Which trends will shape investment in animal agtech in 2022?
Ahead of the Animal AgTech Innovation Summit in San Francisco on March 21, we asked eight high-profile strategic investors, VCs and accelerators to share their investment predictions for 2022.
Key drivers for innovation include the need to reduce carbon throughout the supply chain, to detect and treat disease without antibiotics, and to offer greater transparency to consumers on sustainability and welfare.
Michael Helmstetter, Founder & President, TECHACCEL USA: “The realities we experienced as a society during the pandemic will no doubt influence how we look at animal agriculture going forward. I expect more investment in and focus on biosecurity risk and associated preparedness, especially with COVID-19 being zoonotic. Disasters like the 2018-2019 African Swine Fever outbreak in China are also influencing heightened focus. As a result, start-ups focused on digital biological monitoring, early disease detection, vaccines and therapeutics, and gene-editing will continue to see high interest from investors for many years to come.”
Mareese Keane, Co-Founder, OPENGATE, USA: “The consumer is looking for better information about how their food is produced. We are seeing lots of technology that gives points of insight for one aspect of production, e.g. environment, health or welfare. Going forward, I believe we’ll see more technologies that combine points of information and can build a better holistic story for the consumer. The business model for these technologies needs to assess who gains the most from these technologies. At this point in time, it is rarely the producer!
With labor shortages, there are more opportunities than ever for technology to help producers be more effective and profitable. However, start-ups still need to be laser-focused on bringing a strong financial value proposition to their users.”
Justin Sherrard, Global Animal Protein Strategist, RABOBANK, NETHERLANDS: “It’s already looking like sustainability will be a big driver of animal agtech in 2022, and in the sustainability field, carbon will be most in focus. Many prominent food retailers, foodservice companies and food manufacturers made commitments to reduce supply chain carbon in 2021, and this year they will start turning commitments into action. The opportunity for animal agriculture is to switch its relatively large carbon footprint from being a problem into a solution, and animal agtech can be the key enabler of this switch.”
Daniel Griffis, Investment Director, ADM VENTURES, USA: “Growing consumer demand for clean and transparent sourcing, sustainability, and precise and responsible animal feeding will accelerate innovation activities and investments within the animal agriculture industry. Animal agriculture start-ups can thrive by focusing on the customer. Know your audience, identify their problems, and deliver solutions with minimal up-front risk.”
Nicky Deasy, Managing Partner, YIELD LAB EUROPE, IRELAND: “I expect that sustainability is going to become increasingly important. The Methane Pledge will focus attention on methane-reducing technologies, whilst maintaining or improving productivity, and having a clear financial use case for farmers. How livestock farmers access carbon markets and carbon credits will also be important, along with scalable methane measurement technologies.
Start-ups need to find good investors, build their Board, build out a strong team, and bring on board seasoned advisers with industry networks, insight and relationships at the right level, of relevance to the company. They also need to have compelling science that is proprietary and defensible and be going after something unique.”
Stephen Murray, Animal Health Ventures Lead, MERCK ANIMAL HEALTH, USA: “Whilst there are ‘hot’ areas like carbon and emissions, the biggest opportunities are those that are focused on a real problem, executing well and with a great team. Knowing who is paying for your product and making sure that it works for them, in their environment.”
Aaron Schacht, President & CEO, MBRD / Former EVP, ELANCO, USA: “In 2022 I believe we’ll see concentration of innovation opportunities and therefore investment in three areas:
1) Finding more natural approaches to addressing disease challenges and looking for replacements for older technologies like antibiotics and other chemicals that will address concerns such as antimicrobial resistance and the environment.
2) New technologies to address the environmental impact of livestock production – waste and greenhouse gases
3) The use of digital instruments on the animal and on the farm to optimize, using advanced analytics and farm productivity.
Start-ups will thrive as larger capital pools focused on animal health emerge. Venture capital sources and appetite are limited in animal health, and I believe we’re entering an era where dedicated capital will make things better for entrepreneurs and innovators to advance their start-ups.”
Bor Boer, Principal, CONVENT CAPITAL, NETHERLANDS: “Consumer and regulatory pressure to contribute to a net zero carbon future, elimination of antibiotics in the chain, localization and animal welfare will drive investments towards those companies and initiatives that take this into account. This will be a driver across the chain from genetics, feed ingredients and production. Crossovers with technologies and products from other sectors will continue to drive change.”
For more insights into the trends and drivers that should shape your business strategy in 2022, don’t miss the ‘Crystal Ball Session: Attracting More Financial and Human Capital to Animal AgTech’ at Animal AgTech on March 21, with critical insights from: Mareese Keane, Co-Founder, OPENGATE, Aaron Schacht, President & CEO, MBRD / Former EVP, ELANCO, USA, Michael Helmstetter, Founder & President, TECHACCEL, Rich Shuler, Operating Director, PAINE SCHWARTZ, and Kate Danaher, Managing Director, S2G VENTURES.