We recently launched NSW’s First AgTech Meetup group with our first event, a QnA featuring Michael Dean, Co-Founder and CIO of AgFunder. AgFunder is the world’s largest community of professional agriculture investors, and Michael is an expert on the startup and investment landscape for AgTech globally.

There’s a ton of excitement around AgTech in Australia these days, and we’re thrilled to be building a community in Sydney. We have nearly 160 members and our first event, capped at 70, was oversubscribed.

Here’s a quick snapshot of the QnA with Michael Dean.

AgThentic: Give us the AgFunder elevator pitch- what do you guys do?

MD: AgFunder is an online investment platform for technology innovation in food and agriculture. We enable investors to access curated private investment opportunities across the agriculture value chain. We also produce research, analysis and news on the foodtech and agtech landscape.

AgThentic: AgFunder recently wrote a report with BCG on corporate innovation. What did you learn?

MD: We worked with BCG to survey large corporates and investors in agribusiness about their investment and innovation strategies. We found that the sector is seeing huge investment, which we estimate to be between $20–25B, but that most corporates are investing in R&D (63%). M&A and equity investments are seeing about 8% each. So, corporates are being cautious and focusing on defending their current products and businesses.

AgThentic: Why is that and what do they need to do differently?

MD: For larger organizations, it’s really hard to move beyond incremental innovation. One strategy we’re seeing more of, especially in the food space, is corporate venture investing. Corporates can more easily integrate new innovation by investing in startups, for example through a corporate venture capital arm, and then ultimately acquire or otherwise integrate that innovation into their business. The report also identified six strategies for agribusinesses to help them invest in agtech. Things like building internal capabilities and improving tech scouting are critical.

AgThentic: What does an increase in corporate venture capital mean for entrepreneurs and other investors? Are they attractive to work with?

MD: Corporate VC can be a great source of capital for startups. Corporates can give access to their resources, such as facilities and infrastructure or partners in their network. Importantly, they can also leverage their distribution network to provide access to farmers, or other potential customers. Other investors, like VCs, may see the startup as more attractive, too.

But there can also be pitfalls. If the corporate doesn’t want to acquire the startup, that can be a red flag for other investors.

AgThentic: You see a ton of startups, what’s a common mistake that people here can learn from?

MD: We look for all the normal things like a high quality team and defensible technology that is solving real problems. In agriculture, in particular, startups have to get their technologies into the hands of farmers, and demonstrate how they will add value. This might be decreased operating or input costs or improved yield or something else, but they must demonstrate a clear value proposition and an ability to acquire and keep customers. Sponsored or subsidized field trials and partnerships that leverage existing customer relationship channels can help.

AgThentic: If you could wave a magic wand and have more startups in a certain area or subsector, what would you pick and why?

MD: We’ve seen a lot of startups in the decision support and farm management software space, so that’s getting a bit crowded. But there are so many problems to fix in agriculture and therefore so much opportunity. A few such as soil health, food provenance and safety and robotics are a couple of growth areas for the future.

AgThentic: Is agtech really Australia’s next $100B industry?

MD: I’m bullish on Australia. I think there are some great things happening here, and with increasing investment, we’ll see a lot more in the near future.

A big thank you to our sponsors, AgThentic (Tenacious Ventures), SproutX, and Crowe Horwath, and supporters, AgriDigital and AgFunder!