Fast food delivery services are booming, but there is no money for agricultural startups
Express food delivery services are popular. But the connection to agriculture of many capital city dwellers is dwindling. This is also felt by founders in the Agtech sector. In Germany they are underfunded. Because there is a lack of know-how of many investors.
Express delivery services are booming. The Berlin cityscape is no longer conceivable without the pink, blue and green delivery men. But where does the food come from that you are transporting?
Not from the warehouse on Friedrichstrasse or in Prenzlauer Berg. They originate in the field – a place where start-ups work on smart solutions for agriculture. But the search for recognition, both from investors and the media, remains in vain. Possibly because many of them lack a connection to agriculture and thus to the basis of the food industry.
This has brought the German Agrifood Society, an offshoot of the German start-up association that was founded in 2019, to the scene. They want to promote so-called “agripreneurs”, i.e. founders who want to advance digitization in agriculture.
They describe themselves as exotic in the start-up scene, as they are reported and talked about less often than about express delivery services or food start-ups, for example. They work on the basis of food production by automating harvesting processes or developing intelligent animal husbandry systems.
Germany is at the bottom of the international competition
The start-up Pielers supports farmers, for example, in getting rid of their products through direct marketing. Agrando, in turn, helps with the trade in seeds and pesticides.
Just a few weeks ago, the Munich-based company was able to collect funding of twelve million euros – including from the fund of German Google manager Philipp Schindler. This is a huge success for the agricultural scene, says the Chief of Staff of the start-up Agrando, Franz Rabbow, in the hall of the House for Food and Agriculture in Berlin.
Around 50 guests, including founders, investors and members of the farmers’ association, gathered there at the invitation of the German Agrifood Society to discuss the role of start-ups in agriculture.
The start-up Organifarms, which wants to automate processes in vertical farming systems, took part in the discussion. The founders only secured 5000 euros from the agricultural pension bank in a competition in June of this year.
Little capital flows into agricultural start-ups in Germany
Such amounts do not allow start-ups to make quantum leaps. The audience at the event is therefore concerned with the question of why so little money flows into companies along the food value chain.
In the US, around 13 billion euros were invested in agricultural start-ups last year, and just over a billion in the UK. Germany is sadly at the bottom with an investment volume of around 300 million euros per year, as the study by the Silicon Valley VC fund Agfunder has determined. After this list, incomprehension spreads in the hall.
A financial expert speaks plainly: In this country there is not a lack of money, but of the know-how of many investors. Accordingly, specialized funds are needed so that agricultural start-ups are no longer dependent on donors from abroad as much as is currently the case.
While investors have no connection to start-ups in agriculture, many a farmer has no connection to start-ups that want to drive innovations in the fields, says Tobias Wiemers to the audience.
He is a farmer from North Rhine-Westphalia and knows how difficult it can be for founders to inspire farmers for new technologies. Many farmers are doing badly economically, says Wiemers. The result: no time for new and expensive experiments.