Finistere Ventures, a venture capital firm that describes itself as in the business of helping “ambitious founders transform food and agriculture,” has teamed up with Pitchbook to produce a dataset that would enable “clear insights into financing activity and metrics in the agtech sector.” The result was the Agtech Investment Review of 2017. But this year Finistere and Pitchbook dove deeper to produce something that would be more global and less U.S.-centric, than last year’s review. 2018 Early-stage Agtech looks more into the earliest stages of an agtech portfolio company--the angel and seed stages. And no, “seed” here is not a pun although in this particular context it sounds like one. As to the broad term “agtech,” the authors of this report of course recognize that it comes in many forms. The report produces a taxonomy early on. There is for example plant science, “the modification of existing plants and organisms to improve plant health and yield,” whether by breeding, genetic modification, or something else. Separate from that, there is crop protection and input management. This involves the development of technologies and products that improve yields. This includes, for example, nutrient technologies "to improve plant or soil health and reduce other inputs.” Further down the list, there are startups that offer “sensors and farm equipment,” meaning hardware and/or software that “is designed to monitor a range of conditions, most frequently within close proximity, plus equipment for farming, with integrative capabilities for whole platforms.” Angel and Seed Stages The angel and seed stages are especially important in the agtech sector because agtech innovation is very global, but start-up funding is very local and community-driven. Angel deal volume in 2017 was down from 2016, which was a record year. On the other hand, seed-stage investing hit a record high in 2017, $89.5 million divided among 86 deals. Plant science, as defined above, receives less angel funding than its counterparts. Angels are perhaps scared away, the report suggests, “by the complexity of technology development, regulatory barriers, and long development timelines in this sector.” Crop protection and input management has much more angelic interest, given “the push to improve plant yields, which has drawn significant interest since 2012.” An Interview with Seed Investors The report incorporates an interview with two seed investors: Kirk Haney of Radicle Growth, and Dean Tilyard of Sprout. The interviewer asks, “From a results perspective, what do you expect to hear from founders when they pitch to you?” Haney answered that he wanted “a big vision that’s grounded in how it will be executed.” He also wants to learn of “some domain experience and some example of the entrepreneur's success.” Tilyard answered the same question with, “We’re looking for a clear understanding of the problem, and if the individuals involved have spent time trying to understand the problem.” The people at Sprout in New Zealand, are “focusing on customer traction and pushing through to exit, so we’re really looking for companies that are aligned to that. One of the key maturity points has been around capital and being honest about how much an agtech company is going to need to meet its goals.” The interviewer then asked whether expectations among agtech entrepreneurs have risen hand-in-hand with valuations. Haney replied that once one gets outside the hothouse of Silicon Valley, “the strategy and approach to commercialization are more rational and this leads to rational valuations, rational timelines and clear paths to capital raising.” Entrepreneurs who have grown up on farms have the domain expertise that he and Radicle are looking for. In response to the same question, Tilyard said: “I think it’s fair to say that New Zealand valuations are lower. Companies that are able to raise money from U.S. investors are seeing higher valuations than they would have gotten otherwise, which is encouraging.” Regional Spotlight: Australia and New Zealand The report also includes a “spotlight” section on Australia and New Zealand written by Tilyard and two others (Sarah Nolet of AgThentic and Suse Reynolds, of the Angel Association New Zealand). They say that there is a growing recognition in Australia in particular that agtech, although obviously related to agriculture, is a sector of its own, with significant potential and without constraints on production. As to New Zealand, the spotlight says that its entrepreneurs are leveraging its national expertise in “water management, pastoral farming, animal health and food processing” and are developing new opportunities in high-value horticulture.