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AgFunder Reports Record $4.6 Billion of Investment in AgTech Sector for 2015

Feb 23, 2016

From AgFunder

 

Overview

Momentum in the agtech investment market gathered pace in H2 taking total fundraising volumes for 2015 to $4.6 billion across 527 deals. This doubled the $2.06 billion raised across 228 deals in H1.

Another record-breaking year for agtech investment, 2015 saw increasing diversity of investors active in the sector, but also diversity in the technologies coming to the fore. High profile investors making bets in the space included Google Ventures, the Bill & Melinda Gates Foundation, and Kleiner Perkins Caufield & Byers, among other generalist VC firms. The amount of investment from agtech-focused VCs also increased as new players focusing on this growing segment launched funds.

Technologies facing consumers rapidly picked up pace as food e-commerce startups raised $1.65 billion alone. Alternative protein companies attracted some large bets while drones & robotics and support tech startups continued to mature. Biological inputs companies also picked up more investment in 2015 as the efficacy of their products is increasingly proved.

AgFunder, the leading agriculture-focused online investment platform, reported a record $4.6 billion of investment into the agriculture technologies sector for 2015[1], almost double the $2.36 billion invested in 2014, and outpacing growth in the broader venture capital market. 

Over the past five years, global investment in the agtech sector has markedly accelerated from barely $500 million in 2012 to approaching $5 billion as entrepreneurs and investors look to tackle production and sustainability issues facing the farming sector. 

"Mid-year we projected the agtech sector would end with $4.1 billion; the extra half billion surpassed expectations," says Rob Leclerc, CEO of AgFunder. "Food e-commerce accounted for a large portion of the topline number. That aside, there was healthy investment diversity across the agriculture value chain. Given that agriculture accounts for approximately 10% of global GDP, we still see a lot of room for development in the sector, particularly as investors look for value outside traditional tech markets, which many fear are in a bubble." 

Last year alone, 499 companies raised financing across 526 deals, a 90% increase in deals over the 264 recorded in 2014. Agriculture-focused venture capital firms and strategics led investment activity, which included over 600 unique investors. They were joined by a mix of angel investors, generalist venture capital players, family offices, private equity firms, and impact investors. 

Companies in the food e-commerce, irrigation & water, and drones & robotics subsectors drove activity in 2015, accounting for 60% of total investment dollars. This was a departure from 2014, when startup investment was more heavily weighted toward bioenergy, soil & crop technology, and sustainable protein. It reflected a shift in global investor preference toward bets on 'Uberfied' technologies and technologies disrupting the food chain close to the consumer. 

The year also saw greater geographical diversity in agtech innovation and investment. Companies based in the United States raised just over half of agtech's total funding, down from 90% in 2014. In part, this may represent better reporting on international deals, but innovation continues to develop in markets such as Israel, which ranked second in total investment ($550m), closely followed by the large emerging markets of India and China, which took third ($506m) and fourth ($480m) positions respectively in our geographical rankings. 

For detailed analysis, read our AgTech Investing Report 2015: 
https://agfunder.com/reports/agtech-investing-report-2015.