How can AgTech be part of the solution?

Agtech VC deal value rocketed from $6.5 billion in 2020 to $11.4 billion in 2021. Will this sort of growth continue?

We expect that after such growth in recent years and against the backdrop of more cautious asset allocation, agtech deal values may moderate in 2022/2023.

However, we see positive growth ahead as the industry continues to mature and expand, attracting increasing capital flows from a broader investor base. When this industry reaches convergence with the private equity world, we may see a new level of deal values.

Agriculture is responsible for about a quarter of global GhG emissions. How has the climate crisis changed how you invest?

Climate challenges are not new to anybody operating in the broader food and agriculture space, so our approach is to invest in solutions that can help mitigate and adapt to climate change.

Some of the themes we look at include soil and water conservation, improved use of crop inputs, the shift from chemical to biological crop protection solutions, and reduction of food waste. We could argue that the increased awareness of carbon markets in recent years has triggered new opportunities at the intersection of agtech and fintech, a space that we are interested in.

Another interesting impact of the climate crisis becoming evidently urgent is the appearance of new business models that now align incentives between farmers and the rest of the supply chain. This drives digitalization and tech adoption in a sector that has traditionally been slow to permeate.

Which emerging technologies, such as cellular agriculture and AI-powered robots, have the greatest potential to impact key issues like food security and emissions in the next decade?

In many ways, the solutions that can be most effective in improving food security and reducing emissions are not necessarily high tech. The productivity gap in many markets, especially in the emerging markets of Latin America, Africa and Asia, calls for the introduction and adoption of basic technology, right from improved seeds and basic mechanization and irrigation to more efficient physical supply chains.

On the high-end range of emerging technologies, we believe a combination of solutions can have the most impact in the long term. Crop breeding, including gene-editing and improved biological solutions have immense potential to deliver impact at scale.

When investing in an agtech startup, which green flags do you look for? Are you open to backing founders who don’t have experience in the industry?

We focus on the team and the talent. This has consistently been the main driver of success or failure, in our experience.

Other than that, the agtech world combines multiple technologies and business models applied to different agriculture areas, and we recognize that the rate of adoption is different depending on the problem and solution you are looking at. So traction should always be an important green flag.

Particularly for our third fund, we assess the feasibility of adding a disruptive business model layer — to better align incentives through the value chain — that could monetize agtech/food tech insights from a climate and sustainability perspective. This is something that we work on with the company, as we have seen how impactful it can be.

We are open to backing founders new to the industry. In our experience, though, most founders have a considerable amount of experience, and this has proven to be positive. A team’s diverse background can also bring strength to a startup.

Which areas of agtech have received the most attention from early-stage founders in recent years? In which areas would you like to see more work done or investments?

In Latin America, around 50% of the agt