7 investors discuss how agtech can solve agriculture’s biggest problems

Climate change and geopolitical instability are wreaking havoc on agriculture. To gauge how VCs are responding to these issues, we spoke with seven investors.

For starters, rising greenhouse gas emissions are driving punishing droughts and storms, which are harming crops, exacerbating food insecurity and threatening countless livelihoods. At the same time, Russia’s invasion of Ukraine is rattling the world’s grain supply, driving up costs and further aggravating supply chains.

Even as these and other crises hammer the multitrillion-dollar industry, startup investors see potential for huge returns with tech that could boost yields, slash emissions and mitigate waste.

“There are opportunities to develop [and] adopt new technologies all along the food value chain that will impact key issues like food security and emissions,” Adam Anders, a managing partner at Anterra Capital, told TechCrunch. Among the areas where he sees the biggest potential impact, the investor cited improving plant genetics, boosting the shelf life of more products and putting digital tools in the hands of farmers.

Consumer behavior is another piece of the proverbial puzzle as climate literacy increasingly alters how folks shop.

“Over the last few years, we have seen skyrocketing interest in sustainability from consumers and food brands, and awareness over the negative impacts of agriculture continues to grow,” said Ting-Ting Liu, investor at Prosus Ventures. “People are not only paying more attention to agricultural-related emissions but also how much land and water is required to support the world’s food supply and the amount of runoff being generated,” she said.

Liu argued that this demand is creating strong tailwinds for businesses that strive to address agriculture’s environmental impact, ultimately driving more capital into everything from cellular agriculture to methane reduction solutions for livestock.

Still, agtech is not immune to some of the broader trends in venture.

While the value of agtech VC deals rose to $11.4 billion in 2021 from $6.5 billion in 2020, several investors told TechCrunch they’ve noticed a slowdown in agtech deals this year amid the wider tech downturn of 2022.

“2021 was a record year for VC across the board. In 2022, VC investments across the board are about 30% lower year on year, and I would expect a similar slowdown for agtech,” Monica Varman, a partner at G2 Venture Partners, told TechCrunch. “Over the medium to long term, however, I do expect agtech VC funding to grow, given supply chain challenges, traceability concerns and advancements in enabling technologies in synbio and robotics,” she added.

Agtech investors are also still largely funding men. Out of the nearly $11 billion dispensed into agtech in 2021, 78% went to firms with all-male founders, according to PitchBook. The disparity has only worsened so far in 2022, rising to 81% (out of nearly $7.3 billion) as of September 14, per the data firm.

To gauge whether (and how) VCs are responding to these issues and more, we reached out to:

Brett Brohl, managing director, Techstars Farm to Fork, and managing partner, Bread and Butter Ventures

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

It’s not going to continue in the short run largely because of macroeconomic factors you’re just not seeing — for example, many late-stage deals are going through recently — so in the short term, definitely not.

In the long run, the sector has a tremendous amount of opportunity and room for innovation, so with time, you will see continued growth and investor focus on agtech.

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

It is a huge reason deal value skyrocketed in 2020 and 2021. Investors understand that this challenge creates an opportunity. Agtech is not as mainstream as many other sectors, so we need more eyeballs and capital. If you are making the food system more effective and efficient, you are making it more sustainable.

We aren’t a big enough fund to finance a startup forever, and we depend on later-stage investors, so this attention and resulting influx of capital helps remove some risk from our portfolio.

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?

We 100% believe in cellular agriculture and are also huge fans of the robotics space, especially robotics that solve very specific pain points and have low BOMs.

“Automation and computer vision will be transformative for agriculture over the next decade, particularly as food production is moved closer to the point of consumption due to food security concerns.” Monica Varman, partner, G2 Venture Partners

We also love the packaging space — lots of packaging goes into the transportation and movement of food. We’re also excited about anything to do with logistics, manufacturing or transportation that makes the food chain more sustainable.

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?

Investing in agtech startups is no different from any other company. A great team can take a C- idea, pivot, iterate and make it work. But a C- founder will run any idea into the ground, regardless of how good it is.

While founder-market fit can be a benefit to a company, great entrepreneurs are smart, have a great work ethic, are coachable and know how to surround themselves with people who make up for their weaknesses. So industry experience isn’t a requirement for us.

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?

The obvious answer is alternative proteins. So much capital has been invested and so many founders are building cool things in the space.

I’d love to see more attention paid to things that are a bit downstream, such as manufacturing, logistics and the future of food retail. Over the last few years, you have seen traditional agtech investors move their thesis further downstream, so it is happening.

I’m also really interested in fintech applications in the agriculture space, like what Traive and Milk Moovement are doing.

