As the farm industry sparks worries about everything from genetically modified food to climate change, impact investors are increasingly betting on a post-chemical, sustainable future in agriculture.
Agriculture-related biotechnology, such as biofertilizer and microbiome, is seen as the most exciting thing for sustainable agriculture next year. Investors expect innovations in Ag Biotech to deliver better yield and higher nutrition while limiting the industry’s carbon footprint.
Ag-biotech was chosen by 58% of investors as the vertical they are most excited about in 2020, a recent report from Agfunder found, ahead of innovative food and farm management. Scientists are trying to utilize microbes to boost crop growth and develop alternative pesticide, such as biological-based insecticides.
“Pressure from consumers and governments is driving demand for ethically-produced goods and corporates are struggling to react, which presents opportunities for disruption,” Danny O’Brien, CEO of Idea 2 Scale & Field Academy, said in the Agfunder report.
Agribusiness giants and startups are racing to improve food security with new technologies. Deere & Co., BASF and Bayer, the owner of American agriculture group Monsanto, have acquired 11 agtech companies in the last five years, including Boragen, a molecule development company focusing on fungicide.
Private investors are especially attracted to biofertilizer and biopesticide. Global venture capital spent a record $194 million in the space this year, almost five-fold from last year. BASF’s Venture Capital arm invested in the Santa Monica-based biopesticide startup Provivi’s $85 million series C in October, the largest deal in the space this year, according to PitchBook Data.
- While American and European startups have raked in large chunk of investments, more than half of investors think Asia holds the most opportunities next year, according to the Agfunder research.
- Some investors identify India as the most exciting country for agriculture innovation. Three traits account for the investor optimism: the country’s massive cultivable land and fertile soil; inefficiencies in agricultural supply chain and abundant talents in the subcontinent, said Abhilash Sethi, investor from Omnivore Partners, a Mumbai-based venture capital firm focus on agriculture innovation.