Member Article

Idea 2 Scale launches AgTech report to map investor sentiment for scaling businesses

New research published by technology incubator Idea2scale and Agri-FoodTech venture capital firm AgFunder has revealed that Food & AgTech investors are most excited by startups in the Ag Biotechnology category.

The report details the results of an investor sentiment survey of 50 Food & AgTech venture capitalists globally to discover their preferences and hopes for 2020.

Ag Biotech is a wide-ranging category of agri-foodtech innovation encompassing all on-farm inputs for crop & animal agriculture including genetics, microbials, breeding and animal health. A key focus for startups in this category is to help farmers increase their yields in a more environmentally sustainable way and 58% of investors surveyed put Ag Biotech in their top 3.

The next most popular categories were Innovative Food (56%), which includes the ever-exciting alternative meat segment, and Farm Management Software, Sensing & IoT (46%). At the opposite end of the scale, 54% of investors said the Online Restaurants & Meal Kits category was the most overhyped.

Geographically, 57% of investors were most excited about the opportunity presented by Asia’s agri-foodtech startup industry, and India was flagged by 12% as having particular potential. Looking overseas, US investors are 10% more likely to invest internationally (66%) compared to their European counterparts (56%).

Investors indicated they were struggling with quality inbound deal flow, relying on warm intros (66%) rather than cold approaches. On average they invest in one company for every 78 deals they look at, citing ‘the team or lack of certain skills’ as the number one reason to pass on a deal.

The Food & AgTech Investor Sentiment Report coincides with the launch of Idea 2 Scale’s first industry-specific accelerator programme ’ The Field Academy.’

Danny O’ Brien - CEO and founder of Idea 2 Scale said: “Understanding the mindset of investors is intrinsically linked to predicting the direction of the industry itself and separating what’s overhyped from what’s garnering real interest.

“Although it’s a hugely exciting time for the Food & AgTech industry at large, this research has reaffirmed the need for businesses to ensure they are coming to investors with an ‘investor ready’ opportunity. Businesses must assess whether they’re clearly communicating their value proposition, have a clear route to market and have assembled the right skillset in order to stand out from the crowd. These are non-negotiables for securing investment.”

Louisa Burwood-Taylor - Head of Media & Research at AgFunder said: “While Ag Biotechnology has consistently been the best-funded upstream category across the food supply chain, it’s interesting to see that it continues to grab investor attention, especially in light of recent prohibitive regulatory decisions in Europe. What’s lesser known is that Innovative Food, the category including the trendier meat alternative segment, is still a very small part of the overall foodtech and agtech startup universe. With clear investor demand for more Innovative Food opportunities, including us at AgFunder with our New Carnivore Fund, it’s very likely investment will have increased dramatically in 2019.”

This was posted in Bdaily's Members' News section by Niall Moran .