The AgriFood Tech industry in Australia is evolving into an integrated, holistic sector worthy of attention from prospective investors and technologists, researchers, public sector authorities and - not least - producers.
Australia has long been an innovator in agriculture. The knowledge transfer and translation of previously siloed expertise into scalable solutions within the AgriFood Tech space are increasingly essential as Australia and the rest of the world grapple with the realities of climate change, a growing population and the pressure to produce more food.
In 2020, AgriFood Tech startups raised $26.1 billion globally. Significantly, much of this funding came in later-stage rounds, a sign of sector recognition. Equally telling, we see a growing number of companies entering the space and a growing number of investors. Here are a few more observations and key questions worth considering.
Bringing tech out of towns
Closer relationships between Rural Research and Development Corporations (RDC) and producers have long existed to promote and progress different solutions, like new crops or advanced instruments, and will continue to benefit AgriFood Tech ecosystems. Bolting AgriFood Tech on to these relationships will only help spur innovation. But this won’t happen without action.
AgriFood Tech creators must get out of their labs, incubators, and co-working spaces in cities to continue holistic integration of technology and food production. They need to spend time in the regions, talking to farmers.
Creating rural hubs allows farmers to connect with AgriFood Tech companies directly. When technologists at AgriFood Tech companies can spend time listening to farmers detailing their pain points, they can more quickly iterate and level up their solutions. As the two groups begin to speak each other’s language, we will see a massive impact on the fit-for-purpose nature of emerging technologies.
Exposing environmental costs
Improving food security will require greater understanding and linking of our food production and transport systems.
Consumers and those in the ESG space increasingly demand to know more about the food supply chain itself. What levels of carbon emissions are involved? How about water use? Questions abound regarding who should pay for this layer of infrastructure. What value does it add? Does it require monitoring?
Closer measuring of the environmental impact of food production could pay off up and down the food supply chain. New ways of financing or transporting food may emerge. The future of AgriTech relies on building solutions that address food systems as a whole; gathering data may be a key role — but for whom?
Opportunity Down Under
AgriFood is poised to take off in Australia. The Australian Agricultural industy is currently worth $60 billion a year (this figure is pre-farm gate agricultural production and doesn’t capture the food processing aspects of the industry), and is predicted to reach $100 billion by 2030. Singapore and Indonesia saw more than $190 million invested, putting them in the top 15 countries.
This is a massive growth opportunity as AgriFood Tech companies themselves are rapidly maturing, gaining the sophistication required to secure investment or to scale up. The AgriFood Tech sector itself is capable of being a standalone industry, generating $20 billion in annual economic benefit through the development of new farming systems, business models and food products.
Investments driven by the aforementioned macroeconomic trends will benefit further if they coincide with increasing government investment into research. At present, about $1.3 billion makes its way through the RDC system into agricultural research. This creates a foundation for Australia to be a leader in AgriFood Tech.
At BDO, we work with founders and CEOs at all stages. If you wish to connect and support our ecosystem of AgriFood Tech startups, investors and partners, we’d love to connect with you. If you have any questions about BDO’s full suite of professional services to help your AgriFood Tech venture reach its full potential, please contact your local BDO adviser.