Sovereign funds and asset managers represented a growing share of the 702 investors that committed to early-stage start-ups in the sector in H1 2017, according to AgFunder.
Early-stage investing in agrifood tech is showing signs of maturing, with a growing pot of money going toward more established businesses as seed investing trends downward.
In its half-yearly fundraising update, investment platform AgFunder noted that Series A funding for agrifood ventures reached a record $660 million in H1 2017. Overall, the sector raised $4.4 billion, putting it on track to hit its $8.3 billion 2015 record.
As a counterpoint, deal count dropped 27 percent year-on-year to 369, hinting that the half-yearly performance partly relies on a handful of large deals. AgFunder singled out the $1 billion Series H fundraise of ele.me, China’s largest restaurant marketplace, as the period’s single unicorn.
But the shrinking number of transactions owes much to the relative decline of seed funding, where deal count was down 37 percent. The number of Series A and B deals barely budged; Series D deals increased in average size.
“This decline in seed-stage deals could be attributed to investor fatigue at ‘me-too’ companies across agrifood tech,” the report noted. “While there are still significant greenfield opportunities, much of the lean low-hanging fruit may have been picked clean. Investors are going to have to get comfortable with larger seed investment rounds for opportunities that require more go-to-market capital.”
There was some novelty when looking at the geography of agrifood funding. While the US continues to dominate, Asia saw a number of deals, largely centered around food delivery. Australia benefitted from the rise of accelerators, helping it climb to the top five most active countries.
But perhaps the greatest change occurred further upstream. While Silicon Valley venture funds still account for the lion’s share of investors committing to agrifood tech, AgFunder finds that state funds like Singapore’s Temasek and the UAE’s Meraas account for a growing share of sponsors; so do private equity funds and asset managers, with ADM Capital and Alliance Bernstein cited as active this half-year.
The period’s tally of 702 unique investors even included one pension fund: the Municipal Employee Retirement System of Michigan, which took part in the $40 million Series D funding of California-based fish and livestock feed business Calysta.
Nine agrifood tech corporate funds also made their mark in H1, including Monsanto Growth Ventures, Syngenta Ventures, BASF Venture Capital, Acre Venture Partners, Cargill, Tate & Lyle Ventures and Taylor Farms Ventures. Corporate players from outside the field also took part, including Bosch, which invested in Australian startup The Yield.