As the global population increases, agritech companies are developing technologies to sustainably meet the demand for high-quality food.

A report has highlighted that global investment in agritech is growing, almost doubling to £100 billion between January 2020 and January 2021.

Since the turn of the century – when worldwide investment stood at less than £1 billion – companies headquartered in the UK and mainland Europe have attracted over 43% of global investment in agritech. These 564 companies have received nearly £81 billion from over 1,700 investors.

The importance of agritech has been recognised by the UK government. At a recent conference in the US, environment secretary Thérèse Coffey said: "...It is through science, innovation and technology that our farming industry will continue to be sustainable."

Looking at the UK's ambitions, Innovate UK comes joint top globally for the number of agritech companies invested in, tying with Horizon 2020 and SVG Venture-THRIVE. It's also the number one investor in Europe, highlighting the UK's impact on the sector.

The report on agritech investment was created by IP specialists Source Advisors, to discover the global hotspots attracting capital to agritech.

Agritech growth potential for the UK

The UK specialises in indoor farming and animal agritech, which account for around 40% of its investment in agritech. Whereas globally or Europe-wide, these segments make up under 10% of the investment. With significant expertise in these areas, there is great potential for UK growth and differentiation here.

Animal agritech concentrates on solutions to monitor, analyse and optimise animal health and production. It also explores animal substitution through alt proteins.

Indoor farming, meanwhile, involves components, systems and growers that are all focused on farming indoors. This includes technologies contributing to vertical farming, aquaponics and hydroponics. London-based Vertical Future raised the largest-ever series A investment for a European indoor farming company: £21 million, which included participation from SFC Capital.

Adam Simmonds,  Research Associate at Source Advisors, says:

"The rise in agritech investment in recent years is nothing short of remarkable. And as the world faces surging food demand, it's also becoming increasingly urgent to curb emissions from food production. This combination of factors only makes the case for agritech more compelling, so we can expect even more inve

stment.

"Venture capital will account for most of the early investment, particularly for agritech startups. Then, private equity investors will come on board to help thriving companies grow. And as agritech becomes ever more vital and goes more mainstream, many agritech companies will be listed on stock exchanges. It all points to more-than-healthy growth for the sector.

"In the UK, indoor farming and animal agritech will be at the forefront of this growth. We have so much knowledge in these areas that it can power the future direction of our agritech industry for years to come."