Crisis drives AgTech and reshapes investment strategies
In the past year — due to global inflation and high market fluctuations — we, investors have become more cautious about our investments. A major trend we have noted has been the funding of startups whose solutions have a positive impact on the environment, quality of life and security — including food security. AgTech, FoodTech and Climate Tech are the sectors that have gained the most attention and where the surge of investment has been noticeable in the last decade. Also for us.
AgTech boom
According to Croplife, 797 AgTech startups raised $10.66 bn in 2022. While this means a 13% decrease in the value of funding, the number of deals increased by 26% year-on-year. In comparison, CB Insights reports that the overall value of financing for companies last year fell by 35% year-on-year. This means that the AgTech industry is performing significantly better than other sectors.
The number of investments in startups that focus on sustainable solutions is expected to grow in 2023.
The global agricultural commodities and food markets are in the early stages of digitalisation, but this will progress very quickly. Soon, all stages of the industry’s value chain will be technology-driven. From precision agriculture, based on the analysis of data on irrigation, fertilisation and yield from a single plant in the field, to secure and transparent intercontinental trade on digital exchange platforms, said Piotr Łupiński, our Associate.
A response to the global crisis
Pandemics, climate-driven disasters and the war in Ukraine have taken their toll on global supply chains and dramatically reduced food security for millions of people, particularly those in Africa and Asia. As the UN estimates, almost 10% of the population — 828 million people — face significant food insecurity.
AgTech and FoodTech startups address these problems. They implement solutions that focus on improving agricultural productivity and sustainability. These include technologies that reduce or eliminate intermediaries in the supply chain, thereby reducing the risk of food crisis. By doing this, transport and waste costs are notably lower, resulting in reducing the carbon footprint of the final product. Innovations in AgTech can also provide real-time data that, when applied to business analytics, can help increase yields and grow products sustainably.
Amsterdam and London — Europe’s best AgTech ecosystems
Europe, which has been particularly affected by the ongoing war in Ukraine, is proving to be a key market in terms of agriculture and FoodTech solutions. The need for innovative solutions in the agriculture industry and food supply disruptions have created a sudden need for innovative solutions and strengthened the position of the emerging AgTech and FoodTech ecosystems in Europe — London, Amsterdam, Stockholm, Paris and Dublin.
Amsterdam, which in last year’s ‘The global startup ecosystem report AgTech & New Food edition’ by Startup Genome ranked second among the best ecosystems for developing companies in the sector in Europe and fourteenth globally, is particularly compelling. Among the Dutch AgTech startups worth keeping an eye on is Connecterra. It aims to use AI to increase farming productivity. Another interesting startup is Source.ag. They use advanced technologies to grow indoor crops in optimal conditions almost all year long, producing yields up to 15 times bigger than those grown in field conditions. And our portfolio company Vosbor, a digital exchange for agricultural commodities, that digitises the international trade in grains and oilseeds, making these markets more efficient, transparent and cheaper.
The first digital exchange for agricultural commodities
Vosbor, the creator of the first global marketplace for the wholesale trading of agricultural commodities, made headlines at the end of July last year. That was when this Dutch startup, with our participation, raised $7 million to create the first digital agricultural commodities exchange,
Maarten Elferink, CEO at Vosbor said: Vosbor brings the agricultural commodity trade online, allowing buyers and sellers to trade more efficiently, simplifying risk management in a world where supply chain risks are mounting, and providing market data that is unavailable today. We make commodity trading cheaper and markets more accessible while lowering the risks.
Whether you’re a founder that works on solutions within what’s AgTech, FoodTech or Climate Tech or an investor who’s interested in the areas, as MOC we’d be happy to get to know you and exchange views — feel free to shoot us an intro email at office@moc.vc
