The Midwest Context for Agri-Food Tech
I am occasionally asked by venture capital investors in agricultural and food technology businesses (agri-food tech) about the technology-based interests of the students at Iowa State University. The investors view student interests as a potential leading indicator of technology trends, and I agree. I learn a lot from students, based on their technological and entrepreneurial interests.
Below is one glimpse into student interest. In 2020, I’ve taught around 120 students (including 20 graduate students) in entrepreneurship courses. Most are majors in the College of Agriculture and Life Sciences or the College of Engineering and generate agri-food tech startup business ideas. I used the AgFunder categories from their 2019 report along with the percentage of deals they recorded in the U.S.
Agri-FoodTech Categories Comparison
AgFunder 2019 Deals vs. ISU Student ideas
|AgFunder Deals||ISU Student Ideas|
|Cloud Retail Infrastructure||16%||0%|
|In-Store Retail & Restaurant Tech||10%||1%|
|Farm Mgt SW, Sensing & IoT||4%||20%|
|Bioenergy & Biomaterials||4%||4%|
|Novel Farming Systems||4%||6%|
|Online Restaurants & Mealkits||2%||1%|
|Home & Cooking||1%||1%|
|Farm Robotics, Mechanization & Other Farm Equip||1%||21%|
|Animal Health Tech (not an AgFunder category)||18%|
What story do the numbers tell? Above all, that context is important. The context for the students in my courses at Iowa State University is centered around production agriculture, and their interests align with that. Many students come from farms, and almost all have had internships and job experiences on farms and/or agricultural businesses. They aim their technology ideas at solving the problems they’ve experienced first-hand.
Categories that stand out as outliers include Farm Robotics, Mechanization & Other Farm Equip, which represented 1% of deals in 2019 in AgFunder’s report, but represented 21% of student ideas in 2020. The next highest is Farm Management Software, Sensing & IoT, where 20% of students created a startup idea compared to 4% of AgFunder 2019 deals.
Most interesting to me, though not surprising, are the students interested in animal health technologies. There isn’t a separate category on AgFunder for these businesses, but I break them out separately, as they represent 18% of student business ideas.
Why the disproportionate interest in animal health technologies? Again, context is important. Students at Iowa State University are in the midst of pork, chicken, turkey, dairy and beef production, and their interests reflect encounters with problems in those industries that technology can solve.
In contrast, the fact that animal health tech investment isn’t a category of its own for AgFunder, but is instead mixed into other categories, may reflect under-investment. It’s another small sample, but for the Ag Startup Engine portfolio, the same Midwest context that I see in my students is evident. Five of ASE’s 14 investments, 36%, are animal health tech related.