How Ag-Tech Ripened Into a Growing Market
Client: Mercury Fund
With the rise of data-crunching agricultural software, farmers these days are digging as much in data as in dirt.
“It is as frothy as I have ever seen it,” Adrian Fortino says of the ag-tech software market. In 2012, as an investor with First Step Fund, Fortino invested in a seed round for FarmLogs, an Ann Arbor, Mich.-based developer of software to help farmers map and predict crop yields, rainfall and other essential data. “But in the course of the last three years, we’ve seen a dramatic explosion,” says Fortino, who now leads the Ann Arbor office of venture capital firm Mercury Fund.
That is due in part to an attitude shift among the farmers themselves. “You always have this adoption curve for technology, and ag is not any different,” Fortino says. “There will always be some people who operate on the basis of feel, but more and more people are moving away from farming by feel [alone].”
Investment in ag-tech in 2014 reached $2.36 billion, according to online marketplace AgFunder, and had already reached $2.06 billion by mid-year 2015. September’s Ag Innovation Showcase in St. Louis was the biggest and most diverse in the 6-year-old event’s history; organizers tallied that presenting companies raised $430 million.
Fortino says this suggests that industry development is adapting to macroeconomic trends. “If you look at the numbers, by 2050 we will need to double ag production to feed the world,” he points out.
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