Research & Data

Agtech sees rise in venture capital investment

Recent data from PricewaterhouseCoopers shows that precision agriculture and biologicals are agtech’s most promising venture capital opportunities.

-
PriceWaterhouseCoopers -iStock

Recent research published by PricewaterhouseCoopers on the popularity of clean tech, including agtech, as a venture capital investment, has shown biologicals and precision agriculture to be two sectors driving agtech’s growth.

The agriculture and bioproduct subsectors have enjoyed a 939 percent increase in investment compared to Q1 2013, totalling $135 million. Of investment into the cleantech sector as a whole, these subsectors represent 38 percent of funding.

Voices in the investment community support this recent data. “We have seen an increasing number of agricultural investments in recent years and expect this to continue,” said Phillip Hasler, investment director at Emerald Technology Ventures.

“The need to produce more food on decreasing land resources, the emerging co-existence of food production with biomass for energy or chemicals production, and the convergence of AG technologies with industrial innovations such as mobile computing makes agriculture an attractive investment theme,” he added.

This upward trend isn’t one of certainty. “In agriculture, there are some high profile dedicated agriculture funds,” he told Agri Investor. “Their domain expertise allows them to identify market needs early and balance the risks by building diversified AG portfolios. Partnering with complementary industrial technology funds is seen as an opportunity, I would however expect that pure generalist funds would retract from the market.”

Other data sources echo this. Q1 2014 data released by i3 shows that food and agriculture asset investments, encompassing agtech, attracted $203 million, a five year peak for the asset class. Of the deals, 59 percent were early stage, showing venture capitalists to be more impressed with agtech projects potential in their initial stages.

2014 has seen some major agtech investments. In May, Khosla Ventures and Otter Capital co-invested $15 million into BioConsortia, a biotech company. BrightFarms closed its Series B round with commitments totalling $7.4 million, led by WP Global Partners LLC.