InFarm & CEA led European sustainable agriculture investments in 2021

The Data Snapshot is a regular AFN feature that analyzes agri-food market investment data provided by our parent company, AgFunder.

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Controlled environment agriculture, or CEA, claimed more than half of all sustainable agricultural investment in Europe last year. But data from AgFunder and Invest-NL’s latest European Climate Investment special report suggests that investment in sustainable agriculture is underfunded and a huge opportunity for investors looking for climate investment angles.

Of the $9.2 billion invested in European agricultural technology last year, only 25% went to companies with technologies that can positively impact the environment. Sustainable agriculture accounted for 9.5% of investments in European agri-food technology.

Sustainable agriculture is defined

The report defines sustainable agriculture as technologies that can accelerate food production while protecting or improving planetary and human health.

An example from AgFunder/Invest-NL analysis: The AgXeed “autonomy-as-system” startup. Startup CEO Rienk Landstra explained some of them problems with current agricultural tools and practices.

“The weight of agricultural equipment… has compacted our lands. This is negatively affecting the biodiversity within the soil and the ability of plant roots to reach nutrients in the deeper layers of the soil. This irreversible process results in less productive fields,” he said.

“To compensate for this, farmers are using more chemicals and fertilizers. If we don’t change this, it will inevitably lead to erosion and eventually desertification,” he added.

AgXeed deploys autonomous “agbots” in the field that can perform tasks on the farm while staying below the soil compaction threshold.

Other sustainable agricultural technologies include sustainable crop inputs and protections, precision agriculture technology and CEA.

AgFunder’s investment categories most closely related to the category and to climate impact include: new agricultural solutions, innovative foods, robotics and agricultural machinery, as well as some agbiotech and biomaterials and energy.

The main offers of sustainable agriculture

In Europe, CEA startups topped the sustainable agriculture chart in 2021, raising more than half of the $900 million in sustainable agriculture investments made last year.

German vertical farming company InFarm claimed a third of that amount with two rounds of fundraising. Other notable CEA companies include Intelligent Growth Solutions (IGS) and Jungle France. [Disclosure: AFN’s parent company, AgFunder, is an investor in IGS.]

is a huge force, with startups in that space raising more than half of the $900 million Sustainable Agriculture companies raised in 2021.

Insect farming is also a force in European agri-food technology. Startups developing insect proteins – mainly for animal feed – grabbed 14.7% of the sustainable agriculture investment pie, followed by crop inputs (14.6%) and precision agriculture (12.4%).

As mentioned before, European investors are investing less in climate technology. Trillions of dollars are needed each year to meet the 2030 targets of the Paris climate agreement. Much of the seed capital that addresses acute climate challenges and supports technological developments must be sustainable capital—that is, financing that does not require short-term returns or immediate profitability.

One bright spot: while much of the tech sector is going through a downturn, investment in climate technology is steady.

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