Why are investors flocking to AgTech?

With investors and investments i guess there always are two sides (one very objective/rationale side and the other sentiment or some call it follower mentality or a rush).

I will make an effort to drop a few thoughts on the first part (objectivity/rationale bit):

  1. The agriculture supply chains are:
    1. very very inefficient (too many intermediaries with too little value add)
    2. produces shortest shelf-life products (with the exception of heavily processed products)
    3. dependent on external situations/conditions more than any other sector (climate, policy to name a few)
    4. Extremely regulated (there are rules for everything and most of the times these rules offer unfair advantages to a minority of powerhouses or rule breakers)
    5. Contributes significantly to sustainability challenges (greenhouse gas emissions, water foot print, safety issues, food waste etc. etc. etc.)
    6. the incentives are severely mis-aligned (in most cases farmers bear the highest risk with lowest returns)
    7. critical for fundamental existence {we (at-least true with me) can afford to forgo everything but not food}

The list can go on. From the context of Agtech opportunity this is the least digitized sector with possibly the lowest literacy {i say possibly because I have not looked at the real data/numbers so playing a bit safe here}. More than a billion people are directly and indirectly employed by the sector (the biggest employment sector by far).

The above factors must be high-level drivers for a great deal of rush from entrepreneurs and investors into this space. However, as a passionate learner of and follower of this sector i can say that the sector dynamics are quite complex to work and operate in and both entrepreneurs and investors should try and get a feel for the dynamics to contribute meaningfully to the sector and create positive business value for themselves.