AgTech Opportunities Abound
Agtech, the new ‘it’ industry
AgTech is the industry to be working in, according to Sarah Nolet, founder of AgThentic, our speaker for April at Australian agriculture: Ignored by tech no longer?.
“There is no better place for agrifood tech than Australia,” she said.
Agriculture is in the middle of major shifts: increasing demands for food, changing consumer preferences, becoming more digitised (it is the least-digitised industry according to McKinsey), disruption across the entire supply chain from biotech to transport to how people grow (indoor vertical gardens and in warehouses sans sunlight and soil), purchase and cook food. And even a redefinition of what traditional foods are; for example, there are a number of insect protein businesses expanding their reach (https://goterra.com.au/, http://betahatch.com, http://protix.eu/).
Opportunities and disruption
Sarah asked “What does this mean for startups and entrepreneurs?”
And said “Huge opportunities for disruption.”
With a growing focus worldwide on business doing good and doing well, there are huge opportunities across the value chain for embracing sustainable and socially-responsible practices.
An interesting point was that big corporate food producers are being disrupted by small players as consumers want hand-picked, hand-mixed and a personal touch.
Investors are taking notice
AgTech has seen its first unicorns too with the purchase of a data company, Climate Corporation, by Monsanto and Becker Underwood by BASF (the world’s largest chemicals maker). And the investment market is opening up, according to Sarah who showed this graph showing the growth in investor and dollars from AgFunder, “the world’s largest food and agriculture technology investment platform with over 50,000 members and subscribers” (according to their website).
Sarah referred to the quote: “Big Food is under attack from Startup Granola.” from the Fortune 2015 Special Report: The War on Big.
5 big myths
There are five agtech myths that Sarah wanted tackle:
- It’s really hard to innovate in AgTech.
- AgTech is easy, it’s just like other industries. Sarah discussed that there is an element of conservatism in agriculture and also that there is a disconnect between what investors want to see agtech startups focusing on (sexy things like robotics and Artificial Intelligence) versus what customers want to see (for example, moving from paper records to digital records).
- Farmers aren’t online.
- And on the flipside, ALL farmers are online. In Australia only 34% of farmers have full coverage on their farms.
- The low-hanging fruit has been picked. Sarah is very adamant that this is not the case; opportunities abound.
The connectivity to the internet opened up a conversation among attendees about issues with warranties (where if connectivity drops out, warranties are voided) and the challenges of agtech companies offering reliable services. This is definitely a challenge in Australia and something that companies need to work hard to manage effectively. Despite the hype, things like precision agriculture are only just starting to get mainstream. With greater connectivity, this will further open up.
Check out this slide for where different agriculture technologies are currently placed on the Gartner Hype Cycle:
Connecting city and rural
There were questions from the audience about how to get involved in agtech, particularly as we were sitting right in the middle of North Sydney. And an interesting discussion unfolded about a lack of empathy that can occur between people in cities, developing and pushing technology, and the farmers. Sarah said that segmenting the market very carefully is an important approach to find the right farmers to build solutions for them.
Sarah recommended that to start off working in agtech you don’t need to be from an agriculture background, you just need to have an interest. Three steps she recommended:
- Understand the problems that are happening in the industry. Reach out to other people working in agtech. Think about helping an agtech startup, even offering to write blog posts for them; you’re guaranteed to learn a lot.
- Or go stay at a farmstay and rather than be a tourist, offer to pick up a shovel and help.
- Find farmers, perhaps through friends as everyone knows someone on a farm, and get in touch with them to ask if you can meet with them, bring them pizza and beer, and chat about their business and their challenges. Make sure you tell them you’re not selling anything.
- If you’re targeting a particular area, contact the local council to see if they can connect you with producers or local farmer organisations.
Find out more
Missed the event? Check out the recording from the event on Facebook.
Want to find out more? Sarah recommended:
- A Guide to Startup Resources for Agriculture and Food Technology Innovation (by AgThentic with support from AgFunder and AgInnovation Development Group)
- Accelerators and other events and pitch prizes here in Australia:
Claire Harris is the Marketing and Communication Manager (part-time) for North Sydney Innovation Network. She is also a consultant with her business (Innovate Communicate) where she specialises in helping innovators and science organisations to connect with their audiences. She also launched an online hub (Recover from Injury) after a tough injury experience and is writing a book.