Food/Agtech An Investment Thesis

1. FOOD & AGRICULTURE
AN INVESTMENT THESIS
MATTHEW BEDICK
MATTHEW.BEDICK@GMAIL.COM

2. Unsustainable Agricultural Model
 Monocultures are eroding biodiversity among both plants
and animals
 Soil is eroding much faster than it can be replenished
 Water is consumed at unsustainable rates

3. Problems in our current Agricultural
Model
 Monocultures are eroding biodiversity among both plants and animals
 Monocultures provide vulnerabilities to the supply chain
 Disease
 Loss of other plants/animals to the food chain
 Plants and animals selected due to predictability of growth under
particular conditions
 Global warming not just causing higher temperatures, but more
unpredictable conditions
 12 Plants provide 75% of total food supply
 15 Mammals + Birds provide 90% of livestock

4. Problems in our current Agricultural
Model
 Soil is eroding much faster than it can be replenished—taking with it
the land’s fertility and nutrients that nourish both plants and those
who eat them
 Each year, an estimated 24 billion tons of fertile soil are lost due to
erosion
 It takes approximately 500 years for 2.5 cm layer of fertile topsoil to
form under agricultural conditions
 On a global scale, around 10 - 20% of drylands and 24% of the world’s
productive lands are degraded

5. Problems in our current Agricultural
Model
 Water is consumed at
unsustainable rates in many
agricultural areas
 Agriculture responsible for 70% of
freshwater usage
 Increase in water demand of 55%
by 2050
 Increased urban population
directly correlates to increased
demand for meat, itself water
intensive
 1000 gallons for 1 gallon of milk
 440 gallons for 1 pound of beef

6. Parallels to Renewable Energy
Investment
 Broken Long Term Model
 Focused on short term profits and growth at the expense of long term
health and sustainability
 Same Setbacks
 Global Warming causing volatility in commodity prices and in turn
uncertainty in the underlying economic model
 Without Change Collapse of the system isn’t fantasy
 By 2050
 Additional 2.25 Billion people in urban centers
 5 Billion more people on earth
 Water Usage ⬆️ 55%

7. Food & Agriculture Investing In Infancy
 Venture funding in the agriculture space
has risen from $400 million in 2010 to $4.6
billion today
 Agriculture historically slow adopter of new
technologies
 Few liquidity events
 Agriculture has largely been dominated by large
companies
 Agtech = new way of doing business

8. Why Now?
 Agriculture represents $7.8 trillion
industry, or ~10% of global GDP
 Minimal penetration into even the most
high profile/best-funded subsectors
 Farms increasing technology investments
even with falling commodity prices and net
income
 Increased demand for impactful
investments due to shifting mindset on
importance of sustainability in portfolio
construction

9. The Landscape – Subsectors (1/2)
Data from Slides 9-14 Pulled from Crunchbase, Agfunder

10. The Landscape – Subsectors (2/2)

11. Proof of Concept – Alternative Protein
Ripple Foods
 Overview: Ripple Foods produces a pea based dairy alternative.
Their products are less intensive on the environment, contain
more protein, and less sugar.
 Funding: Ripple Foods have raised $44 million over two rounds.
Investors include GV and Khosla Ventures.
 Opportunity: Milk alternatives have been gaining market share
due to concerns of milk’s nutritional value and increasing prices

12. Startup of Interest – Smart Equipment &
Hardware Amber Agriculture
 Overview: Amber Agriculture helps farmers monitor and
manage the condition of their crops in storage through a
system of sensors. Farmers can leverage the sensor data to
make changes in real time to conditions like temperature in
humidity.
 Funding: Amber Agriculture has raised two rounds. Key
investors include SOSV.
 Opportunity: Food production consumes 10% of the total US
Energy Budget, yet 40% of what gets produced ends up getting
thrown out due to inefficiencies in production, harvesting,
storage, packaging, distribution, and consumption.

13. Proof of Concept – Decision Support Tech
Granular
 Overview: Granular provides a enterprise management
platform for farms to aggregate data to one location
 Funding: Granular has raised $25 million over two rounds. Key
Investors include Andreessen Horowitz, GV, Tao Capital
Partners, and Khosla Ventures.
 Opportunity: Enterprise software represents a $300 billion
market. The current market is ~10% penetrated. Agriculture is
a slower market and has shown recent willingness to spend on
technology even when net income is down.

14. Startup of Interest – Drones & Robotics
Abundant Robotics
 Overview: Deliver robotic systems for the hardest jobs in
agriculture
 Funding: N/A
 Opportunity: Wages, salaries, and contract labor expenses
represent roughly 17 percent of total variable farm costs and
as much as 40 percent of costs in labor-intensive crops such
as fruit, vegetables, and nursery products.

15. Startup of Interest – Waste Tech
Copia
 Overview: Easily connect businesses with surplus food to
nonprofits in need. They help businesses reduce disposal
costs and save money on taxes.
 Funding: Copia has raised $140k over two rounds. Key
investors include Y Combinator.
 Opportunity: Food businesses operate on razor thin margins.
Allowing for even a % in savings could mean the difference
between sustainability and closing down.

16. Sources
Organic
Consumers
Harvard School of
Public Health
Agriculture
Marketing
Resource Center
Organic
Consumers
Forbes Worldwatch
Institute
Ajit Niranjan TechCrunch BCG
Sustainability:
Science, Practice
& Policy
University of
Illinois
Federal Reserve
Bank of Atlanta
Kansas State Newco Shift Takepart
Union of
Concerned
Scientists
Pew Charitable
Trusts
Food and
Agriculture
Organization of
the United Nations
Bloomberg Vishal Vasishth OECD
Scientific
American
Scientific
American
New Haven
Register
Foodtank Natural Resources
Defense Council
Union of
Concerned
Scientists
Agfunder