The past five years have been remarkable for the US Agritech sector due to high technology adoption that attracted wide-scale startup activities and huge investments. The exceptional interest shown by investors like the investment arm of Alexandria real estate resulted in an explosive growth of the Agrifoodtech that includes various farm-related industries. Although agriculture is as old as the hills, the U.S. agriculture sector is much more than farm business only. In the U.S., agriculture has a broader connotation and includes food manufacturing and foodservice.
Agriculture is a significant contributor to the U.S. economy. As of 2019, the contribution of agriculture, food, and related industries to the GDP amounted to $1,109, which translates into 5.2% of GDP (Gross Domestic Product). As the average American household spends 13% of their budget on food, the growth of the food sector, namely Agrifoodtech, seems to be quite evident.
Alexandria real estate explains the reasons for the Agritech boom
The trends of global population growth indicate that there will be a massive stress on agricultural resources by 2050. By that time, the world population will be 9.7 billion that will push up the demand for high-value animal protein food many more times. Simultaneously, urbanization will shrink the available land for agriculture that would lead to scarcity of natural resources. Added are the effects of climate change that could trigger natural disasters like floods and prolonged droughts and dry spells. These factors could hit the agricultural sector very hard due to loss or damage of crop and livestock production.
Experts felt that the most important action plan to counter the threats was to increase agricultural productivity by putting in place an agricultural system resilient to the climate. In recent years, more technology experts and entrepreneurs joined the agritech. Meanwhile, the traditional approach of the food industry started transforming. The impending crisis created new opportunities for investments, and startups and investors showed great interest in participating in the upgrade of the agricultural system.
Boom time for investors in the agrifood sector
Institutional investors like Alexandria real estate equities Inc are having a field day as the boom in agritech continues with signs of continuing for many more years. The company has been investing in the agricultural sector over the past years since 2000, with a focus on climate-innovative companies. But now, the company is putting in more money to meet the target of doubling the investment activity during this year. The strategic move of the company will help to identify top investment opportunities in agritech. Going ahead, the company can channelize the funds through Alexandria VA real estate to assist in building next-gen agrifood companies.
The rush of investments to continue
According to Crunchbase data, in the last two years, venture capitalists have out in $4 billion in startups, and the trend of high investment will continue through 2022. There are high chances of more money flowing into this sector. Investors gain confidence from the fact that fund managers of the food and agricultural sector have under them assets worth $130 billion.
New investments
It has been a busy year for the agritech innovation startups as it drew big and small investments to maintain the trend that began more than 5 years ago. One of the biggest investments of $250 million by way of Series F funding in August went to Farmers Business Network. The California- based company pioneered the e-commerce models for farmers by helping them find demand for supply.
Pivot Bio, the Berkley-based company, went for a $100 million way back in April to scale its microbial nitrogen technology. According to the company, the technology boosts crop yields that translate into higher revenues for farmers.
In July, Geltor, a biodesign startup, raised $91.3 million in Series B to make elastin and collagen from non-animal sources. The company’s products go to the food and beverage and beauty industry.
Alexandria real estate has been at the heart of the agritech ecosystem, and its portfolio includes Bear Flag Robotics, Vindara, Green Light Biosciences, Inari, and Invaio Sciences.
