Investment in Progress
Written by Johannes Raidl from i5invest, this blog entry summarizes all important facts and figures for this industry in Austria.
Austria’s AgTech market is rather small, yet very interesting and active. While it may not has the production capacity, the domestic demand or large-scale farming operations of some bigger countries such as Germany, it is very vibrant and technologically leading. In recent years Austria has been experiencing an ongoing uptick in the number of AgTech startups and we see several players able to succeed on an international level. This article delivers all must-knows for the vertical AgTech directly to your screen.
So let’s dive right in: In the end of 2016 i5invest spoke with leading European AgTech companies and summarized their findings in the AgTech Europe 2017 report (Download). According to the study, there has been a clear increase in the number of newly founded AgTech companies from 2010 onwards, which has been further supported in recent years by an increasing appreciation for Smart- and Data-based Agriculture. Overall, the industry has been growing steadily. Support for early stage companies (incubators, accelerators and early stage investors) has been gaining momentum throughout 2016 and 2017. The broader category of Smart Agriculture (Decision Support Technology, Smart Equipment Software and Hardware, Machine Learning) is one of the hot-spots in AgTech, gaining particularly high investor interest and driving industry growth. Strategic partnerships, both in Sales and Research and Development, prove vital for accelerating go-to-market and business scaling for young companies. On the other end of the spectrum, big players are searching for the balance between in-house development and strategic alliances/acquisitions as means for maintaining and improving market leadership.
Good news: European AgTech companies tend to be young and agile. The average company in the survey is four years old, has 10 employees, a B2B focus with direct distribution and the major shareholder is still active in an operational role. This can be seen as an indication that AgTech is entering a high growth stage producing sizeable companies.
Albeit a slight slowdown in founding numbers from 2016, AgTech continues a steady growth path (growth rate of existing players, pace of product development and number of newly established partnerships, funding). In 2016 over 80% of European AgTech companies grew (based on key KPI), 65% introduced new products and services
Another key takeaway is the increasing appreciation for Strategic Partnerships amongst European AgTech companies. Over half of the survey participants have been actively entering new Strategic Partnerships, with the top 3 motives being Sales, Research and Development and Technological Partnerships. Nearly one third of new partnerships included a multi-national corporate. The prevalent focus on sales partnerships seems to be an indication for the pursuit of rapid internationalization since early-stage companies depend on partners to act as indirect sales channels.
Austria’s top startups in AgTech
Several startups contribute to the lively scene in Austria. First to mention is the successful fundraising of Smartbow. Smartbow received significant funds and additionally the organizational support of zoetis.
What is more, a number of exciting AgTech startups such as Wuggl (contactless weight-measuring of animals), SmaXtec (health monitoring of cattle), Farmdok (digital tool for planning and record keeping in agriculture), as well as established later-stage players such as Pessl Instruments (agrometeorological monitoring systems) show the success of the Austrian ecosystem.
To wrap up, the AgTech sector remains one of the most attractive and promising verticals. This is shown in the rapid growth of collected funding as well as in the outperformance of the general market. At the same time established market players are monitoring closely the activities of these emerging technology players. We been observing an unprecedented number of partnerships and M&A activities between the large corporates and new market entrants. This trend is further supported by corporate incubators and accelerators that have been established in the last few years. i5invest is convinced, that collaborations, partnerships as well as M&A activity, especially from strategic buyers will increase over the coming years.
i5invest is a group of serial entrepreneurs, business angels and corporate development experts in the tech space with vast experience in scaling and exiting tech companies. They are active within the AgTech ecosystem by participating at key industry events in Europe and in the US (e.g. partner at Silicon Valley AgTech Summit, EuroTier or Agritechnica). The broad in-house expertise and extensive international network (VCs, PEs and Strategic Investors) enables the team to support partners and clients from an early stage all the way to a mature growth development stage. In 2016 i5invest supported the Austrian AgTech company Smartbow, an animal health-monitoring solution provider (smartbow.com), to raise funds and enter into a sales partnership with zoetis – the leading global animal pharmaceutical company (zoetis.com).