Investing Insights: Agritech

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At the start of the pandemic, the world panicked. Supermarket aisles were left bare as people started to prepare for what seemed like the end of life as we knew it. To find tissue roll was an extreme sport and competing for a pack of pasta was definitely survival of the fittest. What if we told you that that could become a permanent reality in a few years time due to the growing climate change issue and the expanding population we’re facing globally?

In 1800, there were 1 billion people on the planet. In 130 years, this doubled. In less than 100 years, the population has now nearly quadrupled to 7.8 billion people and counting. This rapid rate of population growth puts massive pressure on both our resources and food supply.

Climate change has several consequences but most relevant is the change in weather, causing catastrophes, floods and droughts. These natural disasters not only affect the spaces in which people live, they also affect the amount of available space to successfully grow produce. This emphasises the issue of a potential food shortage by 2030. 

Not to mention that we have a growing ageing population. However, the jobs of our elders are dying at a faster rate. Younger generations are brought up in post-industrialisation societies where jobs in agriculture are no longer desirable. 

Whilst we may face pressing issues, there are many entrepreneurs and start-ups responding to the crisis in innovative and inspiring ways. 

💡 Out with the old and in with the new. 

Agritech is the use of technology to advance and improve the productivity and efficiency of agriculture. With all eyes turning to this industry to lead for humanity within the climate crisis, 2020 saw a record amount of investment in agritech companies: $22.3bn. 

Some of the benefits of agritech include providing us with higher quality food at a lower cost. The improvement of technology can allow farmers to monitor their stock and tackle issues before they escalate and create larger problems on their farms. Not to mention the shift in consumer behaviour. People want to know where their food comes from and the use of transparent trackable technology helps provide them with that information.

At a time where many young people are looking for roles in the digital and technology world, the day to day tasks of farming are also changing. What used to be a focus on manual labor – creating produce – is now wrapped up in creating produce faster. Companies like Lely are working with thousands of farmers to help improve their efficiency and increase profits. One of their technologies helps monitor cows’ health and flags up infections up to 72 hours before physical signs appear. 

In a similar space, Seedrs funded start-up, Mootral, has come up with solutions to reduce methane produced by cattle – the biggest producers of methane in agriculture. Mootral has developed a patented all-natural supplement reducing methane production from cattle by up to 38%. It would be challenging to change everybody’s dietary preferences to a no-meat lifestyle in order to reduce greenhouse gas emissions. Mootral’s supplement supports more sustainable meat and dairy farming, helps companies meet their carbon reduction targets and promotes positive economic futures and welfare for farmers. In August 2021, Mootral raised an impressive £1,868,130 from 795 investors through our platform, 185% overfunded. 

💡 The whole world is catching on. 

Japan is one of the countries experiencing the peak of the ageing population problem, with an average age of 67 for farmers. By 2040, they predict a shortage of 200,000 farmers as young people move into the city for work. Ahead of the curve though, Japan is taking advantage of the excess of capital and technology, building start-up agritech companies to lead the way. An example is inaho, an AI-based automated vegetable harvesting robot. These robots use image recognition to determine the health and conditions of crops, then a robotic arm harvests the yield, eliminating the need for human labour and reducing human error. 

Tech start-ups such as Krishify, an Indian-based networking app for farmers and agricultural professionals, are focusing on the human side of agriculture. Founded in 2019 by three IIT graduates, they successfully raised $2.7m in a pre-series A round, led by major investors including Omidyar Network India and Ankur Capital. Their technology allows farmers to connect with each other, seek advice from experts, access accurate information and receive a personalised feed on all things agriculture.

In America, David Perry launched Indigo in 2014, initially as a platform to help farmers improve the quality of their crops. They successfully raised $250m in a 2018 Series E funding round, bringing them to a total raised amount of $650m. The launch of the Indigo Marketplace, dubbed the ‘eBay for farmers’, helps buyers directly purchase produce from farmers. 

Africa, a continent usually overlooked for investment opportunities, is quickly becoming a hotspot for Agritech companies. Countries like Kenya and South Africa, have an abundance of land and many other countries are in the interim stage of development. In 2016, investment raised in Africa for agritech start-ups was at $4.33m, in 2020 this number increased significantly to $60m. 

💡 We are planting a few seeds of our own. 

Traditionally, farmers would sell their stock through physical markets or phone brokers. This was extremely inefficient, resulting in some farmers travelling hundreds of miles to the nearest market. Hectare, an online agricultural marketplace provider based in the UK, took it upon themselves to provide a digital solution. With one in three farmers in the UK using their system, Hectare provides services spanning across finance, escrow, haulage and insurance. Their platforms, SellMyLivestock and Graindex, help farmers trade directly with other farmers and large corporate buyers in a simple and secure way. 

After growing an active user base and international demand for their technologies, they decided to crowdfund on Seedrs so they could continue product development, increase their marketing efforts and begin working on the foundations of their global expansion plans. In 2019, Hectare successfully raised £1,365,425 from 973 investors, with an initial target of £1m. 

In the UK, we are also trying to navigate the implications of Brexit and what this means for our food supply chain. Harvest London is one of the innovative companies harvesting food on a made-to-order basis in controlled urban farms. They built the first vertical and hydroponic farm in London which put them in an excellent position to raise on Seedrs. In 2019, they completed a successful raise of £402,060 from 454 investors, with an initial target of £325,000. 

Square Mile Farms have noticed large employers rethinking the function and layout of their workspaces. With a lot of people working from home due to the pandemic, their Office Farming model creates inviting spaces, attracting talent back into the workplace. Their business model is based on installing vertical farms in workplaces with an estimated market size of £143m in London, and £621m in the UK. As the popularity of urban farming continues to rise, and moves into the inner cities, Square Mile Farms have positioned themselves well for a growing market. In 2020, with a crowdfunding goal of £200,010, they doubled their target, raising £504,118 from 891 investors on Seedrs.

Our active community of investors have noticed the issue at hand and are actively investing in these remarkable start-ups paving the way for a better and brighter future. 

To browse live investment opportunities on Seedrs, visit here. 

Source: https://www.seedrs.com/insights/blog/investing-insights-agritech