Crisis drives investment in agritech
As many as 797 agri and foodtech startups raised $ 10.66 billion in 2022: trend confirmed for 2023 as well
Investors have become more cautious in 2022, but the agritech sector has performed significantly better than others, especially in Europe. In short, the Old Continent is proving to be a key market in terms of agricultural and food tech solutions. So much so that, forecasts claim that the number of investments in startups focusing on sustainable solutions will grow this year.
Confirmation comes from Croplife, an international agribusiness trade association founded in 2001: according to the organization, as many as 797 agritech startups raised $10.66 billion in 2022. And although this means a 13 percent decrease in the value of funding, the number of deals increased by 26 percent from the previous year.
In comparison, business analytics platform CB Insights reports that the total value of funding for companies (not startups, then) declined 35 percent year-over-year last year-meaning that the agritech industry is performing significantly better than other sectors. Not only that, forecasts indicate that the number of investments in startups focusing on sustainable solutions is set to grow in 2023.
"Global agricultural and food markets are in the early stages of digitization, but this will progress very quickly -emphasizes Piotr Łupiński, an associate at Market One Capital, a Polish fund that has already invested in agritech and climate tech companies-. Soon all stages of the industry's value chain will be driven by technology: from precision agriculture, based on data analysis of irrigation, fertilization and yield of an individual plant in the field, to safe and transparent intercontinental trade".
Agritech startups are also increasingly posing themselves as an answer to the global crisis, ready to address (and solve) problems concerning global supply chains but also those that are challenging the food security of millions of people, especially in Africa and Asia.
They do so, implementing solutions that focus on improving agricultural productivity and sustainability. Not only that. They include technologies that reduce or eliminate middlemen in the supply chain, thereby reducing the risk of food crises. In this way, transportation and waste costs are significantly lower, resulting in a reduced carbon footprint of the final product.
Europe, particularly affected by the war in Ukraine, is proving to be a key market in terms of agricultural and foodtech solutions. Amsterdam, for example, in last year's The global startup ecosystem report AgTech & New Food edition of Startup Genome ranked second among the best ecosystems for developing companies in the sector in Europe and 14th globally.
Dutch AgTech startups to watch out for include Connecterra, which aims to use artificial intelligence to increase agricultural productivity. Another interesting startup is Source.ag: it uses advanced technologies to grow indoors in optimal conditions almost year-round, producing yields up to 15 times higher than those grown in the field.
Also important is Vosbor, a Dutch startup that in July 2022 raised $ 7 million to create the first digital exchange for agricultural commodities: an exchange that "digitizes" international trade in grains and oilseeds, making these markets more efficient, transparent, and less expensive.
"Vosbor brings trade in agricultural commodities online -explains Maarten Elferink, ceo of Vosbor-. It enables buyers and sellers to trade more efficiently, simplifying risk management in a world where supply chain risks are increasing, and providing market data that is not available today. We make commodity trading cheaper and markets more accessible while reducing risk".
EFA News - European Food Agency