Unicorns in Agriculture

AgTech’s Race to Join the Exclusive Unicorn Club

Jonathan L. Hua
Mar 30, 2019 · 4 min read

The world’s population currently sits at 7.7 billion people and is projected to reach a whopping 10 billion by 2050. As the population continues to grow at lightning speed, so will demand for food production. Over the next few decades, climate change, labor reduction and resource deficiency will make it challenging to reach this goal, so it is imperative that we find and support solutions dedicated to producing more food with fewer resources.

For several years, AgTech companies have flown under the radar. As companies like Uber, Slack and Lyft dominated news reports and media coverage about companies racing to unicorn status, AgTech companies largely went unnoticed. It wasn’t until Indigo Ag officially vaunted into the elusive realm of “unicorn” companies, after its Series D fundraise in 2017, that the world began to take notice of this industry. Since then, several AgTech companies like Plenty, Gingko Bioworks and Farmers Business Network have been raising mega funding rounds and putting AgTech on the map. I think we have a handful of “unicorn contenders” in the industry that are truly redefining the AgTech investment landscape and are paving the way for the next wave of Agrifood Tech companies that are attracting a more diverse crop of investors and scaling more quickly. According to AgFunder, the total investment in 2017 in the Agrifood Tech space was $10.1B, with 2018 financing hitting a record-setting $16.9B. In addition, 2018 saw an increase in late-stage pre-money valuation sizes and median financing size for AgTech companies. With indoor farming, drone software, ag commerce, genome and microbial tech, all competing for investors’ attention, we’re looking at several companies over the next few years that have a high chance of hitting $1B+ valuations.

I think the sector of Agrifood Tech that will have the highest concentration of unicorn contenders is next-gen farming. As urban populations continue to grow, and producers look for ways to roll out the freshest produce to consumers, it is clear that high-tech and vertically integrated farming solutions will be highly sought after in the years to come. Softbank’s Vision Fund really put indoor farming on the map with its huge investment into Plenty’s Series B in 2017 ($500M total funding). This move indicates that indoor farms are gaining traction and interest in key geographies such as Asia and the Middle East. This increase in available capital for next-gen farming solutions has also helped AeroFarms and BrightFarms raise $138M and $113M ($55M Series D in 2018), respectively, to continue scaling and growing to a $1B valuation.

The next hottest sector will be biotechnology, led by genomic, plant sciences, seed tech and microbial solutions targeting everything from soil health to seed development to crop quality. Indigo ($1.4B valuation) was the very first unicorn in the AgTech space, paving the way for another microbial competitor, Gingko Bioworks, to join them in the unicorn club off of a massive recent fundraise. Zymergen is not far behind. The space is becoming quite crowded but with the emergence of additional biotech companies in the space, like Cool Planet Energy Systems ($230M+ raised), investment activity in the space is likely to continue increasing over the next year.

Finally, data-driven solutions have made big splashes over the past year. Ag commerce solutions, including payment and insurance platforms, are gaining traction. These are important segments to watch out for over the next year, led by farm management company Farmers Business Network, that has already raised in excess of $200M and is well on its way to joining its peers in the unicorn club. On the precision agriculture side, Farmer’s Edge Laboratories has raised in excess of $100M and are strong contenders to reach a $1B valuation within the next couple of years, as the rapid digitization of the AgTech sector continues to stay strong. This, in turn, will also continue to encourage farmers and growers to adopt technologies to help boost operational efficiency, crop yield, and crop health. This wave of adoption will help boost the profile of information delivery and advanced analytics solutions like PrecisionHawk, which raised a $75M Series D in 2018 that pushed its total amount of funding to over $100M.

The future of farming is largely digital and automated. AgTech is an industry seeing massive disruption across all sectors. This is evident by the large volume of massive fundraises we’ve seen in the past couple of years that have created a new wave of agricultural incumbents racing to a $1B+ valuation.

This article was originally published in the 2019 THRIVE Top 50 publication that you can download here: https://thriveagtech.com/startups/thrive-growth/


Connect With Me: LinkedIn| Medium |

Jonathan runs the THRIVE AgTech Accelerator for SVG Ventures, where he empowers, supports and invests in early-stage, growth-driven startups that are using technology to advance the future of food and agriculture. Jonathan was also selected as part of the 2019 AgGrad 30 Under 30 class in the entrepreneurship category and his accelerator won “Most Valuable AgriFood Tech Accelerator Program” at the AgFunder Innovation Awards. Jonathan has a BA in history from Rice University and an MBA from the Cornell University — Johnson Graduate School of Management.

Jonathan L. Hua

Written by

Investor @ScrumVentures | AgGrad 30 Under 30 | @forbes U30 Summit Speaker | Formerly @thrive_agtech | MBA @cornell & History Nerd at Rice University

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