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Farm Tech Investing Is Accelerating Faster Than Ever – New Report
‘Farm tech’ investing soared to $7.9 billion in 2020, topping 2019 investments by $2.3 trillion, or 41%, according to AgFunder’s latest Farm Tech Investment Report.
By Jessica Pothering & Louisa Burwood-Taylor
August 4, 2021
We’ve been watching the surge of investor interest in upstream, close-to-the-farm technologies since the Covid-19 pandemic started. We now have numbers that show just how significant that farm tech investor interest is.
‘Farm tech’ investing soared to $7.9 billion in 2020, topping 2019 investments by $2.3 trillion, or 41%, according to AgFunder’s latest Farm Tech Investment Report. [Disclosure: AgFunder is AFN‘s parent company.]
To put this in perspective, farm tech’s acceleration was about six percentage points greater than agrifoodtech overall — that’s foodtech and farm tech combined — and 37 percentage points higher than global VC’s year-over-year increase in 2020 (which Crunchbase pegged at just 4%.)
Much of the investment activity was led by two sectors: Ag Biotechnology and Novel Farming Systems (mostly the indoor farming of crops and insects). Investors pumped more than $1.5 billion into each category. Ag Biotech companies attracted particular interest from investors: 173 deals closed, representing 58% growth from 2019. Novel Farming Systems deal activity grew by 47% year-over-year.
As difficult as 2020 was globally (2021 hasn’t been pretty in many parts of the world), the pandemic seems to have buoyed farm tech because it “exposed cracks in the industrial agricultural system,” particularly the vulnerability of the food supply chain, Infarm’s CEO Erez Galonza told AFN in an interview featured in the report. The German hyper-local vertical farming venture, whose modular units can be found in grocery stores across Europe, secured $170 million from investors last year.
“[The pandemic] highlighted the need for resilient, localized solutions,” he added.
Farm tech funding 2012-2020
Yellow bar denotes projected total by end of 2021 as more 2020 data come to light. Credit: AgFunder
SPACs for best-funded farm tech categories
Perhaps the biggest winner, in that sense, was US-based high-tech greenhouse operator, AppHarvest. The company announced plans to go public last September via a special purpose acquisition company, or SPAC. It officially listed on the Nasdaq stock exchange in January, just weeks after shipping its first harvest.
AppHarvest recently purchased robotics leader and AgFunder portfolio company Root AI, making founder Josh Lessing the publicly listed company’s new CTO. Read more here.
AppHarvest kicked off a SPAC trend for Farm Tech companies, and Novel Farming ventures specifically. We’ve since seen four other agrifoodtech companies announce plans to go public through SPACs: agbiotech companies Benson Hill and Gingko Bioworks and novel farming ventures AeroFarms and Local Bounti. (Keep up to date with agrifoodtech SPAC news here.)
It is interesting to see public listing activity happening in the two agrifoodtech sectors that surged the most in terms of deal activity last year; it signals that there could be more to come if the process proves successful for these early case studies. For now, it’s certainly providing an exit opportunity to early agtech ventures that bet on deep technologies requiring significant amounts of time (and certainly hefty commitments of resources) to become revenue-generating, much less profitable.
That in and of itself is a significant milestone for a maturing agtech industry.
Pandemic pivots
It isn’t all about Ag Biotech and Novel Farming Systems; the biggest deals of 2020 were in the Agribusiness Marketplace sector. Boston-based Indigo Ag raised two investment rounds, totaling $535 million last year, and San Carlos, Calif.-based Farmers Business Network raised $250 million.
Indigo Ag’s executive team told AFN that because it deals directly with the food supply chain, the company confronted an immediate shock from the pandemic.
“The global pandemic was an external challenge that required our team, like many others, to quickly adapt to ensure that our customers and employees were supported,” they said in a special interview featured in the report. “While we were fortunate that our operations were not significantly impeded by the pandemic, we did have to quickly expand our support services and tap our creativity to enable our farmers, buyers and partners to manage their business with confidence during the early stages of Covid-19.”
The company launched a transport support hotline for grain growers, carriers and shippers to ensure the supply of grain could continue to move as efficiently as possible. It also focused on developing pricing tools, access to grain marketing advisors, and even a podcast to help growers grapple with pandemic-related market volatility.
Indigo Ag isn’t a stranger to unchartered business terrain. The company has put itself in the middle of the evolving but murky carbon markets. “With new players entering the carbon space nearly weekly – many taking less rigorous approaches to verification and measurement – Indigo has remained steadily focused on enabling farmers to make informed decisions about how, when and why to participate in the carbon market,” the Indigo Ag team told AFN.
