Australia’s AgTech sector has grown considerably over the last decade and is showing further signs of maturity, with a hefty $123.8 million worth of angel and seed funding logged in 2017.
Until recently, however, a lack of local investment data has been stunting its progress – a number of investors put off by the opacity of the nascent market.
“Those drawn to the asset class have been forced to lean primarily on [geographically-biased] US data and have been more conservative as a result”, said Spencer Maughan of Finistiere Ventures ahead of the AgTech Summit – 26-27 Feb 2019, Sydney.
“Although the US has one of the most sophisticated agtech markets globally, its conditions do not accurately reflect those of Australia, in which climatic conditions and high labour costs are forcing farmers to innovate at a faster rate”, he added.
An additional side-effect of local data-poverty is the misguided expression of capital. “We are seeing a real disconnect throughout the country”, Spencer continued. “Commercial hotspots such as chemistry and life sciences are being altogether overlooked, even though we are seeing some great commercial outcomes in this space.
“Meanwhile, subsectors with less underlying infrastructure and fewer success stories are seeing much weightier injections of capital”.
Addressing the need for better local data insights, Finistere Ventures recently collaborated on the Australian AgTech report alongside the USSC at the University of Sydney.
This supplemented work by Finistere in consultation with PitchBook, presented in the 2018 Early Stage AgTech Report and the 2018 Global AgTech Review, which pulled information on more than 4000 companies and financings.
The Australian AgTech report explored local angel and seed stage funding – looking at precisely who is doing deals, who has been funded and to what extent.
“We focussed on angel and seed stages as, compared with other sectors, the AgTech market is more heavily influenced by these than the higher-hitting Series A and B deals”, said Spencer.
“AgTech innovation is happening all around the word and a large portion of these small, albeit important cluster of startups is relying on funding from local communities.
“However, what we are now seeing is the evolution of a rich hunting ground, fit for venture capitalists”, he added.
“We hope our findings will accelerate the already impressive growth that is happening in this space, facilitate collaboration between start-ups and industry and, ultimately, help Australia become a major global player”.
Spencer Maughan will share details of his research and what this means for the fledgling market at the 2nd Annual AgTech Summit – to be held 26-27 February 2019 in Sydney.