AgFunder, an investment platform for accredited investors investing in agriculture and agriculture technology, announced the release of its 2015 Midyear AgTech Investing Report, tracking a record $2.06B in AgTech investment for the first half of 2015. This figure is only $300M shy of the $2.36B of investment for all of last year.
In the first quarter, total investment climbed 132% year-over-year to $1.08B, and in the second quarter, investment totaled $971M, representing a 133% increase year-over-year. There were 129 deals in Q1, and 99 deals in Q2.
Rob Leclerc, AgFunder CEO and CoFounder, shared:
“The AgTech industry had such a strong year in 2014, particularly in Q4, that we wondered whether investment would keep pace in 2015. So far, 2015 has beat expectations. Investors seem to been encouraged by long-term sector fundamentals, and in the private markets, this uptick in activity reflects the fact that agtech has been reaching more mainstream investors.”
The Midyear AgTech Investing Report compiled data from press releases, SEC filings, direct sources, and CrunchBase to provide an overview of major industry trends, along with information on all AgTech deals and investors in 2015.
Here are some of the highlights:
- Record Investors Enter Sector:
More investors participated in deals in the first half of 2015 than in all of 2014. In H1, two hundred and eighty investors invested in one or more deals (versus 271 in 2014), with 14% making two or more investments. Agtech investors included a global group of dedicated agriculture funds, generalist VCs, PE funds, accelerators, and angel investors; a number of these investors made their first agtech investments.
- Water Tech Sector Big Winner:
In the first half of 2015, twenty six percent of all investment ($525M) went into water technologies. Israeli drip irrigation provider Netafim accounted for the majority of that total with it’s $500M debt financing in Q1, while smaller startups like CropX ($9M), Hortau ($5M), and PowWow Energy ($3M) got off the ground.
- Precision Agriculture Attracted Some of the Largest Deals:
Last year, $276M was invested into precision agriculture solutions. Midway through this year, that number has almost reached $400M. Large investments were made in satellite imagery company Planet Labs ($118M), and drone makers DJI ($75M), 3D Robotics ($64M) and Pulse AeroSpace ($23M). Following these deals, 2015 has already seen a healthy pipeline of precision ag deals with 22 Seed deals and 20 Series A deals.
- Food Ecommerce Largest Subsector:
Food ecommerce businesses are bringing much needed innovation to the supply chain, and total capital invested in the sector reached $551M. Large, later stage investments were made in companies like BlueApron ($135M), Munchery ($85M), Sprig ($45M) and NatureBox ($30). We observed an increasing number of international me-too companies crop up, like Indian grocery delivery services PepperTap ($11.2M) and Grofers ($35M). We’ll be looking at this space to see whether there are flame outs and whether the margins support long term growth in the sector.
- Gap in Seed Funding:
When we look at Series A-C rounds, funding rounds are inline with the tech VC market. In Q1 and Q2, for example, the median funding size was $4.3M for Series A, $11M for Series B, and $20M for a Series C. However, we have seen a gap in seed fundings. The median deal size for a seed stage deal was just $250,000 versus approximately $1.4 for the tech VC industry, and points to a potential need for more money coming in at the earlier stage.