Agtech: the darling of the investment world

This week is GAI Agtech week in San Francisco, one of the many annual events of its kind on the US wast coast. Agtech startups investment is increasing rapidly but not only in the US. In most recent years, agtech has become more of a global trend with innovative start-ups being established in countries all over the world.

The US, with its rich farming heritage, was the first country to recognise the need to introduce technology into the farming process. Over the past few years many of the agtech start-ups have originated there, but 2015 saw an interesting shift; just 58 percent of investments were in US-based companies, compared to 90 percent in 2014. It looks the Agtech sector will grow more and more, and hopefully Europe will be able to play a more important role.

When you consider the challenge of feeding the world’s growing population – 9.5 billion people by 2050 – it’s no wonder there’s a landslide of investment in the sector. The urgent need to increase food production by 70% has meant the sector is now attracting levels of investment we’ve only typically seen in big technology and social media firms, and it’s only the beginning. Agtech has become the ‘IT’ word among global investment firms. In 2015 investments in agtech start-ups globally was $4.6 billion, almost double the $2.36 billion in 2014 (according to AgFunder). Over the past five years, global investment in the agtech sector has markedly accelerated from barely USD500 million in 2012 to approaching USD5 billion as entrepreneurs and investors look to tackle production and sustainability issues facing the farming sector.

Whilst the challenge has given rise to new technologies along the entire supply chain, the most notable start-ups are focused on the farmer. With housing and industry impinging on farming land, they are under pressure to produce more crops on less land.

Agtech developments are hitting headlines around the world. Europe has less agricultural land availability comparing with the US, India and China but high concentration of food firms, large retails distribution and high population concentration which can create potential for innovations. With our long farming tradition in this country, and more recently, our pedigree in the technology world, we are poised to make our mark on this booming sector. Already we have companies like GrassoMeter, which provides accurate grass measurements, Moocall, a smart sensor that attaches to a cow’s tail to alert a farmer when a cow is about to go into labour, and Keenan Systems with its precision feeding technology system. The opening of the new agtech high-spec facility, Farm491, by the Royal Agricultural University later this year will provide support and acceleration services in the UK. The initiative will offer new agtech start-ups offer high-spec facilities to foster ideas generation and collaboration, 491 hectares of Cotswold farmland for research and testing, and access to RAU’s extensive knowledge network that includes farmers, entrepreneurs, investors and academics – as well as farming data, research, equipment and resources.

One of the fastest growing segments within the agtech revolution is drones and robotics; in 2015, investment in these start-ups grew by 237%. AgFunder suggests this segment will continue to grow as farmers increasingly turn to crop-spraying and ‘sheep dog’ drones and self-driving farm machines for data analysis and precision farming. Sensors, GPS, satellite imagery, drones and diagnostic systems combine to deliver actionable data to farmers who use it to more effectively manage their fields and crops.

Data is fast becoming the life-blood of the agri-food sector. For farmers and producers, how they collect, process, manage and analyse that data is a critical factor in their success. As the agtech revolution continues unabated, that data could well become their most important asset.