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AgFunder Releases 2018 AgriFood Tech Investing Report
As we look back on 2018, a recent report released by AgFunder details another record-breaking year in food tech and ag tech start-up investments globally. The 2018 AgriFood Tech Investing Report says investments increased 43% year-over-year to nearly $17 billion.
Deal activity also saw an uptick (11%). There was also growth at the earlier stages, reversing the decline seen in 2017, as both seed stage deal activity (+14.5%) and funding levels (+50%) increased.
Below are eight key insights from the report:
- The industry is maturing. Deal sizes increased, particularly at the later stages. The average for Series D rounds was an impressive $73 million, which is above the cross-industry average of $50 million.
- There is more global diversity. While the U.S. is still dominating (46% of total funding; 40% deal count), the industry is getting more global as new markets come online. In fact, India, Brazil, and China produced the year’s largest deals. China was particularly active in the robotic retail and online marketplaces. The report says this also indicates the presence of a diverse range of investors.
- Robotics and automation are gaining momentum. On the farm, in the supply chain, and at the retail level, start-ups automating menial tasks across the industry gained traction amid growing concerns around labor shortages.
- Gene-editing start-ups drive ag biotech. Investments in gene editing drove much of the 50% increase in Ag Biotech, which reached $1.5 billion. Businesses focused on microbial products also saw a substantial bump, due mostly to Indigo’s $250 million Series E funding round.
- Restaurant marketplaces and eGrocery bring in most amount of funding. This was due to some very large, late-stage deals but also a 30% increase in the number of deals. This indicates the creation of new companies in the category, despite the wealth of options on the market and the geographical dominance of some services. Consumer demand for convenience and on-demand is apparent across the globe.
- Agribusiness marketplaces are a global phenomenon. As start-ups work to connect farmers to buyers and improve their chances of getting higher prices for their crops and access to better farming products and services, this segment has gained momentum.
- Innovative Food saw an increase in deals. While alternative meat and dairy is still a small category, the number of deals increased (to 70 from 57) as more entrepreneurs focus on new food formats. The trailblazers in this category are starting to mature, and raising large rounds.
- 2018 saw the largest exit, as well as an increase in mergers and acquisitions. After private equity group BC Partners sold digital animal health business Antelliq to Merck for $2.4 billion, 2018 will go down as the year that saw the largest exit on record. Overall, the pace of mergers and acquisitions increased during the year.