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AgTech Landscape 2019: 1,600+ Startups Innovating on the Farm and in the ‘Messy Middle’

Editor’s Notice: Seana Day is a Associate at Better Meals Ventures and The Mixing Bowl, with 15 years of finance, M&A and know-how experience. She is the writer of the 2019 Agtech Landscape and Livestock Tech Landscape. Seana now lives in Turlock, the coronary heart of California’s Ag land.

As lots of you might know, I’ve been monitoring the majority of agtech startups for close to five years. With this launch of the 2019 AgTech Landscape, I’m now monitoring over 1,600 startups.

It’s been a wild experience watching the agtech landscape explode these past five years. We now have seen the rise of in-field sensors and technologies like drones develop into commodities; the transfer from sensing for in-field knowledge to correlating and analyzing knowledge for insights that can be rolled up into farm management techniques; the emergence of higher farm enterprise administration instruments; acknowledgement of the want to attach “ag” to “food”; and the rise of latest, disruptive marketplaces connecting the seed-to-store value chain. It’s an understatement to say that the agtech panorama is creating and maturing rapidly.

Here’s a quick background on the landscape earlier than I dig into my key takeaways under:

Landscape Map Background
  1. That is heatmap more than a complete listing. I might recommend you employ the panorama as I do, as a software to offer perspective on the place activity is (or just isn’t) and recognize a few of the noteworthy corporations in specific sub-sectors of AgTech. The objective of the panorama is not to exhaust your eyes with a complete listing of all of the AgTech startups and corporations.
  2. Focus on IT for ag: The landscape focuses predominantly on digital and Info technology-related technologies, comparable to my expertise and that of my colleagues at Better Food Ventures and The Mixing Bowl.
  3. AgTech: seed via provide chain. My colleague Brita Rosenheim and I call part of the supply chain “the messy middle of food” the place agtech meets foodtech, and that’s included right here alongside farmtech.
  4. Focus on crops and outside agriculture: This market map does not embrace livestock-related technologies, including aquaculture, or indoor farming as I want to stay targeted on the wealth of improvements for the outside crop farming world. (Watch out for the subsequent Indoor AgTech Landscape from my colleague Michael Rose soon).

Key Takeaways 2019 AgTech Landscape

Publish-Harvest technologies gather steam: In earlier years, this panorama was a more equal division between “In-field” and “Post-harvest” startups, but now we’re seeing extra startups — close to two-thirds — focusing on the post-harvest area.

In fact, the in-field area continues to be growing, notably in some areas. For example, this yr I created a new class for startups associated to bees and pollinators referred to as “Insect Sensing/Monitoring.” We now have additionally added a class of “Labor Management” as we see know-how springing as much as tackle the acute challenges in the specialty crop sector with next-gen corporations like Pago, Ganaz and HY enhancing the discovering, preserving and managing of agriculture labor forces.

An necessary driver of this broader activity in agtech is a shift from “farming to maximize yield” to “farming to maximize profit” by taking a look at farming operations, not simply precision ag. Ample manufacturing in key commodities like grains and dairy have brought on prices to drop and subsequently producers search ways to make farming operations extra environment friendly.

Correspondingly, we are sensing a larger or renewed curiosity in farm management methods that hyperlink farming operations (digital agronomy) more tightly with farm business/finance operations to chop costs, determine new or lost income streams, or look extra holistically at their true value of production by looking for new data-driven financing choices, for instance. Producers need higher linkages between the techniques monitoring the activity in the area and their monetary methods, not simply the value of what producers are doing in the area. Present corporations like Conservis, Granular (part of Corteva), EFC Techniques, and AgDNA are all taking steps to bridge the farm business knowledge hole.

“Digital Marketplaces” are making it potential for farmers to purchase inputs immediately or lease/lease gear (i.e., “Uber for tractors”). A lot of this digital market or “collaborative commerce” action is occurring in creating economies the place the unfold of related digital units amongst farmers is enhancing entry, although there are key gamers in the US resembling Farmers Business Network.

Drivers of the progress in “post-harvest” innovation might be attributed to elevated focus on the typically ignored “first mile” of meals logistics and transport after the farmgate to the packer, shipper or processor. This phase consists of logistics, sensing and analytics applied sciences that may be utilized at the point of harvest by means of to the packer, shipper or processor.

This “Messy Middle of Food” could possibly be drastically improved and by means of better integration of on-farm exercise with post-harvest exercise (like logistics, freshness monitoring, and processing) there could also be methods for food producers to scale back waste, enhance profitability, monitor high quality, or develop new value-add opportunities.

Funding to Midstream Technologies, as AgFunder calls them in their funding reviews, elevated 44% to $852 million in 2018, and while that’s the fourth largest upstream class, it’s far behind the “last-mile” consumer-focused startups where more than $eight billion of funding went in 2018.

