Apart from being the industry that is responsible for feeding the plant, agriculture is also an important pillar of most economies. Countries thrive with the revenue from agricultural business both domestically and through export of their local produce. Agritech includes all products and services that helps all forms of farming become more efficient through the inculcation of technology-led practices. Over the last two years, this segment has received $4.76 billion in investments, according to HexGn Agritech Startup funding report for 2019.
In 2019, the investments made into agritech startups was $1.7 billion bringing the investments down by 43% from the previous year. $1.3 billion of the total funding in 2019 was grabbed by agritech startups in North America. Barring South America and Oceania, the investments made into agritech startup declined terribly in 2019, with African startups facing the maximum brunt with no investments in 2019. While Oceania saw a growth of 3%, investments in South America grew by five times than what it picked up in 2018, according to HexGn Agritech Startup funding report for 2019.
Some of the names accredited to the highest funding rounds were PAX Labs, Impossible Foods, and Perfect Dat. All the three startups are headquartered in San Francisco Bay Area. PAX Labs is a cannabis startup that raised $42 million. This round was the highest funded round in 2019. At a country-level, the countries which took home the maximum investments in 2019 for agritech were the USA, China, Australia, Chile, and India, as per HexGn Agritech Startup funding report for 2019.
The funding in various funding stages also declined in 2019 with Seed, ICO & crowdfunding, and Private Equity startups getting hit the worst among all. Investments through Seed funding stage rounds dropped by 80%. The least decline was in the late-stage venture rounds for agritech startups which saw a dip of 26%.
With lives and ways of livelihoods changing in the coming years, agritech can be expected to pick up more investments in the coming years. There is a growing awareness about eating fresh and organic, a reduction in the availability of arable land and resources, and a various other factors which will ultimately push those growing and consuming food to look for alternative ways of farming. Some of the sub-segments that received were those of food tech, farm management & harvesting technology, and biotechnology & crop health.
According to HexGn Agritech Startup funding report for 2019, some sub-segments that did well, in terms of funding raised were San Francisco Bay Area, Fuzhou, Los Angeles county, New York, and Boston. The highest amount of funding was raised by startups in the San Francisco Bay Area – $946 million.
Of all the industries that faced a drop in funding in 2019, agritech was one that faced a rather severe hit with a decline of 44%. In 2018, the total funding received by agritech startups crossed $3 billion but almost halved in 2019. The number of deals too fell considerable from 500+ deals in 2018 to a just a little more than 100 last year. We have prepared a list of the top five countries that got the highest investments globally and what are the aspects they have shined in. For agritech, the top five countries that got impressive investments were the US, Australia, Chile, India, and Argentina.
According to the HexGn Agritech Startup funding report 2019, Investors poured in $1.4 billion in investments last year, falling 30% from the 2018 numbers. There were 33 rounds where the money raised was over a million dollars. Startups like PAX Labs and Impossible Foods which got the maximum funding among all American agritech startups were also among the top startups at the global level. PAX Labs specialises in designing and developing cannabis related products raised $420 million while Impossible Foods creates plant-based cheeses, it raised $300 million last year.
Farmers and agricultural companies in the USA have been trying to make the most of the data available in the market that can improve farming practices. There has been more openness towards adopting modern agritech tools. However, the falling investments into agritech ventures could either mean that the segment is saturated with all the innovations that it could offer or there is a dearth of startups that stand out to investors. Late stage venture deals in the US saw the maximum investments fall through with $557 million, however, this stage too like all other stages recorded a dip in investments in comparison to the amount of money raised in 2018.
The agritech segment in Australia has been gaining significant impetus over the last few years, owing to several innovative ventures coming forward. Last year, the funding raised by Australian agritech startups grew 1.5 times the amount raised in 2018. The total funding touched $35 million in 2019 and made the country down under one of the top five nations for agritech Startups, according to the HexGn Agritech Startup funding report 2019.
There were only three three funding deals by agritech startups in Australia last year. The highest ranked round was of food-tech startup v2Food which raised $35 million in its Series A round. The startup specialises in creating plant-based meat. The other two startups that raised funding were agtech service provider venture Origo.farm which got $375 k in investments and the other one was Perth-based Laconik which got a grant of $250 k.
All the three rounds have given an impetus to increased funding in the early venture stages. The investments in the stage increased by 2.5 times.
For Chile, the increase in the funding in the agritech industry has been monumental. The investments grew from $88 k to $30 million in a matter of a year. For the Chilean startup ecosystem, this can be seen as an effective boost as it puts the country among the top five nations with notable funding rounds in 2019. Agriculture is an important pillar of the economy in Chile and a growth in the agritech startup segment can further boost it to help the developing country make a mark globally, according to the HexGn Agritech Startup funding report 2019.
However, there was only one agritech funding round in Chile last year. This was the Series A round for The Not Company, based in Santiago. The venture pairs artificial intelligence and food science to create plant-based foods.
This round was an early stage venture round and the first time in the last two years when there was an investment at this stage.
In India, agriculture is an important category of livelihood for a large proportion of people. However, despite its prominence there had been hardly any tech-led innovations in the industry, up until a few years ago. It is safe to say that the agritech scene in India picked up in the last two years, based on the growth in the investments in this industry. There has been a 40% increase in the funding raised by Indian agritech ventures since 2018. According to the HexGn Agritech Startup funding report 2019, the total funding in 2019 came up to $28 million.
The highest amount raised in a single round by agritech startups in India last year was $6 million. Ecozen, an agritech supply chain venture and Nu Genes, a company involved in seed production, processing, and marketing completed their Series A and Seed round raising this amount. Supply chain ventures were favoured more last year as bad supply chain management is one of the major pain points of the Indian agricultural industry.
There has been an increase in investments in late stage venture, seed stage deals, and those at the ICO & crowdfunding stages last year.
According to the HexGn Agritech Startup funding report 2019, the investments in the agritech segment in Argentina witnessed a leap in the funding growth from 2018 to 2019. While the investments made into the industry in 2018 had capped at $1 million and from there grew to get $23 million in investments last year. For countries like Argentina, a growth in the investments in the startup ecosystem can effectively help it in making an impact on the economy.
This country too finds a place among the top five nations within the agritech industry owing to a single funding round in 2019. Agrofy is an agricultural e-commerce startup and is the only agritech startup in Argentina to raise funding last year. It completed its Series B round through which it got an investment of $23 million.