Article
From Agriculture to AgTech
An industry transformed beyond molecules and chemicals
An unseen boom in agricultural venture capital investment leads to a major disruption and foreshadows the millennial shift from family farms to smart “food factories”.
Today’s agricultural industry is on the verge of turning into a high-tech industry, as the growing number of agricultural startups and investors shows.
Reasons for the millennial shift
Disruption driver No. 1
Global megatrends like a growning population, societal and demographic changes, smart agricultural technologies or the globalized trade of crops, clearly intensify the transformation.
The global megatrends will lead to a disruptive transition in the next 5-10 years, in interplay with more industry-specific change accelerators.
Disruption driver No. 2
The agricultural disruption will be accelerated by new consumer preferences, emerging technologies and changing firm and value chain configurations, leading to new challenges for agricultural players.
While the intensity of the impact varies, most change accelerators will happen in short- to medium-term.
Growth opportunities
As a consequence of the identified disruption drivers, the agricultural ecosystem faces new challenges, from which three significant growth opportunities for current and future players can be derived:
- Improving yield efficiency
- Increasing supply chain efficiency
- Decreasing complexity along farmers`value chain
The right time to invest in AgTech
The fourth agricultural revolution is taking on steam - three reasons why now is the right time to invest and lead the disruption:
- Unseen, rapid growth:
AgTech is not on the radar of traditional investors yet, but investments grew at 63% CAGR from 2010–2015, like FinTech. - Low-hanging fruit:
existing players are willing to invest 10-15 years and up to $250 million per product launch, while innovators are finding lean solutions and going for low-hanging fruit. - Huge market potential:
by tapping into the large 3 trillion dollar global agricultural market, investors can expect high scalability and significant ROI.
The AgTech disruption is taking place in multiple innovation fields simultaneously. Innovators are offering specialized solutions ranging from direct delivery services through satellite imagery to automated indoor farming.
To be ready to harvest, have your GrowthPath® strategy prepared.
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