Agritech
Tāmaki Makaurau Auckland and New Zealand have an exciting role to play in global agricultural innovation as farmers face labour shortages, the need to adapt systems in the face of climate change, and the challenge of feeding the world’s growing population.
Local industry body AgriTechNZ says growth is driven by climate challenges and the push to boost food production. Generating $1.6 billion in 2021, agritech is one of the most innovative sectors in Aotearoa and one of our largest exporters, thanks in part to efficiencies of scale: as a small nation in both population and GDP, we can often be nimbler than others.
Why Auckland?
Auckland and New Zealand’s main advantage is that the stakeholders at different parts of the value chain are close and collaborative, forming a so-called ‘smart ecosystem’ whose scope ranges from applied science in our research institutes to product development and commercialisation.
Since its formation in 2018, Auckland-based industry organisation AgriTechNZ has developed the ecosystem to include most major agribusinesses in Aotearoa, as well as research organisations, international and local technology companies, government agencies, farmer practitioners and startups. There are strong funders and a powerful investment network, as well as a long tail of government funding.
Addressing key trends
Domestic labour shortages and border restrictions post-COVID-19 have forced a focus on automation and data integration to drive growth. This in turn has sparked innovation in new technologies, such as cow wearables, and applications to aid crop health and harvesting. The disruption to regular supply chains has also led agritech companies to seek more streamlined and cost-effective alternatives.
This technological development is to be welcomed, not least because it will satisfy consumer demands for better, safer products, and lead to more efficient and user-friendly business operations. Separately, regulatory change has created a demand for technology to help farmers comply with environmental reporting and operational oversight.
The Auckland opportunity
Tāmaki Makaurau is home to several of New Zealand’s top agritech businesses, as well as dozens of what the Technology Investment Network (TIN)’s 2022 Agritech Insights Report calls ‘pipeline companies’; TIN considers the pipeline crucial to ensuring longevity and innovation in Aotearoa’s agritech economy. In 2022, nearly two-thirds of those companies were already at market, generating revenue and applying their technologies.
Partnerships in Auckland include: Sprout, New Zealand’s leading agrifoodtech accelerator (its investments include Protag, which raised $1 million to fast-track development of its smart ear-tag sensors) and KDK Ventures, an investor in Figured farm management software. Other funders include NZ Growth Capital Partners (NZGCP) and the NZ$50 million Pacific Channel Fund II.
Backed by government investment
The Agritech Industry Transformation Plan (ITP) highlighted that investment in the sector would be crucial, and the government injected an initial $11.4 million to implement it in 2020. In 2021, as an outcome of the ITP, Finistere Ventures and NZGCP launched a $40 million Agrifood Fund focused on sustainability and nutrition innovations. The latest budget allocation of $5 million was made in 2022.
In 2021 the government contributed $37 million to help farmers develop ‘integrated farm plans’, in large part to assist compliance on multiple fronts, but also to improve information sharing across the primary industries and between regulators and industry assurance programmes.
Sector strengths
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Auckland is the country’s largest centre for skills, talent and technology innovation
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Auckland is home to industry body AgriTechNZ, central to a highly collaborative ‘smart ecosystem’
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Deep tech incubators and venture capital enabling rapid startup and upscaling
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New Zealand is a great test market – small enough in scale to be manageable for product trials and early commercial release
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The sector has a sound regulatory framework to facilitate commerce and protect IP
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The agricultural sector workforce is well educated and there’s high internet adoption, even in rural areas.
Success story
Hectre’s orchard management software provides meaningful real-time data on harvest yields, labour performance, fruit size and quality control. This helps growers and packers achieve efficiency, plan successfully and gain optimal prices for their fruit. Orchardists can print on-the-spot, waterproof bin tickets. Geo-tagging of tickets means the fruit can be traced back to within yards of where it was picked. Hectre successfully raised NZ$3.5 million in 2021 from United States company Borton Fruit and from the Prague-based Kolowrat family, which had implemented the application on its orchards ahead of its investment. The technology is now used in 11 countries including the United States, Spain and South Africa. The application uses computer vision artificial intelligence run on Amazon Web Services.
Contact our investment specialists to learn more about what Tāmaki Makaurau Auckland has to offer and who you can speak to for more information.