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Seed-Stage Deals Show Growing Diversity of Agtech Investments

Friday, February 10, 2017   (0 Comments)
Posted by: Kate Oesterle
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Xconomy Raleigh-Durham Fundraising is tough for startups but it’s particularly difficult in agriculture, a sector that has fewer firms focused on agtech investments. The dynamics are starting to change, though. A growing number of early-stage agtech startups are raising money and they’re pulling capital from a broader pool of sources, according to a new report from AgFunder, an online agtech investment marketplace.

Investors pumped $3.23 billion into the agriculture sector across 580 deals in 2016, the report shows. While the total dollars invested in 2016 decreased by nearly 30 percent year over year, the total number of deals increased by 10 percent. Furthermore, AgFunder’s figures show that the biggest increase in deal activity occurred at the seed-stage, suggesting growing investor interest in agriculture and food technologies.

AgFunder counts 14 active agtech funds valued at more than $850 million combined. Last year’s most active ag-focused venture fund was Washington, DC-based Crop Capital, an investor in nine deals. Because of the small number of funds focused on agtech, the sector relies on investors outside of agriculture, such as family offices and traditional venture capital expanding its scope to include agriculture, AgFunder says. As an example, AgFunder notes that GV, formerly known as Google Ventures, made five agtech and food investments, while Khosla Ventures and Kleiner Perkins, Caufield & Byers each made three investments in the sector.

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