Australia is on the edge of immense opportunity: GIN

The general manager of the AgriFutures Global Innovation Networks (GIN) has said despite last year's global investment downturn, the Australian agrifood sector shows signs of great promise.

AgFunder’s latest Asia-Pacific AgriFoodTech Investment Report 2023 [pdf] said Asia-Pacific agrifoodtech startups raised $6.5 billion in 2022, down 58 percent from the $15.2 billion raised in 2021.

“In the first half of 2023, some $2.6 billion has closed, a nearly 50 percent decline compared to H1 2022,” the report said.

“The overall decline doesn’t tell the whole story; investment in startups operating upstream in the supply chain – on the farm and in some primary production – raised noticeably more funding in 2022 and H1 2023 compared to the same period the year before,” the report explained.

Speaking to Digital Harriet Mellish, general manager of AgriFutures Global Innovation Networks said the finding reveals “that the Australian agrifoodtech ecosystem fared better than the broader Asia-Pacific and rest of the world during the downturn in VC investment.”

In a 2022 overview, Mellish said that Australian agrifood tech startups closed 38 deals in 2022, raising US$317 million, resulting in a 24.5 percent year-over-year decline.

This decline was “less pronounced than across the Asia-Pacific region, where investment totalled $6.5 billion, a much larger 58 percent year-on-year drop against a record-breaking 2021”.

Mellish also there were some “sizeable Series A rounds in Australia in the second half of 2022”, including cultivated meat startup Vow securing $49 million in November, and precision fermentation specialist Nourish Ingredients securing $29 million.

According to Mellish, In the Asia Pacific region, Australia placed fifth place behind India, China, Indonesia and South Korea in terms of investments by country.

Circling into 2023, Mellish said, “While regional funding levels in 2023 were down on 2022, the ecosystem is still very active with a similar number of deals closing during the first half of this year compared to H1 2022.”

“In H1 2023, Australia closed approx. $146 million in agrifoodtech funding,” Mellish said. 

“Upstream innovation, like Australian biologicals startup Loam Bio which secured $73 million in a Series B raising, is becoming increasingly popular with investors.”

“Loam Bio makes seed coatings that supercharge plants’ ability to capture and store carbon in the soil. It attracted investment from high-profile internationals like Lowercarbon Capital and Acre Ventures.

“In 2023 the percentage of Australian venture deals that included at least one international investor hit record highs across all funding rounds. An example is Loam Bio’s series B round which was co-lead by Lowercarbon Capital and Australian fund Wollemi Capital,” Mellish said. 

Mellish said, “A focus on engagement with producers to ensure there is a market fit for technology, and that it meets the needs of producers and the supply chain, is also important.”

Where Australia stands in the global field 

Compared to other countries Mellish said Australia’s food and fibre-producing systems “are unique because they’re entirely unsubsidised, which has driven producers and businesses to be highly innovative and forward-thinking.”

“It’s also fostered a robust and well-supported network of R&D corporations that drive research, development and adoption of innovative solutions relevant to the real needs of producers.

“Australia’s agrifood sector is highly innovative and resilient, making it fertile ground for the ideas and investment needed for the global agrifood tech and innovation system to realise its potential.”

Mellish said GIN has “three key programs working to deliver on our vision to position Australia as a global leader in agrifood tech”. 

It also has a producer technology uptake program (PTUP) which started in 2021 and supports producer groups to increase adoption of technology and innovation solutions on-farm. 

“In 2023, PTUP provided various tech adoption grants of up to the value of $100,000 to help producers and groups looking to take up agrifood tech in their businesses.” 

 “Combined, these three program areas help foster an agrifood tech ecosystem that is creative, innovative, and importantly relevant to and able to be adopted by industry,” Mellish said.

Mellish added, “Having the bright ideas is just one piece of the puzzle. For agtech to unlock real change and tangible benefits for the food production system, it needs to be adopted.”