Agriculture technology (agtech) start-ups offer great opportunities for a predominantly agricultural country like Thailand and it is one of the areas global investors are eyeing to invest in.
Andrew Lai, co-founder and accelerator director of SproutX, said that agtech and food-tech are among the high-potential fields today. According to McKinsey, agriculture was ranked as the world’s least digitised industry. Agriculture has more opportunities than any other industries for digitisation and improving productivity. Agri-food has become a global trend.
“It is real disruption happening in food and agriculture today; it is not something coming up in the future, and not something that is happening in a different industry,” said Lai.
The agri-food start-up sectors vary from biotech, food e-commerce, Internet of Things and software. Consumer technologies have enormous potential to transform smallholder farming.
“Around 40 per cent of the world’s labour force is engaged in the agriculture sector and many of them are unbanked. They do not have a bank account. They cannot access financial services. AgUnity is an agricultural unbank. It provides free smartphones to farmers who can record their data. Based on their data they can be provided loans, as that would reveal their production yields, profit and risk,” Lai said.
Another case is Sundrop, which is growing tomatoes in the desert. It is a global leader in sustainable agriculture, growing fresh fruits and vegetables using renewable inputs.
Asia Pacific is most impacted by food security. There are more people living in the Asia Pacific region than outside the region, while most agri-food start-ups – around 62 per cent – are in the United States.
Sean Trairatkeyoon, chief executive officer and co-founder of JuiceInno8, a deep-tech start-up with focus on food biotechnology space, said that the number of deals in food/agtech space in the past five years was rising.
As an agricultural nation, and to launch a foodtech and agtech revolution, Thailand requires a huge leap. As the second-largest exporter of sugar and rice and the third-largest producer of shrimp, there are only about US$500,000 (Bt16.6 million) worth of food/agtech start-up investment and there is only one deal. None of them is a food/agtech accelerator.
Meanwhile, in the United States, as the world’s largest producer of corn and soy, the value of food/agtech start-up investment is over US$2 billion since 2013.
There are over 300 deals in food/agtech start-up investments and more than 15 food/agtech accelerators.
Trairatkeyoon said that the government and organisations in Thailand should refocus themselves to see the potential of food-tech and agtech. There are only two industries in which Thailand has a clear advantage – tourism and food and agriculture.
“If Thailand wants to drive forward in the next few years, there is a lot more space in future food for Thai companies to grow,” said Trairatkeyoon.
Lai said that SproutX invests in many areas of agricultural technologies. In terms of competitive advantage for Thailand, obviously there are a lot of agriculture areas.
“Most of our portfolio is actually Internet of Things digitising the farms. But now we are open to anything, software and solution stuff and Internet of Things that help people organise what they are doing, or insect farming. Another one is robot,” said Lai.
Currently, he said, SproutX has invested in 19 agtech start-ups, mostly from Australia. But it is creating new fronts, specifically in Southeast Asia, where it is looking at hundreds of new high-tech start-ups in Southeast Asia and Asia in general.
“We are already the most active high-tech investor in the world and we think the future is full of opportunities. There are not many players here currently. So, it is a great opportunity for us,” said Lai.
He said SproutX positions itself as an ecosystem builder. Building top agri-food companies involves building an ecosystem, including agri-food community via event and hackathons; pre-accelerator and workshop; and accelerator.
“We are the most active agtech investor focusing on early stage. We are the only consistent agtech early-stage investor in the Asia Pacific, helping start-up teams from ideation through to international scaling,” said Lai.
SproutX’s model is to be the first investor and to continue investing in later stage rounds as a follow-on investor. The SproutX Venture Capital Fund has a 10-year term.
Meanwhile, Leon Ge, assistant vice president of ID Capital, a Singaporean venture capital, said the world faces the challenge of food shortage in the future and high technology is needed to produce food for every single person in the world.
“We look for disruptive technologies for agriculture and food industry,” said Ge.
Joseph Zhou, partner at BitsXBites, a food-tech accelerator venture capital in China, said that BitsXBites is China’s first food-tech accelerator and venture capital, established in 2016. It invests from the early stage – from seed all the way to series A.