Covid-19 has caused mass disruption across the supply chain which has in turn threatened the supply of key food stuffs and ingredients. With investments threatened and intermediary players in limbo, where does business growth go from here?
“Everything in business is slowing down, and we are finding farmers to be less responsive right now too,”.. “Is it because they are busier, struggling, or worried about their own health? We don’t know. It’s hard to say that this has something to do with agtech specifically.” – Hunter McDaniel, founder of greenhouse tech startup UbiQD.
Tip 1: Think social isolation
There is some good news for agtech startups however, and that is that their end-user farmers provide an essential function that the world needs to keep moving: growing food! And there will always be an unprecedented demand for food.
Many startups are thinking creatively to stay afloat during this time. Services that include person-to-person contact for example are taking a more virtual turn. AgriSync, a startup that simplifies communication between advisors and their farm customers, has launched a new remote advising service package for small teams of experts. Users can set up a team of three advisors for $100 a month and contact them through video calls.
Farmobile, which sells hardware to farmers and delivers an approach to Ag data to connect, collect, and protect their data, and then share it with trusted advisors such as agronomists, or even sell to third parties through its data store, has noticed a spike in demand for its hardware over the course of the pandemic.
“In times of social distancing, there are some aspects of technology that will be more suitable than others. For instance, our technology is very low-touch and built for virtual data collection and sharing between farmers and trusted advisors. It removes the need for an agronomist to go out in-person to get a jump drive,” – Jason Tatge, CEO of Farmobile.
Other agri food startups are offering free services, to help farmers through covid-19. Satellite crop monitoring company EOS Crop Monitoring are providing their technology for free.
Tip 2: Labor shortages mean new opportunities
With borders closing and travel restrictions setting in across the world, many farmers are being left with labor shortages. Does this mean there will be more reliance on robotics and technology in case of future crisis?
Its definitely a possibility.
“If you are looking for a defensive sector in a global health pandemic, surprisingly it might be robotic farming,” – Kyle Cobb, founder of strawberry harvesting robotics startup Advanced.Farm.
Tip 3: Fixing the supply chain
Food waste is also an issue many farmers are dealing with at the moment. With restaurants, schools and offices closed, many farms are left without buyers and a lot of food is being spoiled. What about pivoting to grocery stores you might ask? Its not as easy as it seems according to US-based Food Maven. They buy surplus and imperfect food from producers to then sell to restaurants and kitchens at a discount through their online marketplace. However, with foodservice operations coming to a hault, they needed to rethink their strategy.
They decided to open its inventory to consumers for pickup and delivery in order to re-stabalize supply and demand.
Tip 4: Its rest-techs time to shine
Although many restaurants and bars are closing and feeling the financial hit from the virus, many are actually managing to stay afloat. Many startups are changing to delivery and takeout to keep up demand and third-party delivery companies like doordash and ubereats are seeing unprecedented sparks in orders. The restaurants that dont boast any digital offerings and cant order takeout or delivery, will be the ones to suffer. Restaurant management platform Toast cut half of its staff recently as its customers have no need to reserve tables.
There is a silver lining however: when startups are faced with a crisis, they pivot. Restaurant reservation service OpenTable now uses its software to let their customers reserve times to shop at supermarkets to avoid crowds.
Meanwhile, a restaurant tech offering from Edinburgh in the UK called ePOS Hybrid, closed its first crowdfunding round via Crowdcube which stood at £400,000. The company has been developing a digital hospitality management point of sale system that integrates and processes self-checkouts.
Tip 5: Innovation is key to funding
As many farmers re-think the importance of technology during this time, it seems that investment is running slightly dry.
“We are seeing significant disruption in the VC market. Term sheets are being pulled. Deals are being repriced. VCs are reassessing their investment strategy and capital reserves needed for their existing portfolio companies, particularly for those startups that were in the midst of a fundraise that blew up and now will require bridge funding,” Nolan Paul of Yamaha Motor Ventures told AFN.
However, with this added pressure many startups will take the reins of innovation and act quickly and efficiently to come up with new, and disruptive ideas which could spark interest from investors. Especially if those solutions could help stabilize the food supply chain.