Generating NZ$1.6 billion in 2021, agritech is one of the most innovative sectors in Aotearoa New Zealand and one with significant potential to grow. We speak with AgriTechNZ and Findex to learn more about the “smart ecosystem” engineered by Kiwi food and fibre producers to boost efficiency.
The agritech sector in Aotearoa is dominated by animal and crop health, data solutions and post-harvest subsectors. Brendan O’Connell, CEO of industry body AgriTechNZ, says that both the global push to boost food production and climate change are driving growth in the sector, and New Zealand and Tāmaki Makaurau Auckland have an exciting role to play in global innovation.
Tight links in the New Zealand value chain
“The smart ecosystem is a viable handle for New Zealand. We are not going to feed the world, but we are a significant food producer. Kiwis have been farming without subsidies for decades, so they’re very professional and have had to make the sector work on its own merits commercially,” says Brendan.
“The main advantage here is that the stakeholders at different parts of the value chain are tightly connected and work together, from applied science in our research institutes to product development, and commercialising. As a small nation in both population and GDP, it’s beholden on us to use that smart ecosystem. And we can pull those things together easier and faster than others.”
Brendan is an evangelist in this space, advocating for a collaborative, ecosystem-based approach to the innovative challenges ahead. Since its formation in 2018, AgriTechNZ has helped to connect that ecosystem, with membership including most major agri-businesses in Aotearoa, research organisations, international and local technology companies, government agencies, farmer practitioners and start-ups. He is also a huge supporter of the government’s Agritech Industry Transformation Plan (ITP), a strategic plan designed to support and accelerate the growth of the sector.
Agritech a government priority
The 2019 ITP highlighted that investment was a key constraint for the sector, and the government injected an initial NZ$11.4 million to implement it in 2020. In 2021, as an outcome of the ITP, Callaghan Innovation launched an initiative to provide agritech businesses with services, advice and access to networks both in New Zealand and globally. Callaghan Innovation also continued its support of Sprout Agritech Ltd (formerly the Sprout Accelerator), which runs a 12-week Accelerator twice a year and makes up to NZ$1million investments in agrifood-tech start-ups.
In 2021, the New Zealand government contributed NZ$37 million to support farmers to develop “integrated farm plans”, in large part to help farmers, growers, and Māori land owners adopt an integrated approach to their farm planning, but also to make more efficient use of data and improve information sharing across the primary industries and between regulators and industry assurance programmes. There will be a lot of data out there very soon.
The Technology Investment Network (TIN) 2022 Agritech Insights Report found that 11 deals resulted in more than NZ$15 million of investment last year, including both seed and follow-on funding. It said domestic labour shortages and border restrictions had forced a focus on automation and data integration to drive growth. In turn, this had sparked opportunities for a range of technologies, such as cow wearables, crop health and harvesting. The disruption to regular supply chains has also led to agritech companies re-evaluating and streamlining their approach to find more cost-effective alternatives.
Auckland agritech funders and founders
Tāmaki Makaurau Auckland is home to six of the TIN top 22 agritech businesses and 23 of what it calls “pipeline companies”. The organisation considers the pipeline crucial to ensuring longevity and innovation in Aotearoa’s agritech economy. It says more than 62 per cent of those companies are already operating in market, generating revenue and applying their technologies, while 23.9 per cent are in the commercialisation stage, and 13.8 per cent in development.
New Zealand’s leading agrifood-tech accelerator and investor is Sprout Agritech, working with local agritech and foodtech entrepreneurs to help them build great teams and global businesses. Its investments include Auckland-based sensor technology company Scentian Bio, which has just received further funding from the Bill and Melinda Gates Foundation. KDK Ventures is an investor in Figured, Auckland-based farm management software for financial planning and accounting. Meanwhile, Quidnet is an investor in Winely, which develops real-time fermentation analysis that gives greater control to vintners.
NZ Growth Capital Partners (with offices in Auckland and Wellington) backs New Zealand’s agritech sector directly through its Aspire fund: a generalist fund which currently weights more of its investments in deep-tech (including agritech) as early as proof of concept and seed stages. Amongst the agritech companies currently in NZGCP’s Aspire fund portfolio are CropX, Biolumic, Cropsy, Sunfed, Rockit™, Orbis, Onside and Synthase Biotech.
NZGCP also runs the Elevate fund (a venture capital fund of funds), which has committed: – NZ$20 million into Auckland-based Pacific Channel Fund II, which invests in ground-breaking science and advanced engineering deep-tech Kiwi companies who aim to create meaningful global impact and value. Pacific Channel investments include Engender Technologies which has developed optically based sperm selection technology used in the selective breeding of livestock. Other agritech investments in its portfolio are CropX, Next Farm, Cropsy, CertusBio, NE Tech, Bovonic, Nanobubble Agritech and Mastaplex; and – NZ$15.67 million into the Finistere Aotearoa Fund alongside Finistere Ventures, a global agritech fund with offices in Palmerston North and which has made investments in New Zealand agri-tech companies including Biolumic, CropX and Invert Robotics.
New Zealand as a test bed
Aotearoa has a proud history of farming innovation. From delivering the first shipment of frozen meat to England in 1882, to the 1940s when we pioneered aerial topdressing, we have been global leaders in agriculture. Trade policy and reform from the 1980s meant we took an early focus on productivity. That drive to keep doing things better in the face of change is arguably the catalyst for today’s agritech sector.
Steve Alexander, partner at financial management and business consultancy Findex, says New Zealand is an attractive place to invest in agritech.
“Regarding capital, New Zealand is still a great test market. It’s small enough in scale to be manageable for product testing and early commercial release. It has a sound regulatory framework to facilitate commerce and protect IP. The farmers and growers are world leaders in many areas, but not saturated with technology, meaning there is still room for improvement and to test and try new ideas.
“We also have a strong government-backed research and development sector with a solid public university system to support R&D in the sector. The agricultural sector workforce is well educated and there’s high internet adoption, even in rural areas.”
A connected and engaged ecosystem
The agritech sector in Auckland and New Zealand has a vital part to play in producing high-quality, high-value food and fibre products with a lighter touch on the environment – an ecosystem that thinks global from day one.
“Our biggest competitive advantage is the true collaboration by a diverse yet interconnected group of people, businesses and support organisations,” notes AgriTechNZ’s Brendan O’Connell. “As a small nation, we pull these things together much easier and faster than others. From science to applied science to product development to commercialising, we’re able to catalyse the entire value chain.”
Find out more
Contact our team to learn more about investment opportunities in agritech in Auckland, New Zealand.
DISCLAIMER: This article provides general information on potential investment opportunities in Auckland and is not intended to be used as a substitute for financial advice. The views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of Tātaki Auckland Unlimited. Tātaki Auckland Unlimited disclaims all liability in connection with any action that may be taken in reliance of this article, and for any error, deficiency, flaw or omission contained in it.