Get ready, Ag enthusiasts. AgFunder’s AgTech Investing Report 2014: Year in Review has officially been released today. According to the report, AgTech funding had a record breaking year with $2.36 billion raised across 264 financing deals. From precision agriculture to biotech to drones, venture capitalists actively invested in companies set on revolutionizing how we grow, produce, and distribute food around the world.
The AgTech Investing Report provides an overview of major industry trends, and contains information on all AgTech deals and investors in 2014. Here’s a quick look inside:
December saw some of the biggest deals of 2014, with grocery delivery, biotech, and vegan mayo the top earners
While the second quarter brought in the largest volume of deals, the fourth quarter had the most investment dollars with $969 million, a 90 percent jump over Q3 and greater than any other two quarters combined. And barring the $100 million brought in by Cool Planet Energy Systems last March and $110 million of private equity raised by VitAg Corporation in July, some of the largest individual funding rounds took place during the final weeks of 2014.
At the tail end of the year on December 30, San Francisco-based Instacart raised an impressive $220 million in a Series C — the biggest of the year. The company, which focuses on grocery delivery, garnered the attention of Thrive Capital, Canaan Partners, Kleiner Perkins Caufield & Byers, Kholsa Ventures, and Sam Altman, the President of seed accelerator Y Combinator.
Under today's unique circumstances, AgFunder is re-opening Fund III for a limited time to enable investors to join our mission and invest alongside us as LPs in a second close. Learn more here.
Flash to December 8, and LanzaTech New Zealand secured $112 million in an oversubscribed Series D funding round. The New Zealand Superannuation Fund invested $60 million in the biotech startup, with large contributions made by Khosla Ventures, Siemens AG, Chinese International Capital Corporation, Malaysian Life Sciences Capital Fund, K1W1, and QiMing Venture Partners. Founded in 2005, LanzaTech works to convert industrial and agricultural waste into renewable fuel and energy.
Four days earlier, Australia-based Sundrop Farms drew the attention of Kohlberg Kravis Roberts & Co., the world’s largest private equity firm. The company, which uses solar energy and seawater to grow produce in arid conditions, raised $100 million from KKR & Co.’s Asian Fund II resources. This investment could aid in Sundrop Farms’ greenhouse expansion — a reported 20 hectares upon completion — and help propel the company into international markets.
Look out Hellmann’s. In mid-December, vegan mayonnaise producer Hampton Creek closed a $90 million Series C deal backed by Horizon Ventures and Kholsa Ventures. Adding to the $23 million that was raised in February, Hampton Creek pulled in $113 million in financing last year. “Just Mayo” has already graced shelves at big-name grocers such as Whole Foods, Costco, Walmart, and Target, and according to TechCrunch, pasta and eggless scrambled egg products are also in the works.
Renewable energy, food e-commerce, and indoor agriculture garnered tons of funding this year
A white paper published by The Kauffman Foundation and Donald Danforth Plant Science Center last April estimated that biofuel production will increase by 800 percent by 2050. Energy security is a mounting concern, and in tune with claims of a swiftly growing sector, investors placed millions into biofuel and renewable energy initiatives. UBS and Goldman Sachs invested $100 million into Cool Planet Energy Systems, which not only makes alternative fuel from organic waste, but also produces CoolTerra, a biochar-based soil enhancer for agriculture. Chromatin, a company that breeds sorghum for farming and renewable energy production, scored $36 million in a Series D round with Wood Creek Capital Management at the beginning of the year, and then received $12.5 in debt financing in July. Grass-based biofuel producer Ceres raised $23 million in post-IPO equity, and NexSteppe, a feedstock company developing fuels from biomaterials, closed a $22 million deal with Total Energy Ventures and Berninghausen Family Office.
One look at the data, and there’s no denying that food e-commerce was a popular with investors. The aforementioned Instacart was the clear standout with a total of $44 million from a Series B round in June and $220 Series C in December. Blue Apron, a New York-based grocery delivery company, received $50 million in a Stage C from Stripes Group in April, and China-based Yummy77 attracted the attention of Amazon and AmazonFresh in May, resulting in a $20 million Series C.
From hydroponic greenhouses to aquaculture systems, a total of $175 million was invested in 19 companies in the indoor agriculture space. Following the $100 million that was raised by Sundrop Farms, AeroFarms brought in the most money with a $36 million Series A to fund its soil-free vertical farms. Hydroponics developer GrowLife, which is widening its focus on cannabis to also include vegetable cultivation, raised $12.1 million in equity.
Investors planted the ‘seed’ in startups
Investors injected $82 million worth of seed funding into 121 startups across the Ag spectrum, but those geared towards improving farming efficiency were the clear favorites in 2014. Precision agriculture was the main draw, taking in $30 million of disclosed investment dollars. Within the precision agriculture space, decision technologies amassed $16.3 million, followed by smart equipment with $7.3 million, and drones and robotics with $6.5 million.
Notable investments included Gro Intelligence, which brought in $2.9 million in debt financing for their big data analysis system; 640 Labs, a geo-referencing precision farming platform, closed on $3.1 million (640 Labs took in an additional $150,000 from Serra Ventures in October, and was later acquired by Monsanto in December); Farmeron, a data analytics system developed specifically for dairy farmers, closed $2.7 million; Grove Labs Inc. closed on $2 million for its indoor gardening units; and smart garden sensor Edyn, which is currently enjoying an extended and overfunded campaign on AgFunder, took in $1.7 million from Y Combinator.
Ag in 2015
So what does this all mean for AgTechies at the dawn of 2015? With companies like Chromatin and 3D Robotics raising millions this quarter, and Finistere Ventures closing a $150 million AgTech fund in February, we’re already off to an eventful year. Only one thing is definite for seasoned companies or entrepreneurs with ambitious ideas: interest in sustainable agriculture is accelerating and markets are expanding to meet emerging demands.
Access AgTech Investing Report 2014: Year in Review on AgFunder.