Reuters — Investor backing for agriculture technology startups cooled in the first half of 2016 after record global investment last year, according to industry data released on Monday.
Funding from venture capitalists and others totaled US$1.8 billion through the first six months of the year, down 20 per cent from a year earlier, while the number of deals rose seven per cent to 307, ag investment platform AgFunder said.
The pullback was in line with the broader venture capital market, it said.
The decline also comes as weak grain prices put pressure on farmers’ incomes and corporate profits.
Investment slipped in the drones and robotics and food e-commerce categories, while soil and crop technology experienced an uptick.
The dip in ag-tech financing follows 2015’s record-high US$4.6 billion investment, according to Ag Funder. The industry wants to use sophisticated tools such as seed traits, drones and weather sensors to drive yields and profits higher.
“It’s an area we’re keenly interested in,” said Matt Bell, principal of Cultivian Sandbox Ventures, whose investments include Harvest Automation, a company that makes mobile robots for tree nurseries.
Near Kitscoty, Alta., farmers may do double-takes later this year as Brian Headon’s self-driving tractor plows his corn fields with the driver’s seat empty.
Headon will spend C$250,000 retrofitting his tractor with a motor system made by Autonomous Tractor Corp. (ATC) that will allow it to drive by itself, using a global positioning system.
“To not even have an operator in there almost makes me more comfortable,” said Headon, who is also a Western Canada distributor for ATC. “Because I’ve taken away the human aspect.”
The need for safeguards is an obstacle to widespread adoption of self-driving tractors, said Matt Rushing, vice-president of product management at Agco Corp.
“As we start to take the operators off these machines, you’re going to have questions about, ‘Can the machines go rogue?'” Rushing said.
California-based Blue River Technology expects “smarter” machines to catch on steadily.
Farmers use its “See + Spray” technology on 10 per cent of U.S. lettuce fields, said Ben Chostner, vice president of business development at Blue River, whose investors include Monsanto and Syngenta.
The box-shaped robot, pulled behind a conventional tractor, pinpoints weeds to douse with a lethal chemical.
“People have been dreaming of Jetsons-like futures since the ’50s,” Chostner said. “The technology is really starting to emerge.”
— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Additional reporting for Reuters by Meredith Davis in Chicago.