How much funding was invested in ag-tech last year?

In 2018, $16.9bn (€15.3bn) was invested in agri-food technology start-ups and companies by global investors. That’s a 20% increase on the previous year. There’s been a lot of money coming into ag-tech and food-tech in recent years and the movement is really coming to the fore.

What are investors’ views on ag-tech?

They’re pretty bullish on the sector. Some mainstream investors are saying they think ag-tech could be bigger than artificial intelligence (AI) or machine learning. Idea 2 Scale and AgFunder recently surveyed 50 ag-tech investors from around the world to understand the why behind their investment decisions in ag-tech.

Investors understand that there’s a huge global demand for protein and a growing population entering the consumer class. However, there’s a lot of social pressures on farmers to produce the same amount with less of an impact on the environment. This creates opportunities for new technologies to help farmers become more productive.

What technologies are investors excited about in ag-tech?

More than half (58%) of investors said they were most excited about ag-biotechnology. This encompasses new technologies for crops and animals such as genetic editing, microbiome, breeding and animal health.

Investors are also excited about new innovations in food such as plant-based foods, while 45% said they were excited about new developments in farm management software, sensors and internet of things (IoT) applications.

Where do investors see as the ag-tech hotspots?

The US still attracts the lion’s share of funding in ag-tech. Europe lags a bit behind, but it’s the second largest. When we asked investors what countries stood out for new investment opportunities, most said India. It’s a country with a huge population coming into the consumer class who now have disposable income.

What has the Beyond Meat IPO done for ag-tech?

The initial public offering (IPO) of plant-based foods company Beyond Meat in 2018 was huge and brought ag-tech into the focus of mainstream investors. Investors were hungry for growth and here was a company that was growing and was very close to profitability before going public. So investors piled in and the share price ballooned. It created a bit of a Beyond bubble. But the whole story has brought plant-based food into the mainstream and validated the plant-based sector.

What is your outlook for ag-tech investments in 2020?

I think it’s going to be a good year for ag-tech. I think we’re going to see a lot more funding in plant-based foods and alternatives. You’ll also see an acceleration in investment into biotechnology.

Food-tech has attracted most of the funding up to now, but I think we’re going to see that switch over in the coming years, with ag-tech attracting more investment in the future.

Idea 2 Scale is now accepting applications from early stage start-ups in Food and Ag-tech for their zero equity, zero fee accelerator programme.