Ireland’s agritech sector set for robust growth as demand increases worldwide
With the world’s population rising year-on-year – and set to reach a staggering 10 billion by 2050 – the pressure on the agriculture sector for food production continues unabated. However, this has to be weighed against growing environmental demands as well as pressure on those who work in the industry.
As a result, agritech – using scientific and technological innovations to increase food yields, ensuring greater efficiency – will play a vital part in the global food chain in the coming years.
The agritech sector is worth more than £200 billion globally and Ireland has taken a leading role as businesses have sought to innovate to help keep the sector competitive against international rivals.
In the Republic, the focus has been on increasing yields in crops and livestock, while reducing waste through the use of technologies such as AI and the Internet of Things.
Agritech exports from Ireland are worth more than £250 million annually, according to national export agency Enterprise Ireland (www.enterpriseireland.ie) and machinery now being produced in Ireland is exported worldwide.
Companies such as County Tipperary’s Abbey Machinery and McHale, based in Ballinrobe, County Mayo, are world leaders in cutting-edge agricultural machinery. Elsewhere, there are a plethora of start-ups across the country looking to emulate Abbey Machinery’s success.
Proof of the popularity of the sector in Ireland was clearly in evidence last year when agritech companies raised significant funding at the height of the coronavirus pandemic. For example, MagGrow (www.maggrow.com) raised €6 million in a venture capital fund raising round led by Astanor Ventures, with WakeUp Capital and various other smaller participants.
MagGrow has a magnetic spraying technology that makes the process more accurate and efficient. Spray drift is cut by 70%, which in turn increases the coverage of the spray by 20-40% compared to traditional methods.
Dublin-based MagGrow has now raised more than €10 million since the company was established in 2013. The funds from this round will be used to speed the rollout of its Tractor Boom product, as well as increase its manufacturing capacity and for research and development into new products and intellectual property.
Gary Wickham, founder and CEO at MagGrow, said: “MagGrow believes every person on this planet has the right to food and water. This aligns with MagGrow’s core values and our collective desire to do our part in feeding this planet sustainably.
“The way to do this is to ensure farmers are profitable in the first instance – and sustainable. This is where MagGrow’s technology steps in as it allows farmers to achieve both simultaneously and, in doing so, supports the sustainable of global food production.”
Another company to raise money in 2020 was County Tipperary-based Herdwatch [businessandfinance.com/rebooting-ireland-irish-agritech-business-herdwatch-aims-to-expand-with-investment-of-more-than-e1-million/]. Herdwatch offers a subscription-based farm management solution and raised €1 million to help the company to expand internationally.
Herdwatch’s founder, Fabien Peyaud, said about a quarter of Irish dairy farmers already use the platform, but this total could be doubled. He added that it was the same in the UK. The company is now looking to expand further afield during the next five years.
Why invest in an Irish agritech business?
Investing in Agritech in Ireland has been helped by government-backed funds such as the Targeted Agricultural Modernisation Scheme. This was a consolidation of capital grant schemes with a total budget of €395 million, designed to incentivise private investment in physical farming assets as part of the Rural Development Programme. It ran from 2014-2020.
The academic sector is also active in the agritech sector. MagGrow, for instance, recently worked with the SFI research centre for advanced materials and bioengineering research, based at Trinity College Dublin.
Many universities around Ireland have agritech-based courses as well as centres of expertise to develop ideas. This includes NovaUCD, a part of the University of Dublin, which received funding last year to develop an agritech innovation hub at its research farm in County Kildare.
Elsewhere, there is the Ag-tech Centre of Excellence in County Kerry, operated by IT Tralee. This is a public-private partnership involving IT Tralee, Dairymaster, Abbey Machinery, Kerry County Council and McHale Engineering, which was set up in 2017 with the aim of making Kerry a leader in agritech research and development in the region.
Starting an agritech business
There are no great barriers to setting up an agritech business in Ireland. Seed funding opportunities are plentiful, such as High Potential Startup funding. This is run by Enterprise Ireland and is open to companies that are developing products or services and employ up to 10 people or have sales of more than €1 million within three years of being established. Another option is the Competitive Start-up Fund, also run by Enterprise Ireland, to accelerate growth in international markets; companies can apply for up to €50,000 in return for 10% of the ordinary shares in the business.
Local Enterprise Offices (LEOs) also provide advice and information to entrepreneurs. There are more than 30 LEOs across Ireland offering access to grants and assistance for exporters. This is open to businesses that employ fewer than 10 people and that can show they have a product or service that has potential for growth.
There are also various venture capital funds in Ireland that focus on investing in start-ups with high growth potential.
The future of Irish agritech
With pressure on global food production showing no sign of easing, the demand for agritech products and services will continue to grow in the years to come across the globe. This means there will be plenty of scope for investments and acquisitions of agritech businesses in Ireland.
With a thriving roster of agritech start-up companies in Ireland, many will be looking for investments to help bring products to market, or fund research and development into new products. There will also be plenty of opportunities for investors to make healthy returns as there is an appetite for innovative products that can help agricultural businesses to increase yields and efficiency.
Likewise, with many small to medium-sized businesses in the sector there will be scope for consolidation in the marketplace as some companies will look for deals to enable them to get to the next level of development.
With such potential for growth going forward, there should be plenty of chances to invest in or acquire insurance companies in Ireland.
Those looking to invest, buy or establish an agritech business should seek out advisers with specialist knowledge of the sector in Ireland – including its history, leading players and local norms. Malone & Co. https://www.maloneaccountants.ie/ can assist on all the relevant aspects from setting up a company to providing diligence services as part of any deal or funding round in the sector.