Growth is inevitable in life. Children grow, companies grow, ecosystems grow. Watching a development community grow and flourish is extremely interesting, especially given the way in which this growth is likely to literally change the world, one small piece at a time. So it is with the Agritech ecosystem. Over the last twelve months we have seen a sudden, noticeable, and substantial growth of Israeli Agritech and Foodtech innovation, in both size, funding and capabilities.
Israeli Agritech is really coming into its own. While Israeli innovation in agriculture is hardly a new thing, the idea of agricultural technology as much as the sector itself, is developing and evolving into a mature and well-established domain. To this end, Start-Up Nation Central has created a supplementary edition of its Finder Insights series for the Agritech sector, which you can download.
Israeli Agritech approaches agricultural issues from multiple angles, with ongoing investment diffused across the sector, and is increasingly characterized by diversity of supported, growing entrepreneurial innovators. These entrepreneurs are increasingly pivoting to other approaches to expanding agricultural needs, by creating new divisions within their current companies and even founding new companies. This also gives the Israeli Agritech ecosystem something of an advantage over other topnotch global tech-hubs that have a more specialized approach. Once characterized by start-up companies with innovative niche ideas, we are now seeing subsectors represented by groups of start-ups.
The Agritech ecosystem is suddenly seeing a hitherto unprecedented and tangible growth. More than 40 Israeli investors have either invested or shown strong interest in the sector – there is a growing number of VC funds focusing solely on Agritech as well as a general increase in interest of impact investors who are joining the club as the perception of AgriFoodTech as a significant and central topic grows. Additionally, the level of cutting-edge innovation by Israeli Agritech start-ups is such that leading software investors are being attracted, such as Bessemer and Vertex. Capitalizing on this positive trend, the Agritech community Grow.IL, a joint venture by Start-Up Nation Central and the Israeli Innovation Institute, have produced the first ever Israeli Ag-Tech investors map and booklet, which displays the local landscape of investors relevant to this field. The map includes funds which are focused solely on Agritech, as well as those which are cross-sector but have invested in Agritech companies, or are interested in entering this blossoming field of investment.
The Kibbutz Re-Generation
One of the defining movements of the early stages of Israel were the kibbutzim – the communes at the forefront of pre-state Agritech, largely responsible for draining Israel’s swamps, making the desert bloom, and initiating the can-do approach to agriculture which characterizes the Agritech ecosystem to this day. While recent years saw the kibbutz movement somewhat challenged, recent involvement of the Yakhin Impact accelerator (see below), the Mashtela Kibbutz Movement Start-Up Fund, and Magna Growth Investments (MGI), who are establishing an investment group in Agri-Food-Tech as a joint venture with the Kibbutzim, is leveraging opportunities between them and Israeli start-ups.
Yakhin Impact, an accelerator dedicated to advancements in agricultural technologies that could wield socio-economic benefit, was founded in January 2018 by TechForGood and the Yakhin Group, owners of large tracts of farmland in Israel. The accelerator offers mentorship, office space, and investment, and taps into TechForGood’s global network (currently including Singapore and Thailand), as well as access to beta-sites apportioned by the Yakhin Group for portfolio companies. They say timing is everything, which is very much the case with Yakhin Impact, as 88 seeded Agritech companies now have a local resource devoted to all aspects of building their business.
Kumbaya: The Community of Agriculture
The Agritech and Foodtech ecosystems are very healthy and continuing to develop well, as the facts, figures and statistics clearly show. In fact, according to the Start-Up Nation Central Supplementary Finder Report, 2017 was Israeli Agritech’s most highly funded year to date.
Over the last few months, several Agritech-related events were held with the aim of facilitating a better-established connection between the different players within the Israeli innovation ecosystem by providing the opportunity to exchange a wealth of knowledge, tools, ideas and skills. Particularly notable was the establishment of Grow.IL, an Agritech-focused Israeli community that enables different players in the ecosystem to pool resources and work together. One of Grow.IL’s first undertakings was to host a workshop for early-stage start-ups to improve their pitch and budget-building skills, together with KPMG. Another significant happening was the 1 on 1 with the Big Ones event, also presented by Grow.IL, together with Deloitte, GreenSoil Investments, and WRL-BASF, where several growth-stage start-ups were invited to hear a number of noteworthy corporate entities give insights into the kind of innovative solutions that they need and were invited to pitch to them.
If all this were not enough food for thought, Agri-Food-Tech week is upon us. During this week, from May 7-10, Israeli innovation in Agritech and Foodtech will be on display in all its glory across several major events that showcase how technology meets agriculture, and the broad spectrum that is the food industry.
Organized over the course of a few days by many of the largest players in the local Agri-Food-Tech industries, Agri-Food-Tech week is an incredible opportunity to experience everything that’s on offer. The unique set of events that are slated to take place are aimed at everyone with a vested interest, be it entrepreneurs, investors, industry executives, government officials, researchers or service providers – and include Foodtech.co.il, Agrivest and the Agritech Exhibition and Conference. In addition, there will be a number of various community events, all with the purpose of encouraging collaboration and innovation to flourish. To call it a set of excellent business opportunities is an understatement. See here for more information about Agri-Food-Tech week.
In other words, Israeli Agritech is growing up. It’s also adding up. 2017 was the sector’s best year for funding ever, with $189M garnered from nearly 40 deals. The second half of the year showed that things were continuing on the same trajectory, with a whopping $62M raised in a single quarter – the largest amount for one quarter to date. All this points to a young but rapidly maturing sector, well on the way to global relevance.