Global investments in AgriFood tech continue to rise. The first half of 2017 saw $4.4 billion VC investment into the space, covering all segments from farm to fork. Highlights include a foodtech unicorn, corporate confidence and key AgriFood tech trends emerging… read on!
We’ll take a quick look at pertinent data contained in the H1’2017 investment report by AgFunder* and identify some of the hottest areas to watch in 2018.
BIG DEALS are pushing investments up. Despite a 6 percent increase in overall investment year on year, the actual number of deals decreased by 27 percent. Much of the deal decline happened at seed stage where there was a 37 percent decrease in the number of VC investment deals. This can be attributed in part because startups are maturing in size, partly due to investor fatigue at “me-too” companies, and is also in line with overall decrease in seed stage deals by VCs.
The fact that VCs are returning to later stages suggests that there is a need for specialist early stage investors and a better integration of professional investors from the early stage to capitalize on the best early-stage startups.
CORPORATE ACTIVITY is continuing to pick up, with global corporate investment seeing an all time high in H1’2017, accounting for 15 percent of all investments—agrifood corporate contributions continue to climb, dedicating 2 percent to the overall total (KPMG Venture Pulse Report). Some high-profile acquisitions were made in summer, with John Deere acquiring robotics startup Blue River Technologies ($305 million) and DowDuPont acquiring Farm ERP startup Granular ($300 million).
Venture capital is driven by outliers, and so it is with AgriFood tech investments. Before going into the finer details of some investment themes from the industry, here are three such outliers:
Overall, AgriFood tech experienced a confident H1’2017, returning to the pre-2016 investment growth curve. It is also worth noting that the USA’s contribution to early-stage startups slipped by 2 percent since H2’2016 due to increases in other countries, predominantly Germany, France, Australia, Ireland, the UK, and Canada.
We at Rockstart AgriFood view the AgriFood supply system holistically, rather than as a segmented chain. This is of particular advantage considering that startups are increasingly addressing more than one phase of the chain with their solution. As supply chains get shorter, the need to consider the industry as one whole gets stronger.
This holistic focus allows us to focus on challenges for startups to solve as part of our investment scouting strategy:
Rockstart AgriFood is confident with the investment focus for 2018. Working with strong partners, like AgFunder, ensures that we can react ahead of the crowd and play the role of the early-stage experts when it comes to startups scouting and selection.
*We are proud to call AgFunder a partner of Rockstart AgriFood, and to welcome co-founder Michael Dean to the AgriFood Advisory Board.