By Anthony Willmott
World Agri-Tech brought together some of the world’s leading startups, business minds, disruptors and the partners and investors who are helping scale them. We were on the ground at the 2023 conference; here are the key DAS insights and takeaways from San Francisco, in a fascinating week for startup more broadly.
- Agri-tech is too broad a term and fails to capture the complexity and fragmentation of the industry. Whether it’s cropping, grazing or US-style “ranching”, the sectors that make up agri-technology require differentiated technology - whether that’s meeting the needs of farmers, suppliers or buyers.
- The value story must be strong enough to drive adoption, and the problem must be big enough for people to bother. Agri-techs must be super clear on the problem they are solving, and if they want to be more than a niche solution, cross multiple verticals.
- The practical challenges of sequestering and trading carbon are becoming clear. A farmer essentially only has 40 years’ or seasons to deliver a crop and while carbon soil sequestration can deliver co-benefits in yield and sustainability, farmers need to feed their families. At the same time, there’s increasing recognition that farmers will need to return carbon credits to meet the needs of their customers, buyers, suppliers and financiers.
- There is increasing interest in providing risk and ESG measures to all players in the supply chain. Some players are working in this space but it’s early days. Similarly, a commitment to sustainability is not enough to drive adoption.
- Agri-techs need to get their house in order and in an ideal world, have a path to profitability. The next 18 to 24 months will be challenging if you’re planning to raise capital. The balance or flip side is that if you become EBIT positive, you will likely be valued on a multiple of EBIT instead of future revenue, so the growth rate will likely stay high for the companies and the investors who support them.
- Farmers will adopt technology if it has true value, including financial value. The world is awash with exciting, game-changing on-farm technology - there has never been better, more ground-breaking agtech. Connecting that agtech to gain, including financial gain, is key.
- Agri-fintech is still in its early innings. Whether it was the “De-Risking Finance to Transform Agricultural Production” discussion or other agri-fintech related showcases, agri-fintech is an equally fragmented and complex market. There is increasing recognition that expansion to credit is vital and that the credit scoring process for farmers, which is similar today to consumers, must shift. Here, inputs are part of the story, as recognised in the excellent Agri- Fintech newsletter.
- There is huge optimism about where agri-tech is headed, over and above macroeconomic and fast changing market shifts. Arriving in San Francisco off the back of the evolving SVB crisis, I wasn’t sure what the mood would be like. As the ever insightful Shane Thomas points out, collaboration - and a renewed focus on collaboration - stood out. DAS is bullish on collaboration and places priority on mutual value outcomes.
I feel very fortunate to have attended World Agri-Tech. Nothing energises more than being face-to-face with the best and brightest in the industry and this is a milestone we should mark. Thanks to all those I connected with and met, both new colleagues and friends alike. I am excited by the transformation possibilities of our industry - particularly through unprecedented levels of change and challenge. There was a huge number of people who turned up - the excitement and enthusiasm of being able to identify and execute on ideas, identify roadblocks and see clarity over and over again is fantastic to see.