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Silicon Valley Enters Into a Promising Relationship with Agriculture

April 8, 2015
The Wall Street Journal recently posted a great article on how Silicon Valley is taking agriculture to a whole new level, leading to new innovations that change how our food is grown, transported and sold!

Below are some great excerpts from The Wall Street Journal's Silicon Valley Firms Plant Roots in Farm Belt article but BIO encourages you to read the article in its entirety. The article includes great links and videos.

The money involved in U.S. food startups is still small compared with Internet companies. But venture-capital investment in agriculture and food soared 54% to $486 million last year, according to Dow Jones VentureSource.

Big agribusinesses have launched their own VC initiatives, and investment managers have raised funds dedicated to food and agriculture technology. New York-based private-equity firm Paine & Partners, for instance, raised $893 million in January for investments in boosting productivity in areas like protein production and food safety, according to its president, Kevin Schwartz.

Driving the investments are a combination of cheap wireless technology, improved tools for collecting data and monitoring crops, and budding entrepreneurs looking to address new market demands and feed a growing global population. Increasingly health-conscious consumers also are scrutinizing what is in their food, pushing vendors to boost the transparency of their supply chains.

“Agriculture is the last frontier for a lot of different technologies,” said Roger Royse, a Silicon Valley lawyer who started an agricultural-technology conference in the San Francisco Bay area two years ago.

Here are five key areas drawing interest in the food-investment wave:

1. Precision Agriculture - Farmers are starting to harness the kind of intricately detailed and up-to-the-minute data about production costs, speed and output that have become standard in many U.S. factories. Corn and soybean farmers in recent years started adopting such “precision agriculture” techniques to make better-informed decisions, and it’s spreading throughout the sector.

2. Indoor Farming - The amount of U.S. farmland isn’t growing, so entrepreneurs are starting to farm up. Indoor farms are popping up, arranging dense rows of leafy greens onto shelves layered atop each other in former warehouses and other buildings across the country. New ventures in so-called “protected agriculture” include The Plant, FarmedHere LLC, and Green Spirit Farms LLC. They say they’re saving the need to transport leafy greens cross-country, which adds costs and reduces shelf life.

3. Food Safety - A spate of recalls in the 2000s, of food that sickened or killed hundreds of people, alarmed the nation’s farmers and spurred federal legislators to clamp down with new food-safety regulations. A burgeoning array of companies are hoping to benefit from a new mandate for more stringent and consistent food-safety testing and tracking, something on which food companies currently spend billions every year.

4. Alternative Foods - Younger consumers are warming to healthier and distinct fare, and concerned more about the way food animals are treated and the water, land and other resources consumed in food production. So investors are betting that foods with alternative production methods will become hot. Hampton Creek Inc., Impossible Foods and Beyond Meat, among a host of other startups, are churning out foods like burgers and mayonnaise using plant-based ingredients instead of animal proteins. One company, Modern Meadow Inc., is even making animal protein in a lab from animal cells, while Rosa Labs is formulating a nutritional drink called Soylent from vitamins, minerals and other nutrients to replace outright the need to chew a well-balanced diet.

5. Farm Robots - Much of the picking on produce farms falls to humans. Harvest Automation Inc., whose founders included inventors of the Roomba automated vacuum, believes robots could help grow more berries and vegetables at a lower cost by outsourcing some of the work to self-guided machines a bit larger than a five-gallon bucket.