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Agtech raises over $2.3bn in 2014

Agriculture technology companies raised the capital across 264 deals and with 271 unique investors, according to a new report from AgFunder, the fundraising platform.

Agriculture technology companies raised $2.36 billion in 2014 in a record-breaking year for the sector, according to AgFunder, the online fundraising platform.

The figure puts agtech funding ahead of cleantech, financial technology and security companies, which raised $2 billion, $2.2 billion and $2.3 billion respectively between October 1, 2013 and September 30, 2014, according to private investment data company Mattermark.

AgFunder’s Agtech Investing Report 2014: Year in Review features 264 deals across various subsectors of agtech including genomics, non-genetically modified organism crop technology, drones and agdata, protein substitutes and the disintermediation of traditional food retailers.

Some 271 unique investors committed to the sector with an average deal size of $9.7 million. Of those investors, 41 made more than one investment and the most active were “top tier Silicon Valley investors with a history in cleantech” including Khosla Ventures, Kleiner Perkins and Andreessen Horowitz, according to the report. Agtech-focused VC firm Cultivian Sandbox was another leading participant.

Precision agriculture – a group of technologies aimed at helping farmers use data analytics to improve their operations and decision-making process – accounted for 30 percent of the deal flow and emerged as an important subsector in the market; it raised 12 percent of investment capital.

Food technology companies, such as Hampton Creek, the company creating a plant-based egg, attracted “bullish bets”, including $113 million into Hampton Creek, and a $260 million investment in grocery delivery service Instacart.

AgFunder drew a fine line between agtech and consumer technologies. “While restaurant-to-customer food delivery may technically fall within the agriculture value chain, we ultimately felt that these services were unlikely to have a disruptive effect on other areas of the agriculture value chain,” reads the report.

Indoor agriculture was another subsector identified by AgFunder as one to watch after it received 7 percent of invested capital and attracted commitments from big players such as global private equity firm KKR, which invested $100 million into SunDrop Farms. Cannabis start-ups also fared well after 12 captured nearly $23 million in funding.

The big takeaway is that agriculture is being transformed by a confluence of new technologies drawn from many industries,” wrote AgFunder chief executive Rob Leclerc in the report. And the opportunity remaining is massive, he added.

“Agriculture is a $6.4 trillion global industry that employs 1.3 billion people worldwide and new technologies are emerging which are promising to transform agriculture from a calcified industry to a tech industry as it races against a growing population and middle class, changes in taste and diet, and faces its impact on the environment.”

Read Agtech Investing Report 2014: Year in Review for more in-depth analysis and a list of the year’s top deals.