Agritech investments are growing tremendously as founders and investors recognise the potential of technology powered by profit-for-purpose business models to transform food production, distribution, and consumption.
Agritech investments are growing tremendously as founders and investors recognise the potential of technology powered by profit-for-purpose business models to transform food production, distribution, and consumption. In the past decades, VC investments in the sector have witnessed nearly 20-fold growth. Driven by financial viability and positive social impact, agritech companies are providing innovative solutions to critical issues like food insecurity, environmental sustainability, and economic inequality—at scale.
Merging agricultural practices with the latest technological innovations is a powerful tool at our disposal for tackling the interconnected challenges of food security, climate change, and resource scarcity. The veracity of this statement is evident in the observed growth of digital technologies in recent years, the robust policy initiatives, and the growing investment in all forms of Agritech.
Today, farmers can be empowered through technologies to make informed decisions about every aspect of their operations. With technologies that offer precise data-driven insights and automation, farmers can have more control over their plant growth, suppliers can improve their logistics and pricing, and consumers can access fresher, more affordable produce. That's the remarkable promise of agritech, in short.
Now, let's talk about some innovators in the agtech market.
AgUnity creates smartphone technology solutions that connect farmers to global supply chains. Its solution is mainly designed for small-scale farmers struggling with limited equipment, market access, financing, and knowledge. The company's leading technological solutions are a co-op management platform for farming members to manage transactions, a marketplace for advertisement and fairer prices, and blockchain-based traceability systems for ensuring transparency, security, and trust within the agricultural supply chain. With current operations in rural areas of 11 countries and over 17,000 farmers, AgUnity plans to extend to 30 countries by 2026, spanning African, Asia and Pacific regions.
FarmRaise is a digital platform specifically designed to empower small, beginner, and underserved farmers by providing access to vital financial resources. Through the user-friendly app, farmers receive personalised notifications about relevant grant opportunities, along with expert guidance and support throughout the application process. It also offers farmers accounting tools to track cash flow and other critical financial records.
FarmRaise operates on a subscription model, charging users a monthly fee alongside a 10% share of any grant awards secured through their platform. Currently, it serves over 20 farmers, mainly in the US.
Stellapps is an Indian company revolutionising the dairy industry with innovative IoT solutions. Their SmartMoo™ platform uses sensors and data analytics to improve cattle monitoring, milk procurement, cold chain management, and overall supply chain efficiency. This first-of-its-kind technology empowers farmers, processors, and consumers across India. Data from a third-party source confirms that Stellapps' technology spans 42,000 villages in the country, impacting millions of farmers and overseeing the daily monitoring of 14 million litres of milk.
The potential for exponential growth has drawn investors to spend big on innovation and technologies introduced by profit-for-purpose AgriTech companies in recent years. From 2017 to 2022, global funding related to agritech tripled in size. Although there has been a noticeable decline in funding up to the first quarters of 2023, experts still believe that interest in AgriTech solutions will continue to grow as long as technological advancements offer tangible solutions to pressing agricultural challenges.
AI, IoT devices, blockchain, and satellite connectivity are increasingly adopted by these agritech companies and deployed in various agricultural sectors, from agricultural management platforms and inventory management systems to field mapping services and micro-farming solutions. Artificial intelligence (AI) and machine learning, for example, leverage data collected by IoT devices to predict crop growth and improve farming practices.
Blockchain technology, on the other hand, is deployed for data security and transparency in the agricultural supply chain. Through the IBM Food Trust, IBM is helping agtech companies leverage its suites of blockchain technologies to enable traceability in the supply chain for all stakeholders. Farmer Connect, one of the adopters of IBM technologies, offers tailored end-to-end traceability solutions that allow agrifood startups to demonstrate sustainability practices to regulators and consumers.
The call for sustainable and ethical business practices continues to intensify. That could be because most SDGs are directly connected to agriculture, leading to more reform in local and international policies. Investors, on their part, are showing increasing interest in impact investing. Recognising these trends, old and emerging agtech companies want to integrate sustainability and ethical practices into their core values and operations. Profit is no longer the sole driving force.
See how Stellapps, the agtech company mentioned earlier, describes how its solutions enable sustainability:
Milk is the largest crop on this planet and there is a strong need for technology interventions, especially in the emerging markets where the yield per animal is low, traceability is inadequate and quality is not up to the mark. Digitisation of the Agri-Dairy supply chain in the emerging markets is where we help unlock unprecedented value on a very large scale.
