Ag tech investments double in 2015 despite U.S. farm slump -study

Wed Feb 17, 2016 4:32pm EST
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By Karl Plume

CHICAGO Feb 17 (Reuters) - Investments in agriculture technology startups surged to a record $4.6 billion in 2015 despite a steep drop in U.S. farm income and slumping profit at farm-affiliated companies such as machinery producers and seed makers, according to a study released on Wednesday.

The investments were nearly double the $2.36 billion seeded by venture capitalists and others in 2014, according to the annual report from online food and agriculture investment platform AgFunder.

The jump came as net U.S. farm income is projected to drop for a third straight year and as industry stalwarts such as equipment maker Deere & Co and seed and agrochemicals company Monsanto Co face slumping sales and job cuts.

"There's definitely been a downturn in the broader market, but ultimately the direction of agriculture is going towards an more technologically driven future," said AgFunder CEO Rob Leclerc.

Investments in 2015 were also noticeably less American, as just 58 percent of deals were in U.S.-based companies, versus 90 percent in 2014.

Food e-commerce companies, including online grocers and meal delivery services, raised $1.65 billion in 2015, led by hefty funding rounds by COFCO subsidiary Womai, U.S.-based Blue Apron and Germany's HelloFresh.

The sector was by far the year's most active with 36 percent of total investment, leapfrogging 2014's top segment, bioenergy, which faced headwinds from weakening oil prices. The e-commerce segment's growth, however, could be limited by market saturation, Leclerc said.

Drones and robotics investments grew by 237 percent from 2014 and AgFunder pointed to a bright future for the segment as more growers are expected to use crop-scouting drones and various autonomous farm machines for data analysis and precision farming.   Continued...