Between 2013 and 2014 Silicon Valley’s interest in backing agriculture and food-related startups soared, doubling in terms of deal size, according to data from the Cleantech Group. And that type of funding doesn’t looking like it’s slowing up in 2015: on Tuesday morning farming data company Farmers Business Network announced a new funding round of $15 million from new investor Google Ventures, and existing investors Kleiner Perkins and DBL Investors.
The year-old startup has been building a data-laden social network for independent farmers and was founded by former Kleiner Perkins VC, Amol Deshpande, and former Google.org Energy Program Lead Charles Baron. The company has raised $28 million in total for its network for which it has amassed data from 7 million acres of agriculture land in the U.S. and has been growing memberships at a rate of 30% per month. Farmers can use the site to review data like crop yield benchmarks and seed performance.
Farmers Business Network is only the latest of these startups that are using data tools, social networking services, drones, sensors, robotics and other cutting edge computing technologies to help farmers produce more food with less energy, water, and land. In 2014, 151 startups focused on agriculture and food (not including biofuels, but including some of the on-demand food startups) were funded to the tune of $976 million, according to the Cleantech Group data.
Some of these startups are hyper focused on using data and analytics to help farmers increase food yields in various ways, like FarmLink, Adapt-N, Farmers Edge, FarmLogs, aWhere, Granular, Farmeron, OnFarm, and Agralogics. Other startups such as Blue River Technology and Precision Hawk are using robotics and drones to increase productivity. Still others are looking to take farming to new places, like urban environments and shipping containers, and these include Bright Farms, Indoor Harvest, PodPonics and Freight Farms.
That list doesn’t even include the emerging area of using data for water conservation on farms. So why do the Valley’s biggest venture firms see farming as such a hot sector? Well, there are a few reasons.
Computing technologies are rapidly moving into sectors beyond consumers and the enterprise and into industries that have been much slower to adopt it, like the power sector, industrial operations, automotive and transportation, and agriculture. There’s an entire new generation of data-rich, smart infrastructure that these industrial sectors are looking to buy from big companies like GE and smaller nimble startups, too.
Then there’s the coming planet population boom that’s emerging at the same time as the world is shifting into an era of needing to increasingly conserve resources. There will be 9 billion people on the planet by 2050, and they’ll be looking to consume more food, energy and water than ever before. During this time the climate looks like it’ll be increasingly warming, which will significantly affect the amount of agriculture land, water resources, and traditional energy generation available.
On top of these trends, the global rise in an interest in entrepreneurship means that there’s more startups emerging with more diverse backgrounds, like from the big farming states in the U.S. In the face of this type of new innovation, farming giants like Dupont, Monsanto, and Deere and Company are investing in new technologies and even acquiring startups not unlike the ones from the list above.
Monsanto famously acquired weather data startup Climate Corp a few years back for close to $1 billion. And more recently Climate Corp snapped up a smaller farming data startup called 640 Labs. These won’t be the last exits from this sector, so expect this area to heat up along with the climate.