Global Agtech Investments Rebound in 2024 as Investors Turn to Climate Solutions
Global agtech investments faced a significant setback in 2023, experiencing a decline in funding. However, industry experts are optimistic about the coming year, highlighting the reasons for a potential rebound. Fiona Choppe-Magal, Partner at Cukierman Investment House, notes that more risk-averse investors are now prioritizing fundamentals and short-term profitability. This cautious approach has led investors to bolster their existing portfolios instead of seeking new opportunities.
In addition, the agrifoodtech sector has expanded its scope to include climate solutions. Many investors now view agrifoodtech as part of the wider climate space. Conferences and events are increasingly bringing together founders and investors from various industries, such as food and agriculture, energy, carbon, materials, and transport. This convergence between agtech and the climate space aligns with the growing investment in climate solutions.
Agriculture is a significant contributor to global greenhouse gas emissions, making it crucial to find sustainable and environmentally friendly solutions. Choppe-Magal emphasizes the flourishing agritech ecosystem, with startups worldwide developing innovative solutions to improve the sustainability, environmental impact, and animal welfare of our food supply.
One of the trends attracting investor attention is the integration of artificial intelligence (AI) in agricultural biotechnology. AI, genetic algorithms, and machine learning techniques like CRISPR are facilitating the development of new crops with improved nutrition, disease resistance, and higher yields. Additionally, eco-friendly solutions such as biofertilizers, bioherbicides, and biopesticides are gaining traction.
Water scarcity is another pressing issue in agriculture, as the sector currently utilizes 70% of the planet’s freshwater resources. Startups focused on addressing water scarcity challenges are catching the eye of investors. Technologies like greywater recycling, rainwater harvesting, water pollutant treatment, and seawater intrusion prevention are being developed to optimize water usage in agriculture. Smart irrigation systems and alternative crop varieties resilient to drought are also promising solutions.
Addressing global food waste is another area where advancements in AI and data analytics are making a significant impact. AI enables more precise inventory management in the grocery sector, reducing the occurrence of expired products and minimizing waste. With over 1.7 billion tonnes of food wasted annually, these technological advancements offer benefits and opportunities.
Choppe-Magal highlights the importance of showcasing how agritech startups contribute to a low-carbon economy. Countries have committed over $80 billion in investments to incorporate agrifoodtech innovation into their national climate plans following the recent COP28 summit. The ability to demonstrate revenue, scalability, expansion potential, and strategic partnerships is key to attracting funding.
Despite the progress made in the agritech sector, there are still unmet market needs, particularly in terms of deeper-tech products like precision fermentation. Investors are actively seeking exceptional companies that demonstrate strong fundamentals, customer demand, and positive unit economics. The year 2024 presents an opportune moment for agritech startups to display their revenues, scale-up strategies, and forge ahead confidently.
Overall, global agtech investments are expected to rebound in 2024 as investors turn their focus toward climate solutions. The convergence between agtech and the wider climate space opens up new opportunities for startups and emphasizes the need for sustainable and environmentally friendly solutions in the agricultural industry. As countries commit substantial investments to incorporate agrifoodtech innovation into their climate plans, the industry is poised for remarkable success in the coming years.
