Louisa Burwood-Taylor is the managing editor and head of news & research for AgFunder and AgFunderNews. The views expressed in this article are the author’s own and do not necessarily represent those of AgFunderNews.
AgriFoodTech. It doesn’t exactly roll off the tongue, does it?
I’m afraid you have me to blame for that, as it turns out I coined the phrase in 2017 as a way of combining agtech and foodtech into one venture capital sector. Previously, the two categories were typically separated.
Agtech came first – arguably with the first tractor and certainly with the introduction of genetically modified crops. In the venture capital world, however, it was the soil sensors and software tools for farmers that first captured venture capital attention. (See Climate Corp.)
A few years later, foodtech came along with the explosion of food delivery tools and, a bit later, alternative meat and dairy startups.
AgFunder ruffled feathers for a couple of years by including food delivery technologies in its annual AgTech Investing report, because doing so inflated the totals. (And yes, the critics weren’t wrong – funding to food delivery startups reached $1.65 billion alone in 2015, more than a third of the $4.6 billion raised in total that year.)
However, we stood by our belief that investing in agtech meant investing in anything transforming the way we grow, transport, and eat our food at any stage of the supply chain.
I first used the term “AgriFoodTech” with Rob Trice, a partner at The Mixing Bowl and Better Food Ventures, when he was driving me down to San Joaquin Valley in the spring of 2017. (I don’t know if he remembers.) I said we needed to combine two increasingly indistinct categories — agtech and foodtech — into one term that encompassed what was happening across the entire food value chain.
Back then, there weren’t many of us in the space, and we spent a lot of time talking about how to best showcase the opportunity to the outside world of investors and brilliant entrepreneurial minds. Foodtech has always been more appealing to the mainstream — and relatable. People don’t always realize that eating is an agricultural act, but they do have a lot to say about their favorite restaurants, recipes and food brands.
Our then-small community also spent a lot of time discussing how consumers were going to change what happened on farms. I think I’ve lost count of how many times I’ve heard Sanjeev Krishnan of S2G Ventures say consumers are “voting with their pocketbook.” (I’ve also always wondered if he is a time traveler from the 1900s because I have never owned a pocketbook!)
And with consumer influence reaching upstream, digitization was also effectively shortening supply chains, turning them into interconnected “supply webs,” as my friend Danielle Gould of Food+Tech Connect likes to call them.
So the lines between foodtech and agtech were starting to blur: farm-to-consumer eGrocery companies were a good example, where companies worked directly with farmers to sell their produce online to consumers, creating value for both parties (albeit perhaps not the middlemen.)
Over time, building an investment thesis to encompass the whole of the supply web became increasingly obvious. This was not just because of that fundamental shift in how the industry was going to operate and the influences upon it, but also for the venture capital community that was trying to make a return on investing in it.
Consumer-facing foodtech was starting to return money to its investors — and generalist investors were getting in on the act. With just one or two growing seasons a year to iterate on their products, farm tech entrepreneurs were starting to talk about needing a longer time horizon for exits, a theme we dig into further in this magazine. For VCs with a 10-year horizon and fiduciary duty to their LPs, it made a lot of sense to balance their portfolio across the supply web as well as technology types.
After I introduced the term AgriFoodTech in 2017, AgFunder launched its first fund. This wasn’t a coordinated effort; AgFunderNews has operated very independently at AgFunder from the get-go, which is how we did so much with so few people for so long. AgFunder now invests in eGrocers and restaurant robotics all the way to soil analysis and farm robotics, and everything in between.
I wish I’d come up with a catchier word back in 2017, and I’ve always said to people please please give me an alternative; we tried – aftech, foogtech, afoodtech – as you can see, it’s not easy.
Despite its challenging presentation, AgriFoodTech as a term is now used all over the place — you’d be hard-pressed to find just an “agtech” or “foodtech” VC these days. And I still wonder if some people still think the term is more about agriculture than about the entire food supply chain.
I joined AgFunder in 2015. This was after 18 months as the founding editor of Agri Investor, the first global publication focused on agriculture investment, where I mostly covered farmland funds — even regenerative ag funds — and some private equity. Agtech was a small piece of the pie back then. And so these conversations about the interconnectedness of the food and agriculture industries really blew my mind. It is without a doubt the most complex industry I’ve covered — and I kicked off my career in the structured bonds and MTNs industry so that’s saying something!
But treating parts of the chain or web in siloes is clearly a mistake as the advent of new tech is slowly but surely disrupting that status quo. The lines are also starting to blur with other industries such as healthcare as we discover the impact of what we eat on how we feel.
Agrifoodtech is also increasingly considered climate tech – or at least many of its categories are – and in 2023, climate tech investment is, in many ways keeping the industry alive.
So perhaps we need a new term for the next decade? If anyone has something catchier than agrifoodtech to suggest, I’m all ears!
For more reflections on the last 10 years in AgriFoodTech, download our special 83-page report.