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Agritech is the use of technology to advance and improve the productivity and efficiency of agriculture. With all eyes turning to this industry to lead for humanity within the climate crisis, 2020 saw a record amount of investment in agritech companies: $22.3bn.
Keep reading to find out which startups are on our watch-list this month.
Food supply and production accounts for over 23% of our per capita carbon emissions. But the pressure on these systems continues to grow as populations, especially in countries experiencing rapid industrial and digital revolutions, continue to expand. Global food demand is expected to grow from anywhere between 59% to 98% by 2050. But as this grows, the devastating impact on our planet will grow with it, all while agricultural yields decrease, potentially causing widespread food shortages.
While Seedrs portfolio companies like THIS and Oddbox continue to develop new ways to change our consumption habits, there is a growing industry of Agritech companies who are looking at how we can address the issues in our food production. These companies are being fuelled by billions from venture capitalists wanting to capitalise on their gains if they can impact our food production at scale.
By various differing estimates, investments into Agritech businesses increased by between $2.3 and $3.9 billion in 2020 alone. These investors are backing a huge diversity of potential solutions to our food production issues. Octopus-backed Dogtooth, for example, is looking at ways to address labour shortages in farming with fruit picking robots, while Seedrs portfolio company Drygro is looking at ways to grow food in dry and arid environments.
However, one deal I’ve been paying particularly close attention to is Arborea, who raised a €3.6m round led by BGF in June. Arborea have industrialised the photosynthesis process, producing cells that can create hundreds of different ingredients. In addition to being able to replicate necessary proteins and antioxidants, Arborea claim that their BioSolar Leaf growing method achieves the highest production yield of any plant-based protein. It is grown without soil, meaning it can be produced in arid and urban environments. If they can replicate this technology at an industrial scale, Arborea could significantly decrease deforestation, land degradation and carbon emissions from food production, as well as increasing food security.
Seed fundraises in the Agritech space tend to focus almost entirely on R&D since the solutions that farming requires for efficiency and sustainability gains are often complicated, and development is cost-intensive. The market that these solutions are aiming at, though, is absolutely enormous, and the rewards for breaking into it are significant.
Most projects you’ll see looking for equity funding will be taking on a part-grant, part-equity approach, which provides interesting value-for-money for investors. The EU, in particular, has been a huge grant funder to Agritech initiatives. The businesses are also very often spinouts from university PhD projects, and can be aided by research grants from their home institution.
One example of this is EcoNomad, a business run by a CEO with a PhD in Environmental Engineering and a COO with an MBA and extensive experience in finance and operations. They have benefitted from EU and Innovate UK funding to get to a prototype stage, and are now looking at raising some equity to support the advancements of trials for their products, which focus on waste reduction and sustainable management of agriculture.
The UN reports that nearly 50% of all fruit and vegetables produced globally are wasted each year. Losses at the farm level are estimated to be around 15-35% of this, depending on the industry. The economic cost of this is enormous.
FungiAlert are soil health and plant disease experts looking to solve this problem. They are passionate about increasing agricultural productivity and sustainability by using key data about soil to reduce crop loss. Founded by Kerry O’Donnelly Weaver and Ángela de Manzanos Guinot (both PhD holders), the all-female team is also supported by a panel of female research scientists. Their technology acts as an early detection system for a soil-based pathogen which is estimated to destroy harvests worth up to $2-7bn per crop, each year. They claim to be able to do this at a fraction of the cost and time of any competitor.
FungiAlert was founded back in 2015, spun out of Imperial College London, and has raised approx £2m to date, most recently closing a £1m in August 2021 led by Oxford Innovation EIS Growth Fund and the Oxfordshire Investment Opportunity Network.
Women are typically underrepresented in STEM careers and so it is inspiring to see a female-led team creating technology that has the potential to have such an enormous impact on both our planet and the agriculture industry. With their latest investment round now closed, I’m looking forward to seeing their next phase of growth.
The agricultural sector is rapidly moving away from manual labor to digital solutions: data-driven, connected, autonomous and robotic. This digital transformation is often driven by small and agile startups. One of the recent trends in the industry is precision farming, also known as Site-Specific Crop Management (SSCM), a method that uses satellite or drone imagery to streamline and optimise crop and farm management.
VanBoven, an ambitious startup from The Hague, The Netherlands, is one of the precision farming pioneers in Europe. The company is on a mission to unleash the power of data in the value chain of fresh vegetables. Since its incorporation in 2019, the startup has shown significant traction and is backed by the EIT Climate KIC.