2017 was a big year for AgTech.
While analysts and venture capitalists were wringing their hands and declaring that the startup boom is over, AgTech continued to move forward in leaps and bounds. In 2017, investors poured $700m into AgTech – more than double of what was invested in 2016, and triple the preceding year.
As the AgTech sector matures, we’re likely to see big disruption and innovation at every stage of the agriculture supply chain. Here are our top five predictions for the AgTech sector in 2018.
A lot of the big success stories in AgTech over the last few years have been firmly entrenched in the world of horticulture – on increasing yield and meeting challenges like irrigation and spray.
But in 2018, we’ll see more AgTech solutions geared towards livestock producers. Take, for example, Australian company Smart Shepherd, which is using IoT technology to make full pedigree tracking and recording more accessible for livestock producers.
Engender Technologies, based in New Zealand, uses lasers to orient and analyse sperm cells, before separating them based on the presence of an X or a Y chromosome.
There’s also the US-based BovControl, which helps cattle farmers keep track of their herds using cloud-based software. The company is using what it calls the ‘Internet of Cows’ to help beef and dairy farmers harness data and improve meat and milk production.
And in July last year, a portable abattoir concept on a mission to transform the supply chain for the red meat industry, took out top honours at the SproutX AgTech accelerator launch and pitch night.
In late November 2017, Monash University and Bosch announced that the two organisations would be working together to create Australia’s first smart agriculture research facility, at Bosch headquarters in Clayton, Victoria. The facility will house a prototypical 'smart farm' and enable collaborative industry partnerships and research.
It’s an ambitious project, made possible by significant investment from a multinational giant like Bosch.
While tech startups traditionally rely on funding from venture capitalists and angel investors, the essential nature of agriculture means that AgTech is also an attractive investment opportunity for established corporations and government departments – many of which have serious cash to invest.
The appetite for AgTech investment from both the both the public and private sector has led analysts to predict that 2018 will see a wave of AgTech ‘unicorns’ – that is, startups valued at $1b or more.
FinTech and Blockchain
The financial challenges in agriculture are unlike those of any other industry, with farmers battling high risk, high debt, fluctuating market prices, thin profit margins, high capital costs and high interest rates.
For founders trying to enter the AgTech space with little or no agriculture experience, these financial pressures can present barriers to adoption that they hadn’t previously considered.
That’s why, in order to make their products more accessible, some AgTech startups are branching out into the world of fintech.
In the US, Produce Pay is an online platform that allows farmers to connect and negotiate with buyers directly, helping them move produce and get paid faster. In India, RML AgTech is supporting the millions of Indian farmers who work on small plots, with a service that offers agronomic advice and support, financial support and a national, online marketplace.
And in 2016, Australian wheat farmers began trialling blockchain technology to reduce settlement risks – with a transaction between wheat farmer David Whillock and Fletcher International Exports in Dubbo marking the world’s first live settlement of a physical commodity on a blockchain.
Focusing on Farms as Businesses
When compared to other recent tech booms (FinTech, MarTech, EdTech), the adoption of AgTech has been relatively slow. And while it’s easy for AgTech startups to blame this adoption lag on the industry’s traditional practices, it doesn’t solve the issue.
In 2018, we will hopefully see AgTech companies doing less talking up of tech and more listening to the business needs of growers. According to Tim Marquis at PrecisionAg, the real reasons for lack of uptake are no secret. In his experience, growers are pretty clear about their main reservations to adopting new tech.
“Growers have been saying: ‘Have a well-established trusted adviser recommend it. Give out data products for free for a period of time to prove they work. Have solutions that require little added time to the day.’”
Founder and managing director of The Yield, Ros Harvey, doesn’t believe the slow adoption of digital tech in agriculture is a result of growers being risk averse, as many would suggest. But, rather, is a result of the fact that some solutions are simply too clunky and difficult to use.
“Most growers will try any technology, but the challenge is for companies like ours is to focus on the business problem we are trying to solve, and understand that first, before coming up with simple, user-centric designs that take how growers work into account,” says Harvey.
The Need for Food Security
Those at the frontline of food production are becoming increasingly vocal about the risks climate change poses to food security.
It is, of course, the driving force behind The Yield. With a growing global population, food production needs to increase drastically – which is why we’ve built a solution that accurately predicts microclimate growing conditions 7-days in advance, so growers have data-backed evidence with which to make vital decisions.
In small, densely-populated countries like Singapore, South Korea and Japan, high-tech urban farming is taking off. In Singapore, Panasonic grows around 40 varieties of vegetables in an indoor, controlled environment farm, while local startup Archisen uses IoT technology to bring modern farms to rooftops and urban buildings. Over in Europe, a Dutch entrepreneur is turning his attention to the oceans, hoping to feed the world with faux pasta and bacon made from seaweed.
And in Africa – a continent more affected by long-term food insecurity than elsewhere in the world – entrepreneurs are creating tech to address the specific issues African farmers face, to ensure that farm productivity grows at a rate in-line with population growth.
Digital innovation has the power to completely transform the way the world engages with agriculture. As investment in AgTech increases, and startups begin to better understand the needs of growers, we will see the sector mature into one that has real, tangible benefits for both growers and the world’s food supply.