When you consider that food waste is a $1 trillion query — and that meals delivery apps may be exacerbating it (plus plastic packaging) — funding can typically seem misaligned with the place innovation is needed.

The will for better monitoring, transparency and safety in our food system can also be driving innovation. Knowledge transparency will provide the linking mechanism in the beforehand mentioned drivers and also handle the want for food corporations to tell shoppers about the provenance of their products.

I might be remiss to not mention the buzzword of “blockchain for food”. I see this as a triggering know-how that may wind its approach– steadily– by means of the messy center of food, driven in half by Walmart and IBM’s Foodtrust. That stated, the adoption curve feels farther on the horizon in agriculture than many may need you consider; not only will farmers and ranchers wrestle with the value/advantage of adoption of blockchain, however there’s nonetheless loads of work to be accomplished to determine the primary knowledge flows in agriculture operations. The info must be in place first before we will start blocking and chaining it. The shortage of adoption of open agriculture knowledge standards has a lot of at present’s ag knowledge siloed and is a key barrier to seeing larger monitoring and tracing in the business.

Value Chain Enablers: A second, huge macro change you will notice to the panorama in comparison to yr’s past is the horizontal band at the bottom for “Value Chain Enablers”. Additional to the above theme of a larger focus beyond the farm, I need to acknowledge that a rising number of ag applied sciences are enabling each “In-field” and “Post-harvest” to attach and create a fuller worth chain.

A brand new space in this category is “Integrated Solutions” which are well-financed corporations like Farmers Enterprise Community, Benson Hill and Indigo Ag that aspire to turn provide chains into new value chains, creating larger linkages between farming and finish food merchandise, equally for StellaApps and dairy in India. Wanting forward, it is doubtless we’ll proceed to see startups deal with the full stack of digital agriculture as they shorten supply chains and find ways to reallocate margin again to producers.

Wanting Forward at the four Cs: Consolidation, Massive Corporations, Collaboration & Conservation.

Consolidation: To put it bluntly, we have now had too many AgTech point solutions funded and we will anticipate to see many go away or get consolidated. We’ve got already seen this in AgFunder’s 2018 funding report the place AgTech M&A activity picked up considerably in 2017 and 2018. That is notably evidenced in the FarmTech phase with in-field hardware, sensor and imagery corporations nevertheless it goes for other AgTech classes similar to farm administration methods as nicely. We’ll possible see more consolidation in the future, and although not all the time blockbuster outcomes for buyers, an elevated degree of consolidation activity is usually a sign of a healthy ecosystem.

Massive Corporations: We’ve got began to see a few of the huge corporations, including know-how corporations, more and more step into the agriculture area and fill gaps in infrastructure and supply scalable options: from IBM on the climate, analytics and cloud infrastructure aspect; Amazon with AWS for Ag; Microsoft with its FarmBeats IoT answer; the huge corporations are paying more attention to this sector than they’ve and we will anticipate they may proceed.

It’s also value mentioning huge meals corporations like Costo (with its hen operation in Nebraska) or Walmart (with its dairy operation in Indiana) are making strikes upstream in the manufacturing chain. It is going to be fascinating to see if this development continues.

Collaboration: A key theme that I’ve seen over 4 years in this area is a recognition of the have to collaborate extra, whether that is between farmers or between massive corporations and startups. Maersk created the FoodTrack by Maersk accelerator program to collaborate more with and make investments in startups. We’ve additionally seen an fascinating pilot partnership between Conservis and Rabobank; corporations like Land O Lakes and Mars in search of exterior sustainable dairy options; the Pork Council reaching out with its Manure Management Problem; and the Sustainability Consortium displaying the worth of collaborative efforts. The identical may be stated inside the rising progress ecosystem where there is a realization among many who the one-stop-shop strategy is troublesome and pricey; to stay related, some startups are discovering value in partnerships and knowledge interoperability.

Conservation: Whether or not we call it conservation or sustainability, an plain theme is that it isn’t going away–and the European AgriFood scene is leading the charge in many ways. The Europeans have already started to make a basic mindshift to close the hole between agriculture and the remainder of society to see what might be carried out to improve the impression of meals manufacturing on the setting. The farming business needs to do extra to tell the tales of how farmers are appearing nearly as good stewards of the land, water and air, and the potential it has to do much more for the setting. It additionally needs to embrace new technologies that allow meals producers to supply the knowledge to quantify the sustainability advantages they’re producing, Land O’ Lakes’ Truterra Insights is an effective example.

I welcome your thoughts and reactions and sit up for following this exciting Agtech landscape together for the coming years.