The World of AgTech And Opportunities for African Entrepreneurs

AgFunder has released its annual AgFunder AgriFood Tech Investing Report – MidYear 2017 which expands the scope of their previous AgTech Investing Reports to include startups across the whole value chain, from farm-to-fork.  According to the report, in the first half of 2017, the firm recorded $4.4 billion of early stage investment in agrifood (yes, agriculture or ag) technology startups across 369 deals globally. The key highlight:

• Investment dollars increased 6% year-over-year indicating some recovery from 2016 lows. But there was a 27% decline in deal activity that was particularly acute at seed stage; this was in line with the global venture capital markets where deal activity reached a nine-year low in Q2. 

From the report, Tekedia will like to educate on the emerging categories of agriculture technology.

What is AgriFood Tech or Simply AgTech?

Agrifood tech is the small but growing segment of the startup and venture capital universe that’s aiming to improve or disrupt the global food and agriculture industry. As with all industries, technology plays a key role in the operation of the agrifood sector, a $7.8 trillion industry, responsible for feeding the planet and employing well over 40% of the global population. The pace of innovation has not kept up with other industries and today agriculture finds itself as the least digitized of all major industries, according to McKinsey.

The industrial agrifood sector of today is also largely inefficient compared to other industries, with an increasing number of demands and constraints being placed on it. These pressures include a growing global population set to reach 9 billion in 2050; climate change and global warming; environmental degradation; changing consumer demands; limited natural resources; food waste; consumer health issues and chronic disease.

The need for agrifood tech and innovation is greater than ever. This creates many opportunities for entrepreneurs and technologists to disrupt the industry and create new efficiencies at various points in the value chain. Agrifood tech startups are primarily aiming to solve the following challenges: food waste, Co2 emissions, chemical residues and run-off, drought, labor shortages, health and sugar consumption, opaque supply chains and distribution inefficiencies, food safety and traceability, farmer welfare, and unsustainable meat production.

There are many ways to categorize agrifood tech startups highlighting the complexity of the industry, as noted below. These categories are areas of opportunities for entrepreneurs.

• Ag Biotechnology: On-farm inputs for crop & animal ag including genetics, soil microbiome, breeding, animal health
• Farm Management Software, Sensing & IoT: Ag data capturing devices, decision support software, big data analytics
• Farm Robotics, Mechanization & Equipment: On-farm machinery, automation, drone  manufacturers, grow equipment
• Bioenergy & Biomaterials: Non-food extraction & processing, feedstock technology, green-chemistry, cannabis pharmaceuticals
• Novel Farming Systems: Indoor farms, aquaculture, insect, algae & microbe production
• Agribusiness Marketplaces: Commodities trading platforms, online input procurement, equipment leasing
• Midstream Technologies: Food safety & traceability tech, logistics & transport, processing tech, shelf-life enhancement
• Innovative Food: Plant-based meat, cultured meat & dairy, novel ingredients, nutraceuticals or innovative supplements
• In-Store Retail & Restaurant Tech: Shelf-stacking robots, 3D food printers, POS systems, food waste monitoring IoT
• eGrocery: On-demand grocery delivery, including farm-to-consumer marketplaces and specialty providers
• Restaurant Marketplaces: Online tech platforms delivering food from a wide range of vendors
• Online Restaurants and Meal Kits: Prepared meal delivery, often based on specialty diets, or pre-portioned ingredient kits to cook at home
• Home & Cooking Tech: Smart kitchen appliances, nutrition technologies, food testing devices
• Miscellaneous: e.g. cultured leather, land management tech, financial services for farmers