They added: “By leveraging our scientific insight, technological capabilities, and use of industry-leading carbon accounting protocols, Indigo ensures farmers are supported with the right tools and information to take advantage of the opportunity to raise a new and increasingly valuable crop: carbon.”
Food’s sustainable future
Verification of carbon-capture accounting is indeed getting increased attention and scrutiny. It’s likely to be a key theme in the agriculture industry going forward, and it’s one of AgFunder’s key trends to watch in 2021, alongside overall food system sustainability.
“We can invent a new, sustainable food industry, feeding the planet all the while protecting its biodiversity, and combatting climate change,” the executive team behind French insect farming venture Ynsect told AFN. The company sees insects as a crucial component of food’s sustainable future.
“Insects can aid food security and be a part of the solution to food shortages, given their high nutritional value, low requirements for land and water, low emissions of greenhouse gases, and the high efficiency at which they can convert feed into food,” the Ynsect team argued in an interview featured in the report.
Investors seem to agree: Ynsect scored the largest amount of funding in the novel farming sector in 2020, raising $222 million in 2020, taking its Series C total to $372 million, to build an industrial-sized farm for its Molitor mealworms near the city of Amiens. Ynsect went on to acquire Dutch insect farming company Protifarm in April of this year.
Many of the world’s consumers may as yet be skeptical of insects as a protein source. But consumer consciousness and demand for high-quality, low-environmental impact foods is certainly a trend influencing the evolution of Farm Tech, as evidenced by the range of startups that attracted funding in 2020.
Ag Biotech ventures like Benson Hill, GreenLight Biosciences, and Pivot Bio secured investor backing for helping to diversify crop input technology away from environmentally-harmful synthetic chemicals.
Novel Farming ventures are developing highly efficient and resource-conservative approaches to growing fresh foods.
Farm Management Software, Sensing & IoT companies like ICEYE, Aclima and Cervest are illuminating climate change impacts and helping companies anticipate and forecast climate-related disruptions.
Food preservation technologies like Apeel Sciences’s are helping reduce food waste, as are e-grocery services like Misfits Market and Imperfect Foods, which sell “ugly produce” that would otherwise be wasted among their fresh foods and grocery offerings.
Companies like Celtic Renewables are turning farm waste into a resource through the production of biofuels.
“As companies increasingly make commitments to improve their environmental impact – and governments at all levels enact policies to encourage climate-smart agriculture,” said the Indigo Ag team, “the opportunity for agriculture to act as a climate solution will only become more apparent.”
Little Leaf Farms Raises $90M to Grow Its Greenhouse Network
Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.
by Jennifer Marston
Image from: Little Leaf Farms
Massachusetts-based Little Leaf Farms has raised $90 million in a debt and equity financing round to expand its network of hydroponic greenhouses on the East Coast. The round was led by Equilibrium Capital as well as founding investors Bill Helman and Pilot House Associates. Bank of America also participated.
Little Leaf Farms says the capital is “earmarked” to build new greenhouse sites along the East Coast, where its lettuce is currently available in about 2,500 stores.
The company already operates one 10-acre greenhouse in Devins, Massachusetts. Its facility grows leafy greens using hydroponics and a mixture of sunlight supplemented by LED-powered grow lights. Rainwater captured from the facility’s roof provides most of the water used on the farm.
According to a press release, Little Leaf Farms has doubled its retail sales to $38 million since 2019. And last year, the company bought180 acres of land in Pennsylvania on which to build an additional facility. Still another greenhouse, slated for North Carolina, will serve the Southeast region of the U.S.
Little Leaf Farms joins the likes of Revol Greens, Gotham Greens, AppHarvest, and others in bringing local(ish) greens to a greater percentage of the population. These facilities generally pack and ship their greens on the day of or day after harvesting, and only supply retailers within a certain radius. Little Leaf Farms, for example, currently servers only parts of Massachusetts, Pennsylvania, New York, and New Jersey.
The list of regions the company serves will no doubt lengthen as the company builds up its greenhouse network in the coming months.
NASA's Challenge To Grow Food In Space Can Win You Up To $500,000
There are thousands of bizarre challenges doing the rounds on the internet. These unique challenges soon go viral on the internet, with countless participants hopping on board. A number of these challenges also involve some form of food. If you're a food innovator who's looking for the next interesting challenge to take up, NASA (National Aeronautics and Space Administration) may have something for you. The NASA, in collaboration with Canada's CSA (Central Space Agency), has launched a 'Deep Space Food Challenge'. The one-of-a-kind competition seeks to find food production technologies which are sustainable in long duration missions to outer space.
