We’re excited to have made the FoodTech 500 list for the second year running, and proves that we’re onto something! And we haven’t just made it, we actually sit at a respectable 2, a jump of 69 spaces from 2022.
Billed as a showcase of selected international AgriFoodTech startup and scaleup companies addressing the rapid need for change across the food system, the FoodTech 500 uses a unique methodology to rank them based on their business size, digital footprint, and sustainability practices.
Despite a challenging year which has seen stratospheric energy costs affecting all sectors, AgTech is on the up and up, with investment increasing. Startups in all industries raised $445 billion globally in 2022, a 35% decline from 2021. Yet investments into AgTech startups held up much better than in most industries. Last year AgTech venture capital investments made up around 2.4% of total startup investments.
The largest increase in investment dollars by category was in the Controlled Environment Agriculture sector, seeing over $700 million of extra capital invested in 2022 than was invested the year before.
In fact, there was an influx of outside capital into the upstream agriculture food-technology industry to the value of some $18.2 billion in 2021, an approximate 38% year-on-year growth since 2013. This has enabled the development of a whole host of of technological solutions in the sector.
This is all seemingly fantastic news – but there is one fly in the ointment. Despite strong investments over the last few years and a high openness to innovation, adoption hasn’t been so quick. A recent survey showed that direct adoption of AgTech has yet to properly align with investor and consumer sentiment—such as sustainability-related technologies and those supporting the switch to more sustainable farming practices. While Europe and North America lead the use of sustainability-related technology, at 9% adoption, there’s room for improvement across these regions.
Optimising the opportunity in indoor farming
Although AgTech offers significant opportunities to growers, what the above highlights is the evident need for more groundwork to be carried out to drive adoption. Four key areas have been identified:
- More bespoke products and business models: With levels of adoption varying from region to region, Agtech innovators now have the chance to further tailor products and business models, as well as provide more targeted solutions for growers. By focusing on the uniqueness of each farmer’s operations, AgTech providers can develop clear value propositions for their technologies, demonstrating ROI with measurable KPIs.
- Simplifying the customer experience: Agtech companies have the opportunity to consider solutions that are designed to improve customer service. For example, more product testing that leverages user-experience design principles could help solve farmers’ pain points in a more bespoke way. A balance of digital and more traditional, trusted person-to-person technical support has the potential to boost adoption.
- Renewing trust in data storage and sharing: Sharing data remains a sticking point with some growers, which AgTech leaders can exploit to build trust by refining their data strategy, streamlining data collection, and only gathering information that is required to deliver better products and solutions to farmers.
- Integrating solutions v amassing point-based solutions: Agtech businesses can drive more value by accessing data from various sources and ensure integration of their technology with the solutions farmers are already using.
With continuing intensive effort, Agtech has a golden opportunity to play an even more pivotal role through greater AgTech adoption, fuelling sustainable growth for farmers, and further encouraging investors.