Despite an overall decline in funding to the Asia-Pacific region last year, there is a glimmer of hope for agrifoodtech startups. According to the new Asia-Pacific Agrifood Investment report from AgFunder in collaboration with the Bill & Melinda Gates Foundation, Omnivore, and AgriFutures Australia, upstream startups – those working close to the farm or lab – have seen an increase in new venture capital. In 2022, these startups raised an impressive $3.2 billion, marking a 24% increase from the previous year.
One category that stands out in this upward trend is Ag Biotechnology, which historically hasn’t been a strong category in the region. However, it experienced a remarkable surge from $142 million in 2021 to $813 million in 2022, making it the top-funded upstream category for the year. The number of deals for Ag Biotechnology startups also rose from 28 in 2021 to 49 in 2022. Preliminary data from 2023 suggests that this momentum will continue, with startups in the category raising over $340 million in the first half of the year.
So, why does agriculture need biotechnology? The Ag Biotechnology category includes technologies that focus on on-farm inputs for crop and animal agriculture, such as genetics, microbiome, breeding, and animal health. These technologies have the ability to select and enhance desired traits in plants and animals, such as drought tolerance or disease resistance. With the impacts of climate change becoming more pronounced, ag biotechnologies are seen as crucial tools to boost plant and animal health, as well as protect and expand food security.
In the Asia-Pacific region, many countries are particularly vulnerable to the impacts of climate change and food insecurity, making this category even more relevant and attractive for startups. In 2022, China and India led the region in Ag Biotechnology funding, with China raising $633 million and India raising $122 million. They were followed by Japan ($20 million), New Zealand ($14 million), and Hong Kong ($13 million).
Some notable deals in the Ag Biotechnology space include China’s Zhongxin Breeding, which raised an astounding $327 million seed round in 2022. The company utilizes genomic selection and somatic cell cloning to develop new pig breeding lines. Another significant deal went to Absolute Foods, India’s largest microbial and biomolecule discovery optimization platform, which raised $100 million.
Looking ahead to 2023, one of the most notable fundraises in the Asia-Pacific region is Australia’s soil-carbon startup Loam Bio, which secured a $73 million Series B. Additionally, China’s Bio-Engine, a company that produces serum-free media for human and animal cells, raised “over 300 million RMB” ($41 million) in May of this year.
The surge in Ag Biotechnology investment in the Asia-Pacific region is a positive sign for the agrifoodtech industry. It not only demonstrates the increasing recognition of the importance of biotechnology in agriculture but also highlights the potential for startups to address the challenges of climate change and food security in the region. With ongoing funding and support, these startups have the opportunity to make a significant impact in the agricultural sector, benefiting farmers, consumers, and the environment alike.