VCs see fertile ground in agtech


Agriculture startups that have raised seed rounds, firms that employ robotics and big data tools, are blossoming into businesses sought after by later-stage investors.

Investment in the agtech space is up sharply this year, driven by a spike of rounds at Series B and later stages, according to Crunchbase data. Altogether, agtech startups raised more than $320 million in 2017 so far, a more than three-fold increase over the same period last year.

There’s no single investment theme attracting VCs. Rather, funding recipients are applying robotics, big data, genetic engineering and a host of other technologies to a range of agriculture use cases.

Take, for example, the three companies that harvested the largest rounds this year. They include Farmer’s Business Network, an online network where farmers share data and negotiate prices with suppliers, Calysta, a protein feedstock developer, and Inocucor, a fertilizer startup. (See our list of 2017 funding recipients here.)

Active venture investors in the ag space are also a diverse bunch. A host of smaller agriculture- and environment-focused funds, many relatively new, are putting capital to work. But so are big generalist funds. Crunchbase shows Google’s GV as having more agtech venture investments than anyone else.

“There’s a broader class of investors that’s gotten more comfortable with the space,” said Rob Leclerc, CEO of AgFunder, a marketplace for agtech startups. He attributes this, in part, to the emergence of more ag-focused seed- and early-stage investors over the past four years. These investors have helped build a pipeline of startups ready for larger venture rounds.

Agriculture entrepreneurs now have a choice of firms likely receptive to their pitches. The list includes seed-stage investors like The Yield Lab and Better Food Ventures, as well as firms focused on Series A and later rounds, such as Lewis and Clark Ventures and S2G Ventures. (See active agtech investor list here.)

Leclerc says the rise of “digital agtech” is also opening agriculture startups to a broader range of investors. Historically, it’s been more life science investors who’ve diversified into agriculture, applying investment expertise in genetics and biology to startups developing pesticides, fertilizers, feedstocks and crop varieties. But companies like Farmer’s Business Network (FBN), which pitches itself as a big data player, are appealing more to tech and generalist VCs. FBN’s latest round, for $40 million, was led by GV and impact investor DBL Partners.

Read the source article at TechCrunch.