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More Than $30 Million of Additional AgTech Deals in Abu Dhabi’s Pipeline
The Abu Dhabi Investment Office (ADIO) announced today upcoming developments in Abu Dhabi’s agriculture sector as part of continued plans to bolster local AgTech capabilities and innovations in desert agriculture
September 24th, 2020
The Abu Dhabi Investment Office
The Abu Dhabi Investment Office (ADIO) announced today upcoming developments in Abu Dhabi’s agriculture sector as part of continued plans to bolster local AgTech capabilities and innovations in desert agriculture. In the coming months, more than AED 110 million (USD 30 million) in financial incentives are to be offered to AgTech companies looking to establish or fast track their growth in Abu Dhabi.
The update was given at ADIO’s first sector-focused webinar, “Inside Abu Dhabi: Innovation in Agriculture”, which took place on 23 September and highlighted opportunities in the emirate’s AgTech space. The webinar was attended by participants from all across the world, including the United States, the United Kingdom, Israel, and India.
The new pipeline is part of ADIO’s incentive programme, established under the Abu Dhabi Government’s Ghadan 21 accelerator programme. The incentive packages include competitive financial incentives and other non-financial benefits for companies that develop and commercialise new arid and desert agriculture solutions based on pre-determined criteria.
The new deals will build on the milestones achieved by the four AgTech pioneers – AeroFarms, Madar Farms, Responsive Drop Irrigation (RDI), and RNZ – ADIO partnered with earlier this year to establish R&D and production facilities in the emirate.
H.E. Dr. Tariq Bin Hendi, Director General of ADIO, said: “We have made significant headway towards realising our mission of turning sand into farmland, prioritising innovation that has the potential to make real, lasting change in the region and beyond. Despite the current global conditions, 2020 will be a transformational year for AgTech in Abu Dhabi as we close in on deals to bring more pioneering companies to the UAE. We will continue to work closely with ecosystem players like the Ministry of Food Security, the Abu Dhabi Agriculture and Food Safety Authority (ADAFSA), and ADQ to support AgTech founders and startups with the resources and infrastructure they require to achieve long-term success in the emirate.”
ADIO announced in April that it made AED 367 million (USD 100 million) in financial incentives available to four AgTech pioneers, partnering individually with AeroFarms, Madar Farms, RDI, and RNZ to establish new R&D and production facilities in Abu Dhabi. During the first “Inside Abu Dhabi” webinar, each company announced significant milestones in their respective projects over the past five months.
USA-headquartered vertical farming company AeroFarms has set up its corporate office at Abu Dhabi Global Market (ADGM) to plug into the emirate’s innovation ecosystem and support R&D plans aimed at tackling agriculture problems within desert and arid climates. The company has also built out a local team, including hiring a general manager to lead AeroFarms’ Abu Dhabi strategy.
David Rosenberg, Co-Founder, and CEO of AeroFarms, commented: “Our excitement grows as we advance in Abu Dhabi the building of the world’s largest R&D indoor vertical farm in the world. We have set up corporate offices and started to build out an incredible team including our General Manager. We are working to finalise partnerships to co-innovate together in our Abu Dhabi facility as we work to solve some of the most pressing problems in agriculture in the region and the world. We are honoured to be working closely with ADIO to make Abu Dhabi a nexus for AgTech innovation and we encourage companies and universities to reach out and partner with us as we work on the next generation of agriculture breakthroughs.”
Madar Farms, a home-grown UAE AgTech innovator, has made significant progress in developing the local food offering in the market. The company has launched new products and is reaching consumers through expanded distributors and platforms. It is also partnering with a UAE education institution to teach students about AgTech and hydroponic systems, educating them about sustainable indoor agriculture from an early age.
Abdulaziz AlMulla, CEO and Co-Founder of Madar Farms, said: “We are happy to be part of the conversation. At Madar Farms, we are already leading a new agriculture revolution by growing a wide range of high-quality fresh produce every day here in the UAE with the use of advanced farming technologies. We want to create a lasting change by providing a holistic approach to sustainability and every day we are working towards achieving our vision and establishing Abu Dhabi as a global AgTech leader.”
RDI, which has developed an innovative irrigation system to transform water usage in UAE agriculture, has secured a facility in Abu Dhabi’s integrated trade, logistics, and industrial hub, KIZAD, to be used for industrial research, product manufacturing, and distribution. Given the emirate’s strategic location at the intersection of the Middle East, Europe, Sub-Saharan Africa, and Asia regions, the new distribution hub will allow RDI to reach more water-stressed countries that can benefit from its irrigation solution. The company is also set to install pilot projects using green technologies in Abu Dhabi over the coming months, paving the way for the development of the best AgTech practices in desert environments.
