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Venture Capital Pours Into Ag

Venture capital investors poured $2.8 billion into the ag tech startups across the globe in 2019, according to the 2019 "AgriFood Tech Investment Review," an annual report from Finistere Ventures developed in collaboration with PitchBook.

While that's four times more money than 2015, how that money is being deployed is changing. Seventy percent of 2019's venture capital investments went to companies in later stages of development.

Investments in crop protection and input management are on the rise, while investments in digital agriculture solutions have stagnated. Last year, 37% of total ag tech venture capital investment went to solutions that boost yields, such as biologicals and seed treatments.

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Digital technologies, which include imagery, precision agriculture and farm equipment, saw a 4% decline in the number of deals, while capital investment increased 5%.

The report states that robotics advancements and proprietary technology have been attracting the most growth.

Agriculture has taken longer to adopt digital technologies than many investors anticipated "due to challenges with farmers (and channel partners) integrating diverse data and insights into meaningful action." However, the report's authors anticipate a "second wave" of investment focused on using farm-level data to create climate certification programs or traceability efforts favored by consumers.

As the field of venture capital investors in the ag tech space increasingly diversifies to include the likes of Amazon, SoftBank and T. Rowe Price, the focus on consumer-driven priorities in the ag space will only continue to grow.

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