Proceedings

PR – 2015, THE YEAR AGRITECH INNOVATION TAKES OFF!

Sapin, V.


Abstract:

Investment in the agribusiness sector is rising exponentially these days and so is the rate of what is called Agritech innovation. This is due to well-known drivers such as the projected increase in world food demand, widespread urbanisation, shifts towards healthier nutrition, and scientific and technological advances. This is happening in a financial context where governments are increasingly cash strapped while some private companies are awash with surplus cash. Investors are also seeking higher returns than what is currently offered by real estate, bank deposits and stock markets.
The purpose of this paper is to a) Briefly identify some innovative agribusiness start-ups b) Analyse what makes them successful at attracting funding c) Identify potential risks and concerns and d) put forward recommendations regarding what may be needed for them to become real commercial prospects long term.
The research for this paper was conducted essentially through desktop reviews of institutional reports and reports from private equity funding platforms. We also searched academic papers on conceptual frameworks regarding value chain innovations and funding cycles and models.
Our findings are that there is an amazing number of extremely exciting, game changing, mind blowing, very creative agribusiness innovations being funded all over the world just now. All are making huge contributions towards our planet’s food security and sustainability.
Caution is needed however considering the inherent risks associated with agriculture. In addition, investors, producers and innovators all have different values and timeframes, which they need to be explicit about. Finally, although the context is ripe just now, societal values change constantly and so do economic contexts.
This paper discusses the positive impacts of the rise in the number of investments in agribusiness innovation in the current context. It also raises possible concerns if this context changes. It concludes by suggesting that proper due diligence and risk management strategies need to be put in place to prevent a potential Agritech innovation bubble and crash similar to that of the dot.com bubble.

Keywords: agribusiness innovation, capital ventures, agrifood ecosystems, societal expectations.

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Author(s): Sapin, V.

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Organizations(s): McGill University