Silicon Valley and other tech center start-ups raised $2.06 billion in “agtech” venture capital in the first half of 2015 to develop apps and devices to help farmers manage the four-year-old drought.
Agtech funding is booming, with the 228 venture capital deals in the first six months of the year equaling almost the record $2.36 billion invested in VC deals for the year in 2014, according to AgFunderNews.
With 27 million acres of farmland under severe pressure from a historic drought, Silicon Valley has been recruited by the USDA to develop high tech solutions to farmers’ cyclical challenge of too little water during droughts and torrential downpours during El Niño and La Niña weather events.
A big driver of the move to high-tech solutions for farmers is the advent of the “Internet of Things (IoT),” which can help rural farmers facilitate remote control monitoring and automated responses to environmental changes across unlimited distances.
The Federal Farm Credit Bank-sponsored Advantage Capital Agribusiness Partners (ACAP) became the first asset manager to receive a Rural Business Investment Company license from the USDA as part of a $150 million initiative to channel more funds into rural start-ups.
ACAP invested $5 million into Hortau, a San Luis Obispo company that has been providing real-time soil moisture monitoring products for over a decade, and which holds itself out as an industry leader in the realm of precision soil moisture monitoring, according to AgFunderNews,
With help from the venture investment cash, Hortau has developed one of the first web-based irrigation management systems on the market. Using Internet of Things (IoT) sensors, Hortau claims it can help growers take much of the guesswork out of irrigation management. .
The Farm2050 investor collective kicked off its first agtech venture deal with Finistere Ventures, GreenSoil Investments, and Innovation Endeavours funding a $9 million Series A deal for smart irrigation company CropX, alongside other big name agtech.
Israeli drip irrigation provider Netafim, the world’s largest drip irrigation service provider, raised over $500 million in debt financing to fund an effort to take its promising drip irrigation technology to large farmers in California and across the developing world, from China and India to Brazil and Africa.
The burst of tech start-ups applying modern big data management tools to help famers and consumers gain huge efficiencies with water use has forced traditional ag-focused businesses to catch up.
TechCrunch reported that John Deere is incorporating IoT sensors and dashboard management systems into their newest generation of tractors; Intel is developing sensors to help the University of California Santa Barbara measure snow patterns in the Sierra Nevada mountains; and IBM is teaming up with AT&T LTE messaging system to use IoT sensors networks to monitor municipal water companies’ pipe systems for underground pipes leaks and drainage blockages.