Precision Agriculture (aka AgTech) will play a major role in meeting the increased demand for food driven by a growing population, increased urbanization and a growing consumption class. In our opinion, there will be emerging technology companies that will enable growers to collect and analyze real-time data to significantly improve crop yield while reducing the demands on our natural resources such as land and water.
Farmers long have determined crop health by visually examining a plant’s physical characteristics such as color and size, which could signal potential problems. It’s a subjective and time consuming process especially for large farms where the data could be weeks old. To improve critical business decisions, farmers, for example, could mount thermal imaging cameras on an unmanned aircraft or drone to collect real-time information for analysis.
Drones and thermal imaging cameras aren’t the only items that farmers will need to produce food more with less resources. Crop production is a complex business which require skills in biology, agronomy, mechanics and marketing. Data collection, the Internet-of-Things (IoT), Data Analytics, Cloud Storage, SaaS and a host of other technology often discussed in everyday life such as home monitoring, fitness lifestyle and automotives can play a major role throughout the entire crop production process including, soil preparation, planting, nutrient management, irrigation, drainage and harvest.
It’s not just the technology itself that will be subject to change. The very way we farm will change as well. Land resources suitable for farming is diminishing combined with consumer’s desires to eat healthier from locally sourced food will make way for new agriculture techniques. For example, vertical indoor farming and vertical aquaculture will enable us to produce more organic and non-GMO food per acre faster and closer to where it ultimately will be consumed.
PrecisionAg is in its infancy so there is plenty of time for entrepreneurs to create and/or identify disruptive technologies, which should interest investors. It’s not just in the crowdfunding arena but the venture capital community and corporations have shown an interest as well. In fact, Monsanto in October 2013 placed a huge bet in the space when it acquired a data sciences company founded by a team of software engineers and data scientists from Silicon Valley technology companies, including Google. The company called The Climate Corporation was purchased by Monsanto for $930 million.
According to AgFunder, $4.6 billion was invested in 526 deals by 672 different investors. The biggest chunk of that was $1.65 billion for food eCommerce, $673 million for irrigation and water, $383 million for drones and robotics, $305 million for bioenergy and $295 for decision support technology. In our opinion, funding for those sectors will continue to be dominated by traditional technology venture capitalist firms.