Fresh Takes on the Farm of the Future
Enabled by research and technology, every region of the world has experienced a rise in agricultural productivity over the last decade. From U.S. cover crop acreage rising 50 percent over the last 5 years to the agricultural robotics market reaching $3.4B in 2018, farmers are employing practices that conserve resources, increase yields and ultimately improve margins. In more ways than one, the future of farming is looking bright green.
Global investments in agricultural technologies
Deal sizes are increasing as investors learn more about the space and place bigger bets on which innovations will carry farmers forward. Ag Biotechnology came out on top in terms of total investment, according to the same Agfunder report, due in part to a $250M raise by microbial crop inputs startup and agriculture unicorns, Indigo Ag. We’re seeing this mirrored through our own Rabobank startup innovation network, with biotech applications to FoodBytes! tripling from 2016 to 2019. From microbiome modification to bacteriophage production, these companies are utilizing cutting-edge technologies to improve crop yield, for pest management and animal health. Although still ranked by the report as one of the trailing categories, Farm Robotics is another area that saw increased interest from investors. And understandably so – total investment grew 56 percent year over year “as an increasing number of entrepreneurs turned their attention to automation processes on the farm,” according to Agfunder. In fact, our six ag robotics alumni raised as much capital in 2019 as they did in the previous 5 years combined!
The FoodBytes! platform emboldens entrepreneurs working at the fringes of food and agriculture innovation, bringing to light new technologies that could lead the charge into the future of farming. Startups in our periphery are paying attention to precision agriculture, with 50 percent of upstream agriculture applications to FoodBytes! Chicago falling into this category. Other burgeoning areas of innovation include biotech, novel farming systems and agribusiness marketplaces. Let’s dig in to the visionaries pioneering these agtech subsectors below.
Biotech: pheromone pest control, animal health innovation and more
Ag Biotechnology is a hot topic in the investment world, according to a report by Finistere Ventures, attracting more dollars than most other agtech segments. The category includes new breeding technologies, which Rabobank’s food and agribusiness research team reported on last year. According to the RaboResearch report, emerging techniques include CRISPR technology, which “allows for faster and more precise breeding.” Upcoming FoodBytes! Chicago pitch company, Spira, has modified the technology to enhance the flavor profile of spirulina as an ingredient, allowing food companies to incorporate the superfood into their products without sacrificing taste. Biotech alum, Pheronym, is utilizing pheromones from microscopic worms that repel and disperse them from mating as a method of pest control for farmers, reducing the need for chemical alternatives. Additionally, alum Biome Makers sequences microbiome DNA to understand and create the ideal growing conditions for each crop, decreasing chemical use and improving yield. Offering applications in animal health, alum Pure Cultures is developing natural probiotics, and upcoming pitch company Cytophage Technologies is producing infection-fighting bacteriophages, both providing solutions to antibiotic overuse.
Watch FoodBytes! alum Biome Makers pitch:
Precision Ag: on-farm sensors and robotics pave the way
Farmers are facing increasing pressure on margins for a variety of crops, and many have turned to technology to assist in optimizing and reducing overall resource and labor requirements. In addition to cost savings, many of the same techniques can be used to minimize the environmental impacts of food production and fight climate change. Out of a slew of emerging precision ag solutions, FoodBytes! alumni are pioneering applications in on-farm sensors and robotics. Alum Nectar offers a platform to assist beekeepers in apiary management, utilizing health data collected from sensors and processed by artificial intelligence. With a third of food produced dependent on pollination, this data is valuable in providing cost-effective crop pollination services from a healthy, productive hive. Similarly, BeeHero measures pollination quality in real-time, allowing beekeepers to optimize hive deployment for a range of crops. A widely popular application of farm sensors is in soil mapping, which allow farmers to maintain the integrity of their land while making more transparent the ideal growing conditions for each acre of the farm. In fact, in a study of Nebraska farmers, 98 percent had installed some form of precision ag for soil sampling. Alum FarmX has developed a satellite image processing software, enabled by machine learning to help growers improve resource efficiency and sustainability. In the category of robotics, alum Augean Robotics built Burro, a robot that follows workers and transports produce autonomously, and alum Earth Rover adapted space technology for the farm to automate intensive processes including scouting, weeding and selective harvesting.
Watch FoodBytes! alum Earth Rover pitch:
Novel Farming Systems: sustainable aquaculture development on the rise
Technological advances have enabled entrepreneurs to develop more sustainable ways of producing long-cultivated foods. In a RaboResearch report, “Vertical farming flourishes, ” our analysts cite indoor farming as one of the most attractive areas for investment in the space. Although high production cost remains a barrier for many crops, advantages over conventional farming include proximity to the consumer, low supply volatility and high premiums for specialty crops. Alum Verdical gives foodservice providers year round access to fresh ingredients via modular indoor growing systems, and alum neoFarms provides an automated aeroponic system in the form of a fridge for household and professional kitchens. There is also a surge of interest in aquaculture as one of the fastest-growing novel farming systems. FoodBytes! Chicago pitch company, LocalCoho, is playing its hand in the technology by producing salmon via Recirculating Aquaculture System (RAS), which conserves water and space, using bio filtration to reduce toxicity. Additionally, alum Osmo Systems built an affordable aquaculture water quality sensor to help boost the survival and overall health of fish or shrimp.
Watch FoodBytes! alum Osmo Systems pitch:
Agribusiness Marketplaces: direct to consumer, B2B and everything in between
According to AgFunder, agribusiness marketplaces ranked 4th largest in terms of total investment, but 8th in terms of median deal size. The market has yet to mature, so we are seeing many new entrants, with related companies comprising 36 percent of total AgTech applications for FoodBytes! Chicago. One of our first alumni, Imperfect Produce, discovered a space in second hand markets, selling produce that was rejected by retail stores due to cosmetic reasons directly to consumers at a significant discount. Another alum, RethinkResource, runs a similar operation for B2B sales of byproducts and waste streams. On the marketplace analysis front, Chicago pitch company SeedLinked provides seed varietal and planting recommendations to growers based on current market demand and their own planting capabilities and needs for regenerative soil health. Within the agribusiness marketplace sector, technology-enabled trading is picking up a lot of steam. Alum Binkabi offers one such platform for low-cost, decentralized commodities trading on the blockchain, also enabling peer to peer lending in emerging markets.
Watch FoodBytes! alum Binkabi pitch:
Want to geek out on more Agtech insights? Check out these RaboResearch reports:
With 6 of our 15 upcoming pitch companies working in on-farm production, it’s clear that new upstream technologies and solutions are paving the way for innovation. Which pitch company are you most interested in seeing pitch onstage? Let us know in the comments below and attend in-person to vote for People’s Choice award!