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Startups like Pure Harvest have been helping to transform Abu Dhabi's desert into farmland. Image credit: Pure Harvest

Covid-19 & shifting regional relations put agrifoodtech top of mind for UAE

December 8, 2020

Satellite imagery of its largest constituent, Abu Dhabi, hints at why the United Arab Emirates (UAE) imports up to 90% of its food: the vast majority of its landscape is arid desert.

That has not stopped the UAE becoming home to artificial ski resorts, luxury hotels, and water parks; nevertheless, just 5% of the country is arable land.

But that is changing, and fast. Emboldened by advancing agricultural technologies like water desalination, precision irrigation, indoor farming, and soil regeneration, the UAE has been looking at ways to produce far more of its food closer to home. It’s a search that has taken on an added urgency in light of local population growth, increased relevance of ‘MENA [Middle East and North African] Millennial‘ values in top-level decision making, and a backdrop of shifting regional rivalries around the Persian Gulf.

Moreover, Covid-19’s disruptions to travel and trade have only heightened the need to move food security investments into overdrive, Tariq bin Hendi, director general of the Abu Dhabi Investment Office (ADIO), told AFN.

ADIO was established last year to attract more foreign investment into Abu Dhabi, while supporting businesses and investors looking to relocate to the city-state. In April it launched one of its first major projects – an agritech program doling out $100 million in cash and non-cash incentives to four foreign startups to build tech-enabled farming facilities in the emirate.

The program recently completed a second round of investments into the sector. These are designed to bolster food security by stimulating a homegrown agrifoodtech ecosystem, bin Hendi explained.

“The food security issues are quite wide and encompassing,” he said, mentioning water scarcity, logistics, food quality, and food waste in particular. “We’ve got lots of areas that we need to attend to.”

The latest funding tranche is a series of partnership deals worth $41 million with three startups:

    • Nanoracks – Hailing from Houston in the US, this company says its vision is to “solve key problems both in space and on the Earth – all while lowering the barriers to entry of space exploration.” It’s set to build its StarLab Space Farming Center in Abu Dhabi following ADIO’s investment. The center will carry out research on food production in outer space and in extreme climates here on Earth.
    • FreshToHome – this Indian e-grocer specializing in fresh meat and seafood already has a presence in the UAE, and will expanding its operational capabilities in the country while investing in aquaculture and cold chain technologies.
    • Pure Harvest – this local “smart farm” startup will accelerate R&D and production around growing nutritionally important omega-3 fatty acids from algae.

The ADIO funding is not the first of its kind, designed as it is to draw in high class, often international talent to the emirate with cash and tax incentives. In fact, it is another disbursement from Abu Dhabi’s $272 million ‘AgTech Incentive Program,’ which is run out of an accelerator called Ghadan 21.

Olive branches bring innovation

The region which Abu Dhabi sits at the heart of is going through a period of geopolitical flux, with Gulf countries splitting into spheres of influence dominated by Iran and Saudi Arabia respectively (the UAE falls into the latter grouping.) This is likely to consolidate concerns about the UAE’s access to food imports, further underlining the need for increased domestic food production and other food security measures in the years ahead.

Similarly it may be the case that, thanks to the changing winds of geopolitics, one nation in particular will get more of a look-in on the kinds of partnerships that ADIO is building than ever before.

Israel and the UAE agreed to work towards formalizing relations in August, potentially ending decades of animosity and opening the door to economic collaboration. When it comes to agritech, Israel has ample expertise to bring to the table – thanks in no small part to its kibbutz collective farming systems and technology spun off from its military.

In October, ADIO-backed FreshToHome raised $121 million in what it called India’s “largest ever Series C funding for consumer tech.” Read more here

As The New York Times reported recently, a private jet full of representatives from the portfolio companies of Jerusalem Venture Partners has already flown in for talks in the UAE – a trip that one Emirati businessman positively described as “like falling in love.” Reportedly of special interest to the UAE side were Israeli startups like Agrint, which makes health sensors for date palms, and chickpea protein extractor InnovoPro.

A former director of the Israeli Ministry of Regional Co-operation, Yishay Sorek, is another businessman turning his focus to supporting the prospect of Israeli agrifoodtech companies expanding to the UAE.

“We’ve seen excitement from leading food and beverage companies in the UAE to explore collaborations with Israeli foodtech startups, especially the ones with a working product,” Sorek told AFN.

He said that the most promising fields for entrepreneurs looking at opportunities in the UAE include sugar reduction, alternative protein, and sustainable packaging technologies.

“Israeli foodtech startups, as well as more mature companies, should be looking at the UAE as a scale-up opportunity and as a launchpad to global markets,” he added. “Additionally, we believe that joint R&D has great potential, but requires joint supportive infrastructure which is not yet in place.”

‘A reactivation of globalization’

Speaking more generally about the need for international collaboration, bin Hendi said that in light of “borders closing to stem the spread of Covid-19, and the narrative quickly changing to the old rhetoric around nationalism […] what we realize now is that we’re only going to be able to solve these issues that we all face collectively through proper reactivation of globalization and sitting at the table and having the same discussions with one another.”

Another recent example of reactivated globalization was the UAE’s first-ever FoodTech Challenge, which saw the country offer participating startups $1 million in funding and access to local accelerator programs.

Attending the event, Mariam Al Mheiri, UAE Minister of State for Food Security, saw the contest as a way toward new national targets set out in the UAE’s National Food Security Strategy.

“By 2021 we want to increase our local food production by 15% on certain food items and increase yield improvement by 30%” she told The National.

Winners picking up around $100,000 each in prizes included Australian microalgae producer Has Algae; Saudi Arabia’s Red Sea Farms, a greenhouse tech firm finding ways to grow tomatoes in saltwater; the UK’s Safety Net Technologies, which uses lighting signals to deter or attract specific fish species; and locally-based QS Monitor, which is developing supply chain management software and hardware.

Got a news tip? Email me at [email protected] or find me on Twitter at @jacknwellis

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