NASA has launched a 'Deep Space Food Challenge' to prompt innovation of food production techniques and technologies viable in outer space.
Image from: Deep Space Food
There are thousands of bizarre challenges doing the rounds on the internet. These unique challenges soon go viral on the internet, with countless participants hopping on board. A number of these challenges also involve some form of food. If you're a food innovator who's looking for the next interesting challenge to take up, NASA (National Aeronautics and Space Administration) may have something for you.
The NASA, in collaboration with Canada's CSA (Central Space Agency), has launched a 'Deep Space Food Challenge'. The one-of-a-kind competition seeks to find food production technologies which are sustainable in long duration missions to outer space.
Our cargo resupply missions can only go so far! That's why we need your help to design a food system to keep our astronauts feed during long duration space exploration.
— NASA Wallops (@NASA_Wallops) January 30, 2021
Check out the @NASAPrize Deep Space Food Challenge: https://t.co/9mxtZXbwaC pic.twitter.com/izU8nSqPDc
A short video explaining the purpose behind the challenge was shared by the official handle. The 56-second clip elaborated on how astronauts embarking on lunar space exploration missions usually rely on pre-packaged meals or resupply of food through shuttles from Earth.
Thus, creating a brand, new food production system with minimal input and nutritious output with minimal wastage can go a long way in fuelling longer duration space explorations. The challenge's focus is on identifying food production technologies that can help feed a crew of four astronauts and help fill food gaps for a three-year round-trip mission with no resupply required from Earth.
These innovative food production methods may also help communities on Earth living in harsh conditions and extreme climates. This could also help tackle food insecurity in the future, which is one of the biggest issues that loom large today. "Solutions identified through this Challenge could support these harsh environments, and also support greater food production in other milder environments, including major urban centres where vertical farming, urban agriculture and other novel food production techniques can play a more significant role," stated the Deep Space Food Challenge's official website.
.@NASA & @csa_asc are launching a Deep Space Food Challenge to develop food production tech in space.
— NASA STI Program (@NASA_STI) January 28, 2021
Hey @GuyFieri, how about Diners, Drive-Ins, Dives & Deep Space? #STIdocs #Flavortown 🚀🥘
Read about it: https://t.co/fnz80uwpJT
See research: https://t.co/18q6RG3L2G pic.twitter.com/lSRTiiAFes
Registrations for the challenge close on 28th May, and submissions are due 30th July, 2021. Winners of Phase 1 of the challenge will be announced in the month of September this year. The prize money for winners of Phase 1 can go up to USD 500,000 (Rs. 3.64 crores approximately). So, if you have an exciting idea to produce food which could help future space missions - you know what to do!
"AGrowth AgTech Accelerator - 12 week programme"
The AGrowth Accelerator is a 12-week programme supporting innovative and scalable AgTech companies, from late seed through Series B stage. This programme focuses on delivering breakthrough innovations and technologies to impact the future of farming
The AGrowth accelerator programme is a 12-week programme commissioned by National Innovation Agency (NIA) and powered by Nest. Aimed at innovative and scalable AgTech startups, this accelerator programme supports startups and entrepreneurs from around the globe in delivering breakthrough innovations and technologies in AgTech to make an impact on the future of farming.
We are seeking AgTech companies that have established product-market fit and have
developed innovative solutions addressing the following areas:
Data transparency and analytics: data capture and analysis tools to maximise productivity
Automation & digitisation: technologies that can help reduce manual processes and increase efficiency
Logistics and supply chain visibility: platforms that create price transparency and visibility of logistic options and provide alternatives to incumbent solutions
New market identification and access: tools and platforms enabling farmers to access new buyers / markets
Urban agriculture: technologies to enable the creation of self-sustaining ecosystems in city environments, including but not limited to vertical and indoor farming
AGrowth Accelerator participants will be guided through their business growth and development with the help of business mentoring from NIA and Nest, as well as two leading corporates. It’s a great opportunity to establish a foothold in Thailand, or to expand your existing presence in the region through commercial partnerships.
The selected startups can expect a highly supportive and collaborative environment, with an opportunity to pitch their solutions. If chosen for the programme, startups will:
Be immersed in the innovation ecosystem in Thailand and establish a foothold to build a broader network in Asia as a foundation for future expansion
Be guided through a 12-week structured process working towards a potential PoC and possible commercial integration opportunities with two corporate sponsors
Gain exposure to business leaders and receive mentorship opportunities
Receive access to a network of investors as well as investment advice from Nest,
with the chance to pitch to investors at a demo day
Access customer insights regionally and internationally
Receive one round-trip flight as well as accommodations for the duration of the time
spent in Bangkok, Thailand