According to reports, both high-tech and low-tech issues are plaguing farming enterprises around the world.
Insects and other issues that farmers have long faced are now being dealt with by these companies, as The Wall Street Journal reported on Thursday (May 25). Some of these companies have raised billions from investors.
According to the report, financing for the farm technology sector has fallen dramatically in this situation. The industry brought in a record $895 million during the first quarter of 2022. The WSJ reported that amount to be around $10 million thus far this year, citing data source AgFunder.
“Their business model was selling a vegetable, but they somehow described themselves as a technology company,” said Paul Sellew, CEO of Little Leaf Farms, a Massachusetts start-up that cultivates lettuce in cutting-edge greenhouses.
Sellew claimed that by putting day-to-day farming over expansion, his company has dodged the issues facing the industry. The company anticipates $100 million in sales this year and claims to be profitable.
The scenario is very different in the MENA (Middle East and North Africa) area, where companies — and ag-tech businesses in particular — are reaping a rich financial harvest, as PYMNTS reported earlier this month.
Last year, MENA and the wider Gulf Cooperation Council (GCC) region companies raised more than $3 billion in total funding as investors increased their investments in potential firms despite the global slump.
According to Simon Sharp, partner at Global Ventures, a MENA-focused venture capital (VC) firm, “We’re really seeing an upward trend in terms of the amount of funding that takes place, the number of VCs that are in the region, and the number of good startups that are around.” The firm’s portfolio includes businesses like Moniepoint (formerly TeamApt), Helium Health, and Zid.
Sharp told PYMNTS that because to the digitalization surge and rising consumer adoption and behavior, industries including HealthTech, EdTech, and the Future of Work—all of which suffered during the pandemic—have experienced a comeback in recent years.
Ag-tech is a crucial industry for the area since firms working in fields like last-mile delivery, warehousing, and fulfillment to increase food production and decrease food insecurity are becoming popular candidates for venture capital funding.
“The MENA region imports about 85% of its food produce, so that’s something legislation wants to change, and we’ve seen that trickle through in terms of startups that have emerged across the AgriTech value chain to try and solve that problem,” said Sharp.