What are you doing to fund underrepresented founders in agtech?

We actively seek out investors, forums and networks that support underrepresented founders and invest or work with entrepreneurs that are a stage earlier than where we invest. We also maintain a diverse investment team — 75% of our fund are women.

Finally, we hold open office hours for anyone every week and provide free public education through multiple channels to help founders level up.

Before the invasion, Russia and Ukraine accounted for about 28% of wheat and 15% of corn exports globally. How has the Russian invasion of Ukraine affected agtech VC deal-making given its impact on the global supply chain and the world’s grain supply?

I don’t think it’s done much to early-stage agtech founders or venture capital. The macroeconomic effect of the war has at least, in part, been a tightening of monetary supply, which will trickle down to early-stage startups. However, the impact has not been significant at early stages yet.

Bayer bought Monsanto for $63 billion in 2018, and a year earlier, ChemChina acquired Syngenta for $43 billion. Today, Bayer’s market cap is less than that deal’s value, and China’s ambassador to Switzerland has called the Syngenta acquisition a bad deal for Beijing. Have the outcomes of these deals affected investors’ hopes for blowout late-stage exits?

I wouldn’t call these acquisitions of “modern” agtech companies. Monsanto has been around for 100+ years, and Syngenta was formed over 20 years ago, and even then it was a spin-off. Additionally, these happened in 2017 and 2018. Investment in agtech has exploded since then, indicating that the market does not think these two acquisitions are indicative of underperforming venture investments.

The outcomes of companies like Upside Foods, FBN and Indigo Ag will be far more important to the agtech ecosystem. Unfortunately, it’s a very tough market for late-stage companies right now, and that will slow exits and depress ROI on many venture investments, not just agtech deals.

How do you prefer to receive pitches? What’s the most important thing a founder should know before they get on a call with you?

I’m open to warm intros, thoughtful cold emails or pitches during my open office hours. If you’re pitching me on a call, the number one thing is to be yourself.

Anything else you’d like to comment on?

I think the blurred lines between food tech and agtech are really interesting. What is agtech? It’s not just farm inputs; there is a lot more to it and that, to me, is exciting.

Monica Varman, partner, G2 Venture Partners

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

2021 was a record year for VC. In 2022, VC investments across the board are about 30% lower, and I would expect a similar slowdown for agtech.

Over the medium and long term, however, I do expect agtech VC funding to rise given supply chain challenges, traceability concerns and advancements in enabling technologies in synbio and robotics.

7 investors discuss how agtech can solve agriculture’s biggest problems by Harri Weber originally published on TechCrunch

Is it time for Elon Musk to find a Tim Cook for Tesla?

Elon Musk has his fingers in a lot of pies. He’s CEO of automaker Tesla and rocket company SpaceX. He also founded tunnel construction firm the Boring Company and co-founded Neuralink, a brain implant startup. Now it looks like Musk will spearhead the effort to take Twitter private and potentially roll it into an “everything app” he calls X.

If that sounds like a lot, well, it is. Many observers have wondered whether Musk should step down from one or more of his leadership positions, particularly as CEO of Tesla, because he’s strapped for time. They might be right. Other observers see signs of Founder’s Syndrome, in which founders struggle to delegate, share the limelight and so on. That might also be the case.

Here’s another way to phrase that question: Is Tesla still in its early days? Or is it a well-established business that needs to focus on electric vehicles and distributed renewable energy? How you answer that probably dictates whether you think Musk should stay or go.

These questions address a challenge that all companies face at some point in their lives: Should they invest resources in exploring new niches or work on exploiting existing ones they’re already familiar with?

Does Tesla need a Tim Cook?

Many companies try to do both — the so-called ambidextrous organization — so they can continue to profit from an existing business while exploring new markets. That’s hard to pull off, and no matter how hard they try, every leader has tendencies that pull them in one direction or another. (This is why it’s important for founders to have diverse, empowered lieutenants and boards so they can draw on a range of views and competencies.)

Is it time for Elon Musk to find a Tim Cook for Tesla? by Tim De Chant originally published on TechCrunch

Gourmey grabs $48 million to keep working on lab-grown foie gras

French startup Gourmey just raised a Series A funding round led by Earlybird Venture Capital. In total, the company banked $48 million (€48 million). The company has been working on cultivated meat, and more specifically lab-grown foie gras. It is part of a new wave of companies that want to turn cell-cultured meat products into mainstream products.

“Most of the financing is equity but also includes a minor portion of non-dilutive funding, specifically from public institutions like Bpifrance,” co-founder and CEO Nicolas Morin-Forest told me. Gourmey isn’t disclosing the valuation of the company.

