Why Investors Are Betting On Agriculture Tech


The agriculture industry is obviously extremely important for the well-being of the planet. The industry provides the resources to feed the entire world. It is estimated that there will be approximately 9 billion people in the world by 2050, yet fewer people will actually work in the agriculture industry. This means that the industry has to improve efficiencies by developing new technologies and practices to make up for this loss in manpower.

As the GDP of a nation grows, the percentage of people working in the agriculture industry shrinks. This is increasingly becoming evident as world populations shift from rural to urban living environments. Additionally, people are becoming more aware of how food choices affect their environment, the working conditions of farmers, and the living conditions of animals. Consumers all over the world are developing an understanding of the overall health impact of food choices. Trends in healthy eating as well as the growing popularity of media and documentaries surrounding these issues have brought to light ethical and environmental concerns regarding the agriculture industry. This growing consumer consciousness fuels a need for transparency and change. Opportunity is ripe in the agriculture tech (AgTech) industry, where efficiency and sustainability can make a real difference. The goal for investors is to invest in a company with the foresight to drive real change in how food is produced and distributed, as well as streamline how data is captured.

Generally, farmers are not perceived to be tech-savvy. The perception is that the farming and agriculture industry is steeped in tradition, which is true in many cases. However, the industry as a whole is based around the analysis of data and patterns. With better data tools, can these patterns be analyzed more effectively and accurately? Many data-points such as weather patterns, crop yields, water use, effectiveness of pesticides, and the measurement of efficiency in operations are utilized on a continuous basis to optimize farming practices.

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Quite often, disparate tools are used to measure each of these variables, creating an opportunity for a company to consolidate data-capturing mechanisms. Big data technology companies are increasingly implementing solutions to cut wasted labor to produce more food using fewer resources. The reality is that in order to feed the growing population, farmers need to produce more with less. Farmers are certainly taking notice of this changing reality. In a recent study, evidence shows that farmers are increasing their use of precision technology. Precision technology is the concept of using technology to respond to field variability of crops. The usage of GPS and satellite tracking systems are often utilized. A study by Raj Khosla, an agriculture professor at Colorado State, measured that farmers that used one type of precision technology increased yields by 16% while cutting water use down by 50%. These technologies hold the key to the future ability to feed the world’s population.

Monsanto, the biggest seed retailer in the world, revolutionized the seed industry by genetically modifying them to increase productivity and eliminate spoilage while controlling pests. There is room for a big push in advancements in data-driven farming improvements and investors have taken notice.  According to the CleanTech Group, corporate and VC investments in the agriculture and food space have been increasing significantly. Google Ventures just led a $15M funding round in Farmers Business Network Inc. The company creates technology for farmers to diagnose yields, analyze yield impacts, and see how seeds perform on multiple fields. It markets itself as a full data solution for farmers. Last year, a $50M venture capital fund was organized in Davis California called the AgTech Innovation fund. The fund invests in early-stage food and agricultural-technology companies in North America. The thesis of the fund is to support companies that develop solutions to improve all aspects of global food systems, from farm to fork.

In addition, AgFunder’s Investor Report shows that in 2014, agriculture tech had a record breaking year with $2.36 billion raised across 264 financing deals. Investors and venture capitalists invested in companies ranging from precision agriculture to biotech to drones, and those that are changing how we grow, produce, and distribute food.

As our planet starts to require more resources, investors will see the advantages and the opportunity to invest in needs versus wants. The world will probably want the new iPhone, but will actually need more food for survival. Building farms with sustainable attributes creates a way to produce food without reducing resources. Net Zero Enterprises, an opportunity featured on DarcMatter, is an example of one such firm that implements sustainable agriculture solutions.


SEE MORE: Visit Net Zero Enterprises on DarcMatter


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