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Venture capital investment in agtech continues soar

Venture capital investment in agtech continues soar

The agtech sector continues to draw record investment as venture capitalists (VCs) and other investors seek to finance solutions to the growing issue of food security amid a rapidly growing global population.

Ben van Delden

Partner, Management Consulting, Head of AgriFood Tech and Circular Economy Advisory

KPMG Australia


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The agtech sector continues to draw record investment as VCs and other investors seek to finance solutions to the growing issue of food security amid a rapidly growing global population.

VCs are particularly attracted to technology and innovation that helps provide more scale, sustainability and predictability in agriculture, a sector known for its unpredictable weather and market volatility.

VC investment in agtech continues to break records

2017 was a blockbuster year for VC investment in Agtech, with over $1.7 billion total invested on the power of a series of mega-deals late in the year, including Ginkgo Bioworks, Indigo Agri and Farmers Business Network. In 2018, we’ve seen this momentum continue with more than $600 million invested across 105 deals in the first 5 months of the year, including AgriProtein ($107 million), Edico Genome, ConCentric ($54 million) and PrecisionHawk ($75 million).

New technology gives investors comfort in agtech investing

Agriculture has become a destination for VC investing due largely to the advancements in technology that help farmers better predict, manage and boost crop production. Traditionally, agriculture has been seen as a volatile industry, given the unpredictability factors such as, of the weather, pest and disease outbreaks and regularly fluctuating commodity markets. Companies that offer technology that helps to smooth out the food production process – from field and soil to the supermarket – are considered attractive.

Technologies that also help to boost production and increase crop yields, while reducing financial and environmental costs, are also in favour in today’s agtech market. VCs are excited by Agriculture 4.0 and a range of technologies being developed and refined including crop sensors, satellite imagery, the IoT, blockchain, swarm robotics, automation and data analytics, to name a few examples.

For instance, distributed ledger technology is helping to trace the physical product through the supply chain. This is important for efficiencies, but also meets a growing demand among consumers to source where their food comes from. Another example is AI, which is helping farmers better analyse animal behaviour, as well as identify and track potential ailments. Meantime, predictive analytics is being used to assess moisture levels in a field, which helps growers ensure their crops received the appropriate amount of water and better predict growth curves, yields and harvest dates.

Agtech attracting a hybrid of corporates

The agtech sector is maturing, as evidenced by a first wave of agtech unicorns, expansion of VC activity and interest from big players in both the agribusiness and technology sectors. There are more than 30 active funds joining the agtech-focused funds such as Khosla, Fall Line, Finistere, Innovation Endeavors and S2G, among others1. There were also some meaningful VC-backed exits in 2017. M&A activity is expected to remain robust in the sector and a focus on the agtech start-up scene where early-stage companies are developing various digital solutions to help improve crop production.

Large agribusiness players are expected to be active in M&A in the near term, as well as tech and retail giants such as Google and Amazon, alongside more state-owned corporations. For instance, we could see more financings like the $110-million Series D announced by Farmers Business Network late last year, which included a mix of investors from Singapore’s state investment firm Temasek to Kleiner Perkins Caufield & Byers and GV (formerly Google Ventures)2

Agtech investment has few geographical boundaries

While the US, China, India and Brazil have a strong interest and investment in agribusiness and agtech given their growing populations – and mouths to feed – there are also innovative solutions coming out of Israel, Australia, New Zealand and the Netherlands. For example, regions with multiple climatic conditions, such as Australia, are most likely to have a wider range of agtech solutions. Meantime, Israel has developed a strong reputation for its agtech innovation pivoting from defence technologies, while the Netherlands has a strong reputation in the horticulture and floriculture space.

There’s also a trend towards clustering, in particular bringing together ecosystems that include industry bodies and research and knowledge players. The triple helix of industry, research and government then start to attract the fourth key ingredient: capital – which is where VCs are starting to play a larger role.

Trends to watch in agtech

Agtech companies are trying to disrupt how, what and where we grow. Their goal is not only to help feed more people more efficiently, but also to get aligned with the growing trends of transparency, traceability and sustainability in food production.

Different technologies are helping to marry these various interests. For example, robotics will become more important as producers are under greater pressure to get the crops off the field, into the packaging and then through the supply chain as efficiently as possible – and with the ability to track the journey from farm to plate.

We also expect to see more consolidation not just of companies, but applications for farmers. This will likely include putting multiple sensor-driven data inputs together and giving farmers fewer platforms to work with either in the cab of their tractor, on their smartphone or a desktop. The financial services sector is also expected to get more involved in agribusiness and agtech, as it starts to think differently about its role in the production of food and insurance. For example, insurers have an increasingly important role to play around crop risk given the more severe weather patterns, from flooding to drought, that are affecting global food production.

Lastly, there will be more emphasis on sustainability in farming to help protect the planet. One example is a system where farmers are financially rewarded for their role in helping support sustainability, which can then lead to lower financial and credit costs across the supply chain. That, in turn, will lead to the adoption of technology to support the system. Regardless of the technology and its intended solution, the future of agtech is about delivering certainty for all stakeholders including farmers, bankers, investors and consumers.


"As governments and NGOs strive to ensure they have sufficient food and water for their people, and meet their environmental stewardship obligations, we expect to see interest in agtech grow significantly and more VC activity."

Ben van Delden
Partner, Head of AgTech, KPMG Australia


  1. Major trends in agtech for 2018, Arama Kukutai, Spencer Maughan, 9 March, 2018.
  2. Farmers Business Network raises $110 million to bring price transparency to agriculture, Anna Hensel, 30 November, 2017.

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