In the face of global challenges including drought, unpredictable weather patterns, inflation, war and climate change, the agriculture industry is finding ways to keep up with our growing world. Agtech improves processes within the industry and develops technologies such as artificial intelligence, automated machinery, data analytics and farm management software that increase productivity and profitability. Technology developers, investors and agriculture experts are committed to meeting these challenges through supporting agtech startups as they innovate to feed the world. Let’s explore some of the key components contributing to the rise of agtech startups.
Increasing Food Supply
The Food and Agriculture Organization (FAO) estimates that by 2050 world population will grow to 9.8 billion people, and food production will need to increase by 60 percent. Agtech startups will play a significant role in this endeavor. Global agri-food funding in 2022 totaled $29.6bn. While this was a decrease from 2021 due to various economic challenges, many startups made profound impacts on increasing food supply.
Sustainability
Despite the decline in funding in 2022, some categories saw a year over year increase. Ag biotech, bioenergy & biomaterials, farm software & IOT, novel farming systems saw an agriculture experts in funding. One goal of these categories is to address climate related issues such as optimizing water use, maintaining healthy soil, reducing chemical inputs and preserving agricultural land. Specifically, bioenergy and biomaterials saw a 15% increase with a total of $2.3bn invested. Agtech companies receiving these funds focus on creating alternatives for plastic, animal-based materials and clean energy sources. A large portion of this investment, $500 million to be precise, went to LanzaTech, an agtech company with a carbon recycling technology. Feeding the world in a sustainable way is crucial, making climate related technologies a major pull for investors within the agtech industry.
Data Driven Agriculture
Capturing data using analytics and artificial intelligence influences several areas of farming. Farm management software increased 35% in 2022 with startups such as SupPlant raising $27 million and Perennial raising $18 million. SupPlant collects data from sensors and uses artificial intelligence to analyze data and give irrigation recommendations based on plant stress, growth patterns and weather patterns. Perennial is a soil carbon measurement company making precise predictions and capturing the unique carbon footprint of each field. Utilizing big data and artificial intelligence will be a large part of agtech startups in the coming years. Data driven agriculture helps farmers and ranchers make informed decisions, it increases traceability, transparency, and ultimately, profitability and productivity.
Investing in our Future
While 2022 may have seen a decrease in investments, the agtech industry is predicted to be on the rise in 2023. As the pressure is on to increase food production, innovation is no longer a distant thought,As the pressure is on to increase food production, innovation is no longer a distant thought, it is a necessity. Some highlights from a poll of venture capital investors predicts the following: correction in startup valuations, climate tech tech focus, and more upstream investments overall. As innovators and agriculture experts collaborate and with money from investors, agtech products become a reality to feed the world.
