Report: Lessons from the Frontlines of the Agtech Revolution

The agriculture business is changing fast and large agribusinesses need to adapt ever faster according to a joint report — “Lessons from the Frontlines of the Agtech Revolution” — by AgFunder and Boston Consulting Group (BCG).

Despite net farm income falling to 65% of its peak from 2013, venture capital investments in agtech startups expanded rapidly the same year, reaching nearly $25 billion in 2015. As these two trends continue, the report’s authors recommend agribusinesses take a more aggressive investment posture bolstered by structured, long-term investment strategies to win the competition in years ahead.

To better understand the prevailing investment strategies and technology trends, the authors surveyed 50 executives from large agribusinesses and representatives from 15 VC firms. The survey questions examined 27 technologies within 6 agtech clusters (agricultural bioscience, data-enabled agriculture, automation and robotics, supply chain and logistics, agricultural processing, and alternative business models). Of the 27 technologies, 7 were prioritized by the survey respondents: big data and analytics, food security and traceability, biologics, optimization hardware, sensors and connectivity, new-crop technologies, and autonomous equipment. The study also included an analysis of agtech patent activity since 2010.

Highlights from the survey results:

  • 75% of respondents cited data-enabled agtech as a top priority, specifically big data and analytics and sensors and connectivity
  • 60% cited agriculture bioscience technologies as a top 5 priority, with biologics the most popular.
  • 45% cited automation and robotics as a focus, with particular emphasis on autonomous equipment
  • 40% cited supply chain and logistics technologies, especially those aimed at improving food security and traceability
  • 35% cited as a priority agricultural processing technologies, like biofuels, bioenergy, and biomaterials used to process agriculture outputs and reduce waste

Despite the seeming demand for new technology, the authors recognized that the investment approaches of these agribusinesses are too cautious. Current portfolios of investments are directed predominantly toward internal R&D projects and linked to existing products or technologies instead of aimed at building new capabilities and identifying new technologies. In response, executives cited a lack of talent and capabilities for scouting and identifying the right technologies and startups.

The authors offered a strategic framework to counter those challenges and others, which can be read in the report. Perhaps more informative, however, was the case study on Monsanto’s investment strategy best practices. Monsanto’s playbook for investing in agtech covers four key areas: internal company research, M&A, venture capital, and external partnerships with universities, startups and other large corporations. Monsanto’s investment strategy is diverse and very active externally. Other agribusinesses could do well to take note.

For more on the report, go here.

Originally published at on December 7, 2016.