In 2018, AgTech was maturing, with underlying technologies improving and investors gaining a better understanding of the sector. 2019 should bring with it a series of trends that were already underway last year but will now gain more traction, according to Agri Investor and Finistere Ventures’ latest AgTech investment report.
Here are 3 predictions for AgTech in 2019.
1. The rise of Ag biotech
Companies in this segment are mostly dedicated to developing genetic alteration technologies, with the purpose of making crops more disease-resistant, more fertile, and with higher nutritional content. Examples of this are Indigo, which creates seed treatments, and PivotBio, which developed a microbe that produces nitrogen.
According to Finistere Ventures’ report, these companies received the most investment last year, with the average deal at $25.2M.
In 2019, this AgTech segment should continue to grow, according to Agri Investor, which predicts that genetically altered foods will soon be consumed at scale in the USA. It will probably take longer for Europe, due to the EU’s “skepticism.”
By 2026, the global ag biotech market should be valued at $51.93B, according to Market Watch.
2. AgTech adoption in developing countries
According to FAO, smallholder farmers grow up to 80% of food in Asia and sub-Saharan Africa. But their lack of access to knowledge and resources has made it harder for them to keep up with the competition that globalization has brought. According to Agri Investor, that may be about to change.
In the past few years, Internet access and smartphone usage in developing countries have been rapidly growing – in 2018, 64% of the populations in these countries reported using at least one regularly.
So it’s not a surprise that recently, there’s been quite a bit of activity in the AgTech sector in Africa and Asia. The Bill and Melinda Gates Foundation signed a deal with the EU to invest over $600M in agricultural innovation in African and South Asian countries. Some even talk about “Africa’s AgTech wave.”
So it seems like 2019 might be the year when farmers in developing countries widely adopt AgTech solutions.
3. The turning point for farming software?
Even though tech giants like Amazon, Microsoft and IBM have invested in AgTech, “we have yet to see major advances in building an ecosystem for agriculture,” says expert Axel Wehr over at Agri Investor. That is: while areas like smart homes and self-driving cars are “shaking up the household appliance and automotive industries,” the same level of disruption hasn’t happened in the farming software and precision farming landscape.
This is due to these sectors being “full of promise, but still fragmented, lacking in interoperability and too dependent on industry incumbents,” which are traditionally more averse to innovation.
So the question is – will 2019 be the year when farming software and precision ag cross the frontier into the same level of disruption of other tech industries?
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