Our company, Jiva, takes a different but equally important approach to sustainable agriculture. Focused on the regenerative farming movement, Jiva is on a mission to change the plight of smallholder farmers in India and Indonesia through digital microfinance, AI-powered advisory services, and direct market access.
There are numerous examples to cite, but that is beyond the scope of this article. However, we must point out that integrating sustainability and ethical practices is no longer optional but essential for long-term success in the agtech industry.
Recent huge investments in agritech startups demonstrate its vast potential. A 2023 report by McKinsey noted that venture capital firms in India poured over $1.2 billion into the agricultural sector, with over 100 deals completed in 2022. It further projected that continued strategic investment in the industry could increase farmers' income by up to 35 per cent and contribute $95 billion to the Indian economy by 2030.
Of course, there was a decline in global agtech investment, including India and Indonesia, in 2023 compared to previous years. In the first half of 2023, global funding for agtech startups declined by 40%. A report by FSG says India's investment fell by 45% in the 2023 fiscal year due to global shocks, including a hike in interest rates.
However, experts have predicted that the offerings of agtech companies can not be ignored in the long term by public and private investors because of the opportunities to fulfil climate action and feed a growing population through the offerings of these technologies.
Nonetheless, the risk of investing in the sector must be addressed. Financial Times reports in December 2022 that the global rise in labour, energy, and other input costs has significantly impacted the profitability of many agtech companies. This has forced many to review their business models and implement cost-cutting measures.
Further research shows that while farmers are interested in addressing sustainability challenges, agtech solutions may not always align with their values. This can make it difficult for agtech companies to achieve profitability and scale their businesses.
More funds set aside for agtech investment has attracted a surge of startups that offer purpose-driven technology solutions. That agtech startups raised $29.6 billion globally in 2022 highlights the maturing of the agtech market. For the future, agtech influence on the investment landscape can expect a continued influx of capital, driven by the proven track record of successful startups and the growing urgency of addressing global food challenges.
Agritech investments are growing tremendously as founders and investors recognise the potential of technology powered by profit-for-purpose business models to transform food production, distribution, and consumption.
Earth, the only habitable planet we know of, faces threatening environmental, social, and economic challenges, many of which are directly linked to our agricultural practices. As the global population continues to rise, the demand for food also increases, putting immense pressure on our planet's resources.
With concerns about land scarcity and the environmental impact of conventional agriculture, vertical farming has emerged as a potential solution.
Traditional farming practices are no longer sustainable due to a burgeoning population and a changing climate. To ensure a secure food supply for present and future generations, we must reimagine agriculture. This much-needed transformation requires a commitment to generating and applying knowledge and innovations that promote sustainable agricultural practices,
January 31, 2024
Agritech investments are growing tremendously as founders and investors recognise the potential of technology powered by profit-for-purpose business models to transform food production, distribution, and consumption. In the past decades, VC investments in the sector have witnessed nearly 20-fold growth. Driven by financial viability and positive social impact, agritech companies are providing innovative solutions to critical issues like food insecurity, environmental sustainability, and economic inequality—at scale.
Merging agricultural practices with the latest technological innovations is a powerful tool at our disposal for tackling the interconnected challenges of food security, climate change, and resource scarcity. The veracity of this statement is evident in the observed growth of digital technologies in recent years, the robust policy initiatives, and the growing investment in all forms of Agritech.
Today, farmers can be empowered through technologies to make informed decisions about every aspect of their operations. With technologies that offer precise data-driven insights and automation, farmers can have more control over their plant growth, suppliers can improve their logistics and pricing, and consumers can access fresher, more affordable produce. That's the remarkable promise of agritech, in short.
Now, let's talk about some innovators in the agtech market.
AgUnity creates smartphone technology solutions that connect farmers to global supply chains. Its solution is mainly designed for small-scale farmers struggling with limited equipment, market access, financing, and knowledge. The company's leading technological solutions are a co-op management platform for farming members to manage transactions, a marketplace for advertisement and fairer prices, and blockchain-based traceability systems for ensuring transparency, security, and trust within the agricultural supply chain. With current operations in rural areas of 11 countries and over 17,000 farmers, AgUnity plans to extend to 30 countries by 2026, spanning African, Asia and Pacific regions.
FarmRaise is a digital platform specifically designed to empower small, beginner, and underserved farmers by providing access to vital financial resources. Through the user-friendly app, farmers receive personalised notifications about relevant grant opportunities, along with expert guidance and support throughout the application process. It also offers farmers accounting tools to track cash flow and other critical financial records.
