Last weekend, Marc Andreessen published his now-famous essay It’s Time To Build; a call to arms to innovators and investors to build a more resilient society. This is our acceptance of that call, and our pledge to do our part to build a better, more resilient food and agriculture system.
The past month or so has exposed alarming fragility in our agrifood supply chains – fragility many of us knew existed but not enough of us were willing to do anything about. For several years now, AgFunder, our investing peers, and many amazing entrepreneurs have been accelerating innovation and investment in agri-food technologies but as a sector — especially in terms of its size and importance — it’s still massively underfunded.
You only need to look at the comparison between food and agriculture’s contribution to GDP and its share on venture capital funding to see the shortfall: it represents between 15% and 20% of GDP but in 2019 just 6.7% of global VC funding. Even compared to other essential industries, agri-foodtech investment is underweight; healthcare, which contributes a similar portion of global GDP, collected around 11% of global venture capital dollars in 2019.
Further, with the growing link between food and our health during this pandemic, the shortfall is even more alarming; 88% of Americans are at more risk of complications from Covid-19 than the remaining 12% who are deemed metabolically healthy. (“Metabolic health” means having ideal levels of blood sugar, triglycerides, high-density lipoprotein (HDL) cholesterol, blood pressure, and waist circumference, without using medications. These factors directly relate to a person’s risk for heart disease, diabetes, and stroke, which in turn contribute to a poor response to Covid-19, according to increasing numbers of studies.)
We’ve kicked the can down the road for too long. It’s time we do better.
Agrifood technology cannot solve the Covid-19 crisis, but by investing in innovation that’s supporting the base industries in Maslow’s hierarchy of needs, we can use venture capital and innovation as a platform to build a more robust and resilient society. And as we face a potential food crisis in the wake of Covid-19, now more than ever, investment in agri-foodtech is essential.
Mission and urgency aside, agrifood is also a defensive sector; during the global financial crisis of 2008, agricultural assets including farmland and private equity performed well and were non-correlated to the public stock and bond markets. Why? Well, put simply, because people still have to eat so farmers always have to farm.
For intrepid investors, these are also the best times to invest. In a recent report looking at VC investment returns from 2001 and 2008, the authors report that investments made in those years returned an additional 1.25x and 1x respectively.
For these reasons, we’re still open for business and actively investing in the future of our food and agriculture system, some of which we discussed last week in our recent Digitalk with Climate Corp’s Dave Friedberg, Alexandria’s Blake Stevens, and AgFunder’s Rob Leclerc.
Under these unique circumstances, we’ve re-opened our third fund for a second close to enable new investors to join us in our mission. Click here to find out more about becoming a Limited Partner in Fund III. AgFunder Founding Partner Rob Leclerc is hosting two webinars where you can learn more about the fund and about the exciting startups already in the portfolio. See below for webinar dates and times.
If you would like to request access to the investment materials now, please complete this investor survey (only institutional and accredited investors need apply.)
AgFunder Fund III Investor Webinar
May 11, 8:00am PT
May 11, 5:00pm PT