Four industry experts recently gathered in Thailand for a conference held during the True Digital Park Grand Opening 2019 to discuss “Food for Thought: Innovation in Food and Agriculture”.
Food has the potential to be a huge technology playing field that can be expanded regionally and localize successfully.
One expert noted that agriculture can be made sustainable with digital nutrition, which is a new way of optimizing farmers’ performance through digitalization by using the same amount of materials to achieve higher productivity.
However, while agriculture’s increased efficiency brings about valuable impact, the upstream of the food supply chain where the food source stems from requires a much larger deal of innovation and this is where the business opportunity lies in.
There is an increasing number of start-ups focusing on the upstream of the food supply chain and more innovation in farming, agriculture, while alternative proteins began sprouting up in the past two years, the Director of an early-stage venture fund noted.
Serving fresh funds
Start-ups in the upstream, with the majority of them in the deep tech sector, typically take a longer time to achieve commercialization. Therefore, investors will need to widen their portfolios with a combination of upstream and downstream start-ups.
While it seems that downstream start-ups such as food delivery companies generate higher and faster ROI encouraged investors to also look into upstream start-ups which will be emerging as the next big thing, albeit with a longer rate of return.
Fund-raising for food and agritech start-ups is getting easier these days, as compared to five or six years ago. There is also a climb in corporate venture capital (CVC) in the food and agritech field.
A growing number of commodity traders are looking into this area as well, to provide micro-financing to the farmers. Opportunities abound in the micro-financing area with 235 million unbanked adults in the agriculture industry as reported by the World Bank Group.
Thailand is paving way for its homegrown unicorns as support programs are rolling out for start-ups to accelerate their progress.
Food and agriculture tech ecosystem
The Southeast Asia community builders were called on to look to the California market for knowledge and insights on bringing both upstream and downstream players together, in an effort to build a strong FoodTech ecosystem.
The Chinese agriculture players’ grassroot effort was lauded, including relevant associations and chambers, sharing agriculture knowledge and business tips over online chat groups, as an example to bring value to the food and agriculture tech ecosystem.
The role of government and corporates
Meat is a large part of almost every nation’s economy. A majority of cultured meat producers are from start-up backgrounds, which intrinsically lack credibility and trust from the consumers due to weak track records.
Education and awareness can be built up collaboratively by government bodies and corporates; consumers are more likely to trust such organizations with strong credibility.
There are no standards and regulations for IoT technology in food and agriculture tech yet. The lack of regulations spells uncertainty and risks for IoT developers as there are no guiding rules for the developers.
While the ultimate purpose of regulation is to encourage stakeholders to take into account externalities such as security and privacy, an expert suggested that regulations are not needed for IoT technology in the food and agriculture sector.
Corporates are becoming more active in the food and agriculture tech ecosystem with many setting up their own venture arms to invest in start-ups. Corporates are technology adopters and innovators in applying such technologies and must be enabled to reach their full potential.
