Post-pandemic investment in agtech holds the key to a ‘farm to fork’ future free from hunger

August 13, 2020

BY Alexander Kalis

Roadmap to tackle food shortages

By InvestmentWeek

The longer-term implications of the pandemic on global food security are far more shocking. In April, the UN Food Programme reported that by the end of 2020, the pandemic will cause up to 265 million globally to face food insecurity, double the figure for 2019.

Meeting the Zero Hunger UN Sustainable Development Goal of providing nutritious food to all the people that need it is going to be even more important in a post-Covid-19 world.

The challenges of Zero Hunger are complex and multi-factorial. They range from ensuring resilience in food supply chains and building sustainable models of agriculture that have no negative impact on biodiversity or the climate, to ensuring governments provide mechanisms to get food to the people that need it.

What is clear – and highlighted in the EU’s recent Farm to Fork strategy – is that science and innovation has a key part to play in addressing these challenges.

With a drive towards ethical investment, fund managers and venture funds are considering the ESG implications of where they invest their money.

Zero Hunger should be a worthwhile fund focus, enabling innovative technology companies to provide science-based solutions.

Specialist food and agriculture funds such as Milltrust, Anterra Capital, Pontifax Agtech, and Cultivian Sandbox have emerged in recent years and are investing significantly in the sector.

AgFunder reported that in 2019 $20bn was raised by food and agritech companies, six times the amount raised in 2012.

This points to an increasing interest in the sector, but issues remain for companies at the early stage seeking seed and Series A investment, which is often too early for the large specialist funds.

Innovation in agriculture crosses many disciplines, including biotechnology, food science, robotics, sensing, and AI. Recent developments in synthetic biology tools have significant potential to change the agriculture industry.

They can be used to produce more nutritious crops, or crops resistant to drought or pests, and also to introduce completely new sustainable approaches to managing pests, diseases, or weeds.

Meanwhile, large agritech companies are changing their business models in response to industry consolidation – there appears to be a shift from mainly internal R&D programmes to working with external partners.

This allows access to top science, builds R&D pipelines, and has more similarities with a biotech approach.

For investors, this means there means adherence to sustainable principles, but clear routes to market and the potential for returns.