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C.O.NXT ON WHY FARM TECH COMPANIES RECEIVED MORE INVESTMENT THAN FOOD TECH IN 2020
Source: blog by Mark Gale, Chief Growth Officer, C.O.nxt

For the first time in many years, companies with technology centered on food production at the farm level gained more attention than those at the other end of the food chain. In 2020, upstream technology ventures-those closest to the farm-brought in $15.8 billion across 1,950 deals compared to downstream investments totaling $14.3 billion across 1,142 deals.

"What is exciting about the performance of the upstream side of agrifoodtech is that it signifies investors' growing confidence with the food and agriculture industry's tech transition," says Jessica Pothering with the AgFunder Network. "The technologies closest to the farm tend to be more capital intensive and difficult to test; they also take longer to get to market and secure uptake than their software-heavy downstream peers."

Investments in technology such as farm robotics, novel farming systems and innovative food products were thought to be too risky. Today general agtech investors are flocking to that technology.

What's more interesting is how agtech is redefining what is considered "on the farm", as the idyllic red barn image is being replaced by global positioning systems, sensors that track internal animal temperatures, hydroponic indoor growing technology, remote sensors, drone imaging and other advanced technologies. Investment into innovative food technologies was the third most-funded category in 2020. By the end of June, investments in this category had already surpassed all of 2019 investments.

Most of that investment went to one company: Impossible Foods, which gathered a half billion-dollar investment in March. Memphis Meats, Nature's Fynd, Good Catch and other alternative meat and dairy companies received significant investments.

This trend toward farm-focused investments is part of continued burgeoning interest in agtech investments. While data is still being analyzed, according to AgFunder's 2021 AgriFoodTech Investment Report, agtech investment in 2020 is expected to hit $30.5 billion, a 34.5% increase over 2019 investments.

To read the entire report click here.


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