Data Snapshot is a regular AFN feature analyzing agrifoodtech market investment data provided by our parent company, AgFunder.
Controlled environment agriculture, or CEA, claimed more than half of all sustainable farming investments in Europe last year. But data from AgFunder and Invest-NL’s recent European Climate Investing special report suggests that investments in sustainable agriculture are both under-funded and a big opportunity for investors looking for climate investing angles.
Of the $9.2 billion invested in European agrifoodtech last year, just 25% went to companies with technologies that could positively impact the environment. Sustainable farming accounted for 9.5% of investment in European agrifoodtech.
Sustainable farming defined
The report defines sustainable farming as technologies that can accelerate food production while protecting or improving planetary and human health.
One example from AgFunder/Invest-NL’s analysis: “autonomy-as-a-system” startup AgXeed. The startup’s CEO Rienk Landstra explained some of the problems with current agricultural tools and practices.
“The weight of agricultural equipment… have compacted our soils. This is negatively impacting the biodiversity inside the soil and the ability of plant roots to reach nutrients in deeper soil layers. This irreversible process results in less productive fields,” he said.
“To compensate for this, farmers are using more chemicals and fertilizer. If we do not change this, it will inevitably lead to erosion and ultimately desertification,” he added.
AgXeed deploys autonomous “agbots” in the field that can perform tasks on the farm while staying under the soil compaction threshold.
Other sustainable farming technologies include sustainable crop inputs and protections, precision farming technology and CEA.
AgFunder investment categories most closely aligned with the category and with climate impact include: novel farming solutions, innovative foods, farm robotics and machinery, as well as some agbiotech and biomaterials and energy.
Top sustainable farming deals
In Europe, CEA startups topped the sustainable farming chart in 2021, raising more than half of the $900 million in sustainable farming investments made last year.
German vertical farming company InFarm claimed one-third that amount with two fundraising rounds. Other notable CEA companies include Intelligent Growth Solutions (IGS) and Jungle France. [Disclosure: AFN’s parent company, AgFunder, is an investor in IGS.]
is a major strength, with startups in that space raising more than half of the $900 million Sustainable Farming companies raised in 2021.
Insect farming is also a strength in European agrifoodtech. Startups developing insect protein — primarily for for animal feed — grabbed 14.7% of the sustainable farming investment pie, followed by crop inputs (14.6%) and precision agriculture (12.4%).
As previously noted, European investors are under-investing in climate tech. Trillions of dollars are needed annually to meet the 2030 goals of the Paris climate accord. Much of the upfront capital addressing acute climate challenges and supporting technological developments needs to be patient capital — that is, financing that doesn’t require near-term returns or instant profitability.
A bright spot: while much of the tech sector is treading through a downturn, climate tech investment is holding steady.