Jan Gould, Co-Founder, and CEO of RDI, commented: “The foresight and vision of Abu Dhabi’s ruler and its government leaders to focus and support innovations in agriculture has defined the UAE capital as a leader in ensuring food security for its citizens, developing local food supply chains, addressing challenges and preserving the planet’s precious resources for the future. Responsive Drip Irrigation is committed to working with ADIO and our partners in the AgTech programme to build a greener tomorrow for generations to come. With Abu Dhabi’s leadership and support, there is hope for recovery if we all work together. We just need to plant the seed.”
RNZ, which produces customised solutions for farming communities, has broken ground on a plot in KIZAD and laid the foundations for its new R&D centre, expected to be operational towards the end of the first half of 2021. The team is steadily being assembled with both a Head of Research and Head of Production appointed. The centre will look into developing effective agri-inputs to yield higher productivity, with an early focus being the development of 100% organic and residue-free solutions to support the region’s date palm farmers.
Raza Soomar, CEO of RNZ, said: “As our new R&D centre in Abu Dhabi begins to take shape, we are just months away from looking into solving problems for farmers and bringing effective solutions to the market that are relevant in Africa, Asia, and the Gulf. We are proud to be part of Abu Dhabi’s AgTech ecosystem and excited about the possibilities for RNZ’s new R&D hub.”
ADIO will announce further details of its upcoming AgTech deals in the coming months.
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AgriTech - A Hotspot For Investments
In recent times, AgriTech or AgTech solutions are gaining their popularity factor because individuals and entities alike, are becoming increasingly aware of the efficiency technology adds to their daily processes, which otherwise would have been tasking to follow through with. The ‘revolutionary’ factor has been highlighted in the AgTech space and hence, it has caught the eyes of investors and big corporations
AgriTech - The Sought After Technology Breakthrough
In recent times, AgriTech or AgTech solutions are gaining their popularity factor because individuals and entities alike, are becoming increasingly aware of the efficiency technology adds to their daily processes, which otherwise would have been tasking to follow through with. The ‘revolutionary’ factor has been highlighted in the AgTech space and hence, it has caught the eyes of investors and big corporations.
AgTech represents that specific niche category of technology buffs that intermingle the age-old occupation of agriculture with the new age specs and wonders of technology.
The specifics of Agronomic Processes:
The agronomic processes encompass diverse solutions in every step, ranging from the sowing of seeds to the harvesting of crops. The processes comprise of integrated resolutions to enhance efficiency within agricultural organizations, along with benefiting smallholder and marginal farmers.
AgriTech, breaking barriers and records:
The upward curve of investments and profitability within the industry does not seem like it would dip anytime soon, with a continuous maturity, breaking barriers, and records. Since 2013, funding within the AgTech sector has increased by roughly a whopping 370%. According to an AgFunder report, specifically, startup investments bucked global venture capital markets across all sectors to $4.7 billion in 2019. The 695 deals were carried out across 940 unique investors.
COVID-19 comes into play:
Similar growth cannot be expected for the remainder of 2020, due to Coronavirus governing industries across all business streams. However, there is less chance of the investments cutting to a freefall wherein they would dip way lower than initially expected. New investment projects may be put on hold, however, ongoing funding is expected to be perennial.
Localizing our viewpoint, we notice that most of these investments are still being carried out within the United States. However, investments in India continue to rise at a rapid rate, representative of a two-way flow (up-stream as well as down-stream) of funding, again highlighting the maturity of the sector.
The reasoning:
WHY? Every action has an equal and opposite reaction. Sir Isaac Newton was well aware of the specifics of investment and the network within which it functions. Our world is at a point today, where overpopulation is a severe problem in various countries, along with the overall population set to increase by 30% over the next 35 years, according to Global-Engage.com. According to a report conducted by FAO, agricultural production will have to increase by 60-70% to feed the world population by 2050. To work towards an increase in the production of food, along with keeping a tap on the factor of ‘sustainability’, it is essential and integral to adopt smart farming and smart agricultural practices, allowing processes and outcomes to become more efficient in the long run.
The Need for Emerging Trends:
The importance of utilizing ‘big data’ and ‘predictive analytics’ to counteract the issues faced by farmers daily is now more than ever. They will allow farmers to achieve and maybe even surpass their targets for the seasons, resulting in an influx of productivity. In a survey conducted with farmers, 60% mentioned that precision farming is an influential trend to look towards for a structural and foundational change in the way daily practices take place. With the risk of climate change looming overhead at all times, it is crucial to understand the essential need to channel funds towards projects that solve difficult and foreseen problems.
The Agricultural 4.0 wave:
Today, 25-30% of all food produced is wasted, which incurs a social, economic, and environmental cost of $2.5 trillion annually. An outdated supply chain with no digital integrations or climate-smart advisory results in around 20% of the crops produced in developed countries being left in the field itself. To spark a change and make a difference, socially conscious investors who look to profitability as well, view the AgTech sector as a gold mine, essentially killing two birds with one stone.
AgriTech today is an area that is ripe for innovation with limits imposed solely due to constraints in terms of available capital. When this constraint is counteracted, creativity applied to AI and food production will be ten-fold.