Australia’s AgTech sector has seen impressive growth in recent years with $123.8 million worth of angel and seed funding reported in 2017 and a tenfold increase in venture capital deals since 2014.
Business startup accelerator GrowLab – owned by Cicada Innovations – has been at the forefront of this growth, having recently graduated its second batch of AgTech startups and with plans to run its third cohort in the coming year.
Ahead of the AgTech Summit we spoke with Cicada’s Chief Investment Officer, Alfred Lo, to get an idea of what is happening behind the scenes of this new and relatively opaque market.
“We are seeing a real boom in this knowledge industry”, said Mr. Lo. “Just a few years ago, the abbreviation ‘AgTech’ was unfamiliar to many, but now it is practically a household term. This is a reflection of the progress we have seen across the value chain.”
“Australian farmers have always been early adopters of technology but now we’re seeing a broader pipeline of non-traditional technologists get involved and apply their technology in agricultural applications”.
“Overseas markets like the USA and Israel have seen an explosion of AgTech innovation in the past decade and global competition is on the rise”, he continued.
“Combine this with increasingly high labour costs and the tough climatic conditions Australia has to contend with, homegrown technology that understands the needs of the Australian farmer offers the ability to, not just level, but to tilt the playing field in our favour”.
What are some of the most promising innovations in the pipeline?
We have seen some really interesting solutions involving moisture planting technology that reinvent the way seeds are planted in the fields and offer substantial productivity gains. The technology works by measuring moisture levels in the ground and digging deeper until suitably fertile conditions are found.
We’ve also seen some exciting innovations in the non-digital space, particularly in clean meats. One company we have worked with is utilising plant based protein and genetically modified yeast to make “beef” patties that look like meat, cut like meat, even bleed like meat. If you think agri-food-tech is young, this vertical is even younger, which makes it all the more exciting.
What are some of the sector’s biggest challenges and opportunities this year?
When it comes to technology, whether hardware or software, leveraging global opportunity and establishing a pathway to the US market is key – particularly for those who want their venture backing.
A key challenge from a funding perspective, is that venture capital in Australian agtech is still quite young. It’s a long game to play in VC but there’re encouraging signs with more local funds being established and increasing sizes of funding rounds raised.
Superficially, we think there are some really promising companies that are being backed – companies that are tackling global markets and showing great momentum. But we won’t really see outcomes for the next 6-8 years.
I think this year should be less about playing to our geographical advantages and more to our knowledge. Generally, the Australian marketplace is really rich with innovation and there are lots of ideas in the pipeline. However, turning that science fiction into a viable business model requires more than just a great idea – and that’s where we come in.
What are you doing to accelerate progress?
Our mentor-driven acceleration programs combine some of the best minds in sector – from venture capitalists, through to farmers, successful AgTech entrepreneurs, IP lawyers, to those who know how to build an app really well.
Building on this foundation, we recently launched our venture matching program – a four-step program which matches technologies with the visionaries that will make it a success.
Great things come when you bring people together from different skills and experience – strong commercial and strategic thinkers combined with researchers and scientists working on breakthrough technologies – that’s when you see really successful innovation.