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Wireless Technologies

Agritech's big opportunity in Asia

Agriculture is the next traditional industry to be greatly shaken up by technology, whether it’s through smartphone apps, robotics, or the Internet of Things (IOT). Investors have noticed too.

In 2014, $2.36bn was invested in agricultural tech (Agritech or AgTech), detailed in a report from AgFunder’s 2014 year in review investing series. And some of the biggest areas for investment were in bioenergy, food e-commerce, and soil and crop monitoring tech.

Of these big investments and burgeoning fields like smart hardware and robotics, the most activity was seen in North America but Asia is proving to be fertile ground for AgTech over the years. Along with AgFunder’s mid 2015 report, India is emerging as a strong destination for investing.

India’s potential

While India has been pushing for a shift towards greater manufacturing under its Make In India campaign, including a recent deal with Foxconn and Xiaomi, agriculture is still a huge part of the country’s economy. Almost half of the country’s employment is in this area. The sector’s contribution to GDP has faltered in recent years but food production has grown. 

The country has several high profile agricultural research institutes and universities which in recent years have been fostering commercial growth for agritech start-ups through incubators and other entrepreneur programs, such as Anand Agricultural University and the Indian Agricultural Research Institute.

In late 2014, a group of agricultural research institutes published a report [PDF] into the effectiveness of start-up incubators targeting agritech businesses and found that more than 100 technologies have been successfully commercialised thanks to the programs such as these.

VCs have caught on too. In September, CB Insights published new stats on the growth of agricultural tech start-ups that are beginning to make a dent in the massive traditional farming industry. Among the VCs that were most prevalent was Omnivore Partners, headquartered in Mumbai, which focuses on agriculture and food business investments.

Earlier in 2015, the firm invested in Maharashtra clean tech start-up Ecozen Solutions, which develops solar irrigation and micro cold storage systems, and in 2014, with weathering monitoring tool Skymet.

The latter features in both of AgFunder’s reports after it secured $4.5 million in financing in 2014.

“AgTech is worth investing in because people will always need to eat! Moreover, what they want to eat and where they want it to come from is changing rapidly,” Omnivore Partners’ Mark Kahn tells IDG Connect. “Finally, climate change, water stress, and other resource limitations are putting huge pressure on agricultural systems worldwide, creating opportunities for innovators who can address those problems.

“AgTech has the potential to radically increase the productivity of Indian farms while at the same time making them more sustainable and increasing the earnings of farmers,” he says.

Opportunities in South East Asia

India may be a potential hotbed for farming and agriculture technology, thanks to the sheer size of the industry in the country, but throughout South East Asia, opportunities have blossomed for several start-ups.

“We’ve seen deal flow in Indonesia and there seems to be a growing AgTech start-up scene in Singapore, focused on serving the region,” explains Kahn. “We see very little early stage activity in Chinese agriculture, and we hope that changes soon.”

Indonesian start-up CI-Agriculture has taken on a heady task of equipping Indonesian farmers with the tech know-how they need to improve their yield and overall efficiency. This involves the deployment of hardware-like sensors, robotics such as UAVs, and big data analytics to make sense of it all.

The “precision farming” start-up’s roots lie another company called Mediatrac, a big data analytics company, and formed from a desire to bridge a gap between the traditional subsistence level industry and the burgeoning tech world.

Precision farming involves the deployment of new smart technologies like sensors to monitor crop health and tracking weather patterns for efficient managing your farming schedule.

Agri-drones take to the skies

Drones have become popular among the agritech industry too. Singapore’s Garuda Robotics, a drone start-up, has ambitious plans for the use of UAVs in several industries but farming and agriculture is a particularly ripe opportunity as drones can allow farmers to monitor crops from the sky and identify irregularities.

Drones have for a long time had massive potential in the farming industry. In January 2014, a report tipped precision agriculture as the key to driving the adoption of drones among civilians and since that time one of the industry’s biggest manufacturers DJI has continued to force itself into the mainstream.

The Chinese drone maker has begun spreading its wings beyond drone hobbyists into various industries. In May, it signed a new deal with Batian, a Chinese fertiliser production giant.

The deal received little or no coverage in the English-speaking tech press but the agreement will see [Chinese] the two companies establish an “agricultural UAV application service system” covering a wide field of farming functions.

According to Even Rogers Pay, former chief product officer at Smart Agriculture Analytics and now based in China, the deal will lead to the development of an “agricultural UAV management system for agrochemicals, fertilisers, and seed products designed for aerial application, as well as a platform to collect and analyse climate, soil, pest, and natural disaster data.”

“The agreement also covers trainings and finance, including a potential leasing system,” she writes.

Agriculture appears to be factoring into DJI’s long term strategy. The Chinese company recently secured a $75 million investment from Accel Partners, which will go towards developing a new software platform as well as collaboration opportunities for outside developers.

DJI will invite developers to create new software for specific uses with its drones, including applications in mining, oil and gas excavation and of course, agriculture.

There are plenty of start-ups in Asia innovating in agriculture and more venture capitalist interest growing and with that, the field only looks primed to flourish in the coming years.

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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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