Food is one of the pillars of the future of humanity. And the challenges that endanger food security are numerous: climate change is wreaking havoc on agriculture – with droughts and floods; geopolitical instability jeopardizes the continuity of supply chains and increases distribution costs.
Therefore, anything that involves sustainably increasing production, generating alternative and healthy food, or guaranteeing the distribution of food to meet the needs of the growing world population is, in addition to having a substantial social impact, big business.
Venture capital investors pumped $51.7 billion in financing into agrifood projects in 2021, which represented an impressive 85% increase over 2020, according to the 2022 AgFunder AgriFoodTech Investment Report. This includes ventures that combine agribusiness with cutting-edge technologies (including the segment known as FoodTech, which essentially focuses on food).
Deceleration and ascent
Although the macroeconomic instability of the last two years generated a slowdown, the market is expected to remain healthy throughout 2023. Among the focuses of interest are alternative proteins, one of the segments receiving the most investment. Beyond that, the attention is spread across practically all the items that comprise the AgTech and FoodTech segments.
The combination of technologies such as automation, artificial intelligence, the internet of things, geolocation, and drones, to name just a few, are crucial to alleviating the problem: among other things, they help to increase yields, reduce carbon dioxide emissions, anticipate natural phenomena and act accordingly, reproduce the environmental conditions required for a given crop in an “artificial” space or mitigate waste.
Sowing to grow the business
What is the importance of having a technology partner in this process in which the AgTech is evaluated for investment or has just obtained an investment?
The paths are multiple. When it comes to an initial investment, the partner can help AgTech reach new levels of efficiency, productivity, and competitiveness, leveraging data to reduce costs, improve customer experience, anticipate scenarios, comply with regulatory requirements, or even develop new business models and new revenue streams.
This means that the contribution of the technology partner has a direct impact on what VCs are most attracted to: the market value of the company.
In the specific case of Making Sense, we start the journey with a discovery: a diagnostic assessment conducted by experts in technology, business, and design to think about the organization from a future perspective. This is combined with insights and trends about the AgTech sector, with the client’s own view of the business and an analysis of the VC’s specific interests.
Benefits for all parties
The benefit goes both ways: AgTech is secure that its value is being maximized, and the VC can be assured that the company they are interested in is doing everything it can to grow solidly and sustainably to position itself as innovative and cutting-edge in the market—a real win-win.
But the technology partner can also play a key role when it is an established company with solid business plans. In this case, it is about optimizing the use of the investment, generating growth plans, deploying digital platforms that allow multiplying revenues, or leveraging research and development processes.
VCs are paying close attention to AgTech. And we can help you quickly reap the results of your project.
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