FarmRaise operates on a subscription model, charging users a monthly fee alongside a 10% share of any grant awards secured through their platform. Currently, it serves over 20 farmers, mainly in the US.
Stellapps is an Indian company revolutionising the dairy industry with innovative IoT solutions. Their SmartMoo™ platform uses sensors and data analytics to improve cattle monitoring, milk procurement, cold chain management, and overall supply chain efficiency. This first-of-its-kind technology empowers farmers, processors, and consumers across India. Data from a third-party source confirms that Stellapps' technology spans 42,000 villages in the country, impacting millions of farmers and overseeing the daily monitoring of 14 million litres of milk.
The potential for exponential growth has drawn investors to spend big on innovation and technologies introduced by profit-for-purpose AgriTech companies in recent years. From 2017 to 2022, global funding related to agritech tripled in size. Although there has been a noticeable decline in funding up to the first quarters of 2023, experts still believe that interest in AgriTech solutions will continue to grow as long as technological advancements offer tangible solutions to pressing agricultural challenges.
AI, IoT devices, blockchain, and satellite connectivity are increasingly adopted by these agritech companies and deployed in various agricultural sectors, from agricultural management platforms and inventory management systems to field mapping services and micro-farming solutions. Artificial intelligence (AI) and machine learning, for example, leverage data collected by IoT devices to predict crop growth and improve farming practices.
Blockchain technology, on the other hand, is deployed for data security and transparency in the agricultural supply chain. Through the IBM Food Trust, IBM is helping agtech companies leverage its suites of blockchain technologies to enable traceability in the supply chain for all stakeholders. Farmer Connect, one of the adopters of IBM technologies, offers tailored end-to-end traceability solutions that allow agrifood startups to demonstrate sustainability practices to regulators and consumers.
The call for sustainable and ethical business practices continues to intensify. That could be because most SDGs are directly connected to agriculture, leading to more reform in local and international policies. Investors, on their part, are showing increasing interest in impact investing. Recognising these trends, old and emerging agtech companies want to integrate sustainability and ethical practices into their core values and operations. Profit is no longer the sole driving force.
See how Stellapps, the agtech company mentioned earlier, describes how its solutions enable sustainability:
Milk is the largest crop on this planet and there is a strong need for technology interventions, especially in the emerging markets where the yield per animal is low, traceability is inadequate and quality is not up to the mark. Digitisation of the Agri-Dairy supply chain in the emerging markets is where we help unlock unprecedented value on a very large scale.
Our company, Jiva, takes a different but equally important approach to sustainable agriculture. Focused on the regenerative farming movement, Jiva is on a mission to change the plight of smallholder farmers in India and Indonesia through digital microfinance, AI-powered advisory services, and direct market access.
There are numerous examples to cite, but that is beyond the scope of this article. However, we must point out that integrating sustainability and ethical practices is no longer optional but essential for long-term success in the agtech industry.
Recent huge investments in agritech startups demonstrate its vast potential. A 2023 report by McKinsey noted that venture capital firms in India poured over $1.2 billion into the agricultural sector, with over 100 deals completed in 2022. It further projected that continued strategic investment in the industry could increase farmers' income by up to 35 per cent and contribute $95 billion to the Indian economy by 2030.
Of course, there was a decline in global agtech investment, including India and Indonesia, in 2023 compared to previous years. In the first half of 2023, global funding for agtech startups declined by 40%. A report by FSG says India's investment fell by 45% in the 2023 fiscal year due to global shocks, including a hike in interest rates.
However, experts have predicted that the offerings of agtech companies can not be ignored in the long term by public and private investors because of the opportunities to fulfil climate action and feed a growing population through the offerings of these technologies.
Nonetheless, the risk of investing in the sector must be addressed. Financial Times reports in December 2022 that the global rise in labour, energy, and other input costs has significantly impacted the profitability of many agtech companies. This has forced many to review their business models and implement cost-cutting measures.
Further research shows that while farmers are interested in addressing sustainability challenges, agtech solutions may not always align with their values. This can make it difficult for agtech companies to achieve profitability and scale their businesses.
More funds set aside for agtech investment has attracted a surge of startups that offer purpose-driven technology solutions. That agtech startups raised $29.6 billion globally in 2022 highlights the maturing of the agtech market. For the future, agtech influence on the investment landscape can expect a continued influx of capital, driven by the proven track record of successful startups and the growing urgency of addressing global food challenges.
