Improved Communication Helps AgTech Start-ups Compete for Investments in 2021
As adoption of new technology continued from plant to plate, AgTech investment remained strong in 2020 despite challenges, writes Jennifer Goldston at CropLife. While many investors focused first on ensuring existing portfolio stability, opportunities for start-ups to attract new investors existed but within a more competitive virtual ecosystem. While 2021 brings renewed optimism, the virtual shift requires management teams to implement a strategic communication plan that amplifies more relevant and impactful networking activities.
The confluence of shifting market demands, competitive investment landscapes, and new due diligence processes will continue to impact investor relations in 2021. In their October report, Finistere Ventures found that 82% of late stage deals were in crop protection inputs management and indoor ag; illustrating response to Millennial/Gen Z food demands, climate change, and the pandemic. In addition, CropLife’s recent AgTech Venture Capital Roundup reported that of all the [late stage] capital raised last year, 61% was raised by just 28 companies. To compete for available funds, start-ups must clearly communicate their relevance.
For example: seemingly overnight the hard-fought data science space changed as demand for applied analytics became urgent due to coronavirus restrictions and consumer demand. No longer could ag data just be big, it had to be actionable.
“Market demand shifted from data capture solutions to technology that connects insights to action,” said Vonnie Estes, vice president of technology at Produce Marketing Association. “For example, while sensors have been used to collect data on everything from grain to honey, companies able to show how they redeployed this technology to solve labor management issues fared much better last season.”
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Responding to these shifts is critical for start-ups. Yet, a challenge both investors and entrepreneurs reported was the ability to effectively communicate in a virtual environment.
Estes continued, “Within ag and food tech, I believe simple elegant solutions that deliver ‘half steps’ will be more attractive today versus big, bold complex technology. It’s up to start-ups to communicate how they are delivering insights verses just interesting technology.”
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