Other investors in today’s round include Keen Venture Partners, Omnes Capital, Discovery, Thia Ventures, Instacart CEO Fidji Simo and some existing investors, such as Heartcore Capital, Point Nine Capital, Air Street Capital, Partech and Beyond Investing.

Gourmey matures stem cells in bioreactors with the right nutrients at the right temperature so that it becomes synthetic foie gras or — as they say — slaughter-free foie gras.

Of course, there is a lot of stigma associated with foie gras. Many people simply refuse to eat foie gras because of animal cruelty. More generally, meat has a significant impact on climate change.

With today’s funding round, the startup wants to move from research and development to commercialization. But you won’t find Gourmey’s product in a supermarket just yet.

“Our cultivated foie gras is market-ready and has already convinced several French and international Michelin-starred chefs, restaurants, and high-quality meat distributors,” Morin-Forest said.

In order to fulfill orders at scale, the company is going to create a 37,000-square-foot innovation and manufacturing hub — that’s around 3,400 square meters. It should be up and running within the next 18 to 24 months.

There will be 120 engineers, food experts and operators working there and producing tens of thousands of pounds of cultivated meats.

“In parallel, we are working hand in hand with the food safety authorities and agencies to obtain regulatory approval and bring our product to market in the safest conditions in several geographies like Singapore, the U.S., the U.K., and the E.U.,” Morin-Forest said.

Today’s news comes a few weeks after Standing Ovation raised $12 million to develop an animal-free casein for use in cheese. Meatable also recently showcased its synthetic sausages. In other words, cultivated meat is quickly becoming a competitive industry.

Sooner or later, those companies will start competing with each other once they diversify their product portfolio. “We continue to work on expanding our portfolio of high-quality, sustainable meat products in poultry but also other species and we have several exciting announcements coming up,” Morin-Forest said.

Gourmey grabs $48 million to keep working on lab-grown foie gras by Romain Dillet originally published on TechCrunch

Wireless power company Emrod beams 550 W across an Airbus warehouse

In our wireless world, wires are still the best way to move electricity from A to B. Wires are almost always cheaper and easier, at least from a technical perspective, but there are instances where wires may not be an ideal solution.

For lazy people charging their phones — including yours truly — a wireless charging pad is nice to have. For people on remote islands, wireless power could be transformative. Same with space-based solar power, a proposed type of power plant that relies on wireless power transfer to beam energy from orbiting solar panels down to Earth.

Space-based solar power is why the European Space Agency and Airbus have taken an interest in wireless power transfer. Both organizations think that space-based solar power could be the next big thing. Or one of the next big things. Or at least a thing. Which is why the pair teamed up with New Zealand-based startup Emrod to demonstrate a wireless power transfer system in Munich last week.

Wireless power company Emrod beams 550 W across an Airbus warehouse by Tim De Chant originally published on TechCrunch

Sixt to buy 100,000 electric vehicles from China’s BYD

Car rental company Sixt said Tuesday it intends to purchase more than 100,000 electric vehicles from Chinese automaker BYD for its European fleet between now and 2028. Sixt has initially only committed to buying “several thousand” EVs, the first of which will be delivered this year, the company said in a statement.

Sixt said it will first deploy its new BYDs to Germany, France, the Netherlands and the U.K. in the fourth quarter of 2022.

The agreement comes a couple of weeks after competitor Hertz announced plans to order up to 175,000 General Motors EVs over the next five years. Hertz has also signed deals to buy thousands of Polestar and Tesla vehicles in order to reach its goal of a 25% EV fleet by the end of 2024.

blue BYD Atto 3 electric vehicle SUV on city street

BYD’s Atto 3 electric SUV. Image Credits: BYD

Sixt’s deal with BYD is in service of its own sustainability goal — the German car rental giant hopes to electrify 70% to 90% of its fleet in Europe by 2030. By the end of 2022, Sixt has promised to offer 20 new electric and plug-in models, “including a range of Audi, Opel, Renault, BMW, Peugeot, Tesla and now BYD,” according to a Sixt spokesperson.

On BYD’s end, the partnership with Sixt is the company’s first with a car rental firm in Europe. The Chinese automaker has, over the past couple of years, made a concerted push into Europe, beginning with the launch of the Tang electric SUV in Norway in 2020. Last week, BYD shared presale pricing for three EV models it will sell in Europe: the Han sedan and the Tang, each for €72,000, and the Atto 3 SUV for €38,000. It’s the last one, the Atto, that Sixt will initially be buying, according to both companies.

Sixt to buy 100,000 electric vehicles from China’s BYD by Rebecca Bellan originally published on TechCrunch