Agtech deals reached an all-time high in 2019

Agrifood venture pioneer Finistere Ventures released its ”2020 Finistere Ag and Foodtech Report,” which found that agtech deals continued to climb and reached an all-time high in 2019, while later-stage VC valuations across the agtech and foodtech ecosystem rose dramatically.

$ 2.8 billion across more than 300 deals

Venture capital investment in agtech startups totaled $ 2.8 billion across more than 300 deals around the globe in 2019. In contrast, foodtech investment decreased significantly in 2019 – down to $ 6.7 billion from its high of nearly $ 9 billion in 2018.

Investment in mainstays like digital ag beginning to drop

“The flow of money is shifting as the market matures. While more money pours into advanced crop protection technologies, indoor farming, alternative proteins, ingredient refinement, and supply chain advances, investment in mainstays like digital ag is beginning to drop as leaders start to emerge,” said Arama Kukutai, co-founder and partner at Finistere Ventures. “Likewise, those investment reallocations will help drive a healthier, more sustainable food and ag ecosystem where fundamental value has to be demonstrated.”

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Drones demonstrate seeding in a rice paddy near a local agriculture technology center in Busan, South Korea. Investments in technologies like these increase, while less money is going to digital ag. – Photo: EPA

The report provides in-depth analysis of global financing activity across the agtech and foodtech industries, a breakdown of regional variations, an evaluation of the investor universe, a ranking of top startups across the agtech and foodtech ecosystems, and an infographic of top 2019 trends and takeaways.

Key agtech findings include:

• Continued maturation of the agtech investment sector with increasing capital deployment in later-stage companies and bigger valuations as startups start to scale
• From a global perspective, while the United States continues to take the leadership role in agtech investments, Europe is closing the gap and doubled capital deployed into agtech deals in comparison to 2018 – ending the year at $ 1.2 billion
• Reaching a high of $ 887 million in 2019, crop inputs continued to be the leading segment in agtech investment
• Precision ag investment continued to fall since its peak in 2016 with an expected shakeout ahead as best-of-breed innovators position themselves to claim leadership positions through consolidation and showing market adoption
• With longer lifecycle investments, plant sciences investments dropped 20 percent from 2018 but will likely climb again in years ahead given the need for pipeline by Ag majors
• Capital deployed into later stage venture financings increased by 50 percent, while exits remained anemic, with only eight ventured-backed exits in agtech and 16 M&A transactions in 2019