Agritech venture scene globally and locally
For Venture Capitalists, VCs, along with angel investors in MENA region, who have always bee interested in fostering sustainable models, agriculture has become the ‘buzzword’ of recent times. With focus on developing technology-driven solutions, agritech make investors excited along with help to accelerate the growth of the emirate’s agri-tech scene and promote innovation that is relevant locally and can be exported globally.
The agri-segment started to show interest in 2019 when large mainstream venture capitalists such as Sequoia and Accel Partners invested in agri-tech, which attracted an all-time high investment of around $300 million in the previous year.
Agritech booming in MENA region
Recently Abu Dhabi Investment Office (ADIO) announced that it had invested $100 million (Dh367m) to bring four agriculture technology companies to the emirate as part of government efforts to attract high-skilled talent and cutting-edge research. Making partnerships with most powerful players in the agritech high tech scene in MENA region they are aimed to build agri-tech research and development (R&D) facilities and production centres in Abu Dhabi and explore how arid-climate countries can benefit from new technologies.
According to the statement, ADIO will support the companies from set-up to commercialisation, while the program itself will help in further development of the agri-tech base in Abu Dhabi and attract others in the sector to plug into the emirate’s R&D centres.
Venture Capitalists view combating plaguing issues through next-generation technology-driven solutions. For them, the key to investing in startups holistically blending both traditional agricultural practices as well as smart solutions. With startups employing next-gen technology viz. The Internet-of-Things (IoT), Machine Learning (ML), Artificial Intelligence (AI), Predictive Learning, and more to suit local needs, it is a win-win for both investors and founders of startups.
Driven by smart technology and sustainable business models, startups can look at having customized in-house solutions to solve a multitude of agricultural-related issues, which may lead to the development of in-house smart solutions attracting local and global investors.
What’s there in agritech startup landscape?
Meanwhile 2019 was an inflexion year in terms of capital flows – it was the best year for agri-tech since the start of the ecosystem, 2020 might see the booming of farming technologies in the UAE and MENA region in general.
The recent agritech investments will have a mandate of expanding the profile of local food producers in the UAE and the emirate’s agritech ecosystem as a whole.
In the frame of ADIO Dh1 billion agri-tech initiative programme, a vertical farming company AeroFarms will built the world’s largest R&D Indoor Vertical Farm to conduct research while also tackling the challenges of desert agriculture from its new 8,200-square metre facility in Abu Dhabi.
Madar Farms, a home-grown UAE firm, will build the world’s first commercial-scale indoor tomato farm to use only LED lights, located at Kizad.
RDI is developing an irrigation system to transform water usage in UAE agriculture and conducting research trials to increase crop yields in sandy soils and non-arable land. Locally-based firm RNZ will set up an R&D centre to research, formulate and commercialise “agri-inputs” that will help to grow more with less.
The future of agritech and farming in the GCC and the UAE
The growth of local farming will lead to the boom of IT and digital products serving farmers. New technologies, using data to build predictive models in the areas of price-forecasting, pest attacks and yield estimation, will definitely attract investors, high-skilled talent and cutting-edge research to the country.
So obviously, start-ups operating in areas such as farmer platforms, precision agriculture, agri-biotech, post-harvest technologies will be high on investors’ radar in 2020 and 2021.