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2019 Food & AgTech Investor Sentiment Report Summary

Core Content

This report provides insights into the sentiment and investment trends in the Food & AgTech sector, based on surveys and interviews with 50 top investors globally. It highlights the most promising categories, key regions, and challenges in cross-border investing.

Main Points

• Beyond Meat IPO Spike: The company's 734% stock price jump in 2019 was a major turning point for the industry, drawing attention from mainstream investors.
• Sector Funding in 2018: Total funding for AgriFood Tech reached $16.9B in 2018, showing strong growth in the sector.
• AgriFood Market Size: The global AgriFood market is valued at $7.8T, indicating the potential for innovation and investment.
• Investor Sentiment: AgBiotechnology is the most exciting category for 2020, with 58% of investors expressing interest, slightly ahead of Innovative Food (56%).
• Overhyped Categories: Online Restaurants & Meal Kits (54%) and eGrocery (40%) are seen as overhyped by investors, due to challenges in unit economics and competition from Amazon.
• Investor/Founder Dynamics: 'Route to Market' is the biggest challenge for founders, and 'Lack of Local Due Diligence' is the top barrier for international investments.
• Deal Flow: 66% of dealflow comes through 'Warm Intros', and investors review an average of 78 companies for each investment.
• Global Outlook: Asia is the region with the highest investor excitement, especially India (12% of investors), with 47% of surveyed investors interested in it.
• Investment Categories: The report breaks down the sector into 14 categories, with a focus on AgBiotechnology, Farm Management Software, and Innovative Food.
• Cross-Border Investing Challenges: Four key issues hinder international investments: lack of local due diligence support, government regulations, lack of quality deal flow, and lack of legal protection.

Key Findings

Top 10 Stats

• Asia is the most exciting region for the future (57% of investors)
• India is the most exciting country (12% of investors)
• AgBiotechnology is the top category for 2020 (58%)
• Innovative Food is the second most exciting category (56%)
• Online Restaurants & Meal Kits is the most overhyped (54%)
• eGrocery is the second most overhyped (40%)
• Route to Market is the biggest challenge for founders (66%)
• Warm intros are the primary source of dealflow (66%)
• Team skill gaps are the top reason for rejecting deals (53%)
• International deal sentiment is growing but 'Lack of Local Due Diligence' is the main obstacle.

Investment Categories

• AgBiotechnology: Includes genetics, microbiome, breeding, and animal health.
• Innovative Food: Covers cultured meat, plant-based proteins, and novel ingredients.
• Farm Management Software, Sensing & IoT: Focuses on data capture, decision support, and big data analytics.
• eGrocery: Online stores and marketplaces for ag products.
• Online Restaurants & Meal Kits: Includes meal delivery services and restaurant tech platforms.
• Other Categories: Include Farm Robotics, Bioenergy & Biomaterials, Mildstream Technologies, Novel Farming Systems, etc.

Regional Insights

Asia

• Most Excited Region: 57% of investors feel Asia is the most promising.
• India: 12% of investors see India as the most exciting country.
• Growth Potential: India's large cultivable land, inefficiencies in the supply chain, and a new generation of entrepreneurs make it an attractive market.

Europe

• Investor Sentiment: 60% of investors are interested in international markets.
• African Investments: European investors are less interested in African markets compared to US investors (23% vs 8%).
• EU Strengths: The EU's single market and progressive agricultural policies support innovation and investment.

North America

• US Investors: More likely to invest internationally (66% vs 56% in Europe).
• Global Portfolio: US investors tend to focus on Europe (71%) and Latin & South America (72%).

Investor/Founder Relations

• Route to Market: Founders struggle most with this aspect, which is a key focus area for the Field Academy program.
• Team Skills: Investors often reject deals due to a lack of key skills or experience.
• Network Importance: Warm intros are the main source of dealflow, highlighting the importance of investor networks.

Challenges in Cross-Border Investing

• Lack of Local Due Diligence Support
• Government Regulations
• Lack of Quality Deal Flow
• Lack of Legal Protection

Conclusion

The report emphasizes the growing interest in AgBiotechnology and the need for founders to focus on 'Route to Market' and team capabilities. It also highlights the potential of emerging markets, particularly in Asia, and the importance of cross-border investment strategies. The global nature of Food & AgTech is underscored, with a call for continued innovation and collaboration.