Lower than the downstream category-food e-commerce.

Agricultural biotechnology is the most invested upstream category in 2018, accounting for 9% of the total investment of US $ 1.5 billion, innovative food only accounted for 4%, or US $ 516 million, and farm management software startups received 945 million Investment in US dollars accounts for 6% of total investment.

For many years, downstream categories have dominated investment in the food supply chain. 54% and 40% of respondents believe that online restaurants and semi-finished net dishes and food e-commerce are the two most exaggerated categories. Many companies in this field are not as well-developed as BlueApron, the largest supplier of semi-finished ingredients in the United States. In addition, the number of failed startups in this field continues to increase.

This report also includes data from YouGov, further explaining why U.S. consumers who previously ordered BlueApron stopped buying: semi-finished net dishes are too expensive (73%), not enough ingredients (21%), and ingredients Preparation time is too long (17%). The author of the report, Danny O’Bryen from Idea2Scale believes that Amazon’s aggressive expansion into the food e-commerce sector through the acquisition of Whole Food is an important reason why investors lack enthusiasm for startups in this field.

Asia has strong momentum, Cross-border investment faces challenges

Of the food and agricultural technology investors surveyed, 60% of the respondents said that they had participated in overseas investment, mainly in North America (67%) and Europe (65%). Looking ahead, 57% of investors said that they are most optimistic about the development potential of Asia.

In particular, India is a country that deserves special attention. It received 12% of investor votes, and it has the largest share among all countries. This result may not be surprising, because China has a large amount of arable land and fertile soil on the one hand, and the agricultural supply chain is severely inefficient on the other. These all pose many challenges for entrepreneurs who need to provide solutions using existing or emerging technologies. As the Indian market allows smaller farmers to invest less and gain better market and financial support, there are more and more innovative companies in the region.

“For many years, the demand for food has been increasing, and by 2050 it is estimated that about 10 billion people in the world will need to be fed. We believe that India and South Asia will play an increasingly important role in ensuring global food Supply and security, “Abhilash Sethi of Indian venture capital firm Omnivore said in the report. “Furthermore, in this area, the capital of venture capital institutions has never really been invested, but we have seen that it can actually help create sustainable and profitable business models.”

For foreign investors, investing in India still faces many difficulties. Investors will”Lack of due diligence” was listed as the number one factor preventing them from conducting more international transactions. AgFunder’s Rob Leclerc said it could be easier for venture capital firms to invest in the United States. Because it is easier to get funding, it is easier to attract corporate founders who are executives in large companies.

“Capable founders face much greater risks when opening up foreign markets. So overall, you will find fewer high-quality founders to invest in because they do n’t have the same level of technical skills Or business acumen, “Rob Lecler added. The diversity of available capital in the United States may also pose a challenge to venture capital firms, because they need to differentiate themselves in the market and bring about differentiation.

European investors are less likely to invest overseas than U.S. investors, with 56% and 66% respectively. Interest in investing in Africa is also lower than U.S. investors, with 8% and 23%, but transatlantic. Investment momentum is strong. 71% of European investors who choose to invest overseas focus on the United States, while 93% of American investors who invest overseas focus on Europe.

Networking is the key, Market promotion hinders innovation

Investors say that on average they make an investment every 78 transactions they see, which is very risky for potential startups. Sometimes, the right business presentation can make a big difference. 66% of investors said that their most valuable source of transaction flow came from the warm introduction of investors in this field. Entrepreneurs and companies seeking investment should focus on building relationships with the investor community, and credibility is critical to building the right connections. Although some startups may consider accelerators and incubators as an inevitable way to speed up the investment process, only 6% of investors say that demo activities are their most valuable source of transactions.

Getting investment from venture capital firms is not just about finding the right direction. 53% of investors say that the primary reason they give up a deal is because of a team or lack of certain skills. 66% of investors consider marketing to be the main dilemma faced by startups, which is often related to communicating with farmers and being able to quickly and effectively communicate the value proposition.

SparkLabs’ Jonathan Quigley said in the report: “New technologies are emerging endlessly, and it is difficult to have time to understand which technologies can really realize value. Farmers are smart operators, and timing is critical. The application of innovative solutions is also facing Many challenges, because of the lack of basic facilities and equipment, there is no interconnection between data, information, and farmers.

Reference Survey: Which Food & AgTech categories, geographies are investors most excited about?

Cover image source: Pixabay