6a75450ad8bf
7 Innovation and the Quest to Feed the World