Mergers and acquisitions saw an active year in the ag tech sector over 2021.
A recent report from Verdant Partners, states that there were over 50 technology deals announced in 2021, excluding biotechnology and food tech, representing a 40 per cent increase over 2020. More than 70 per cent of the transactions included a U.S. seller, followed by Europe at 18 per cent.
Major ag equipment companies, including Deere, CNH, AGCO, Kubota, and CLAAS, were the busiest buyers in 2021, with involvement in at least 12 of those deals.
“There’s been a lot of consolidation, there’s been a lot of conversation both politically and just in the market as a whole around consolidation in terms of the market share,” says Blake Croegaert, director at Verdant Partners. “I think what we’ve seen more interestingly, this year compared to the past, is consolidation happening across different segments of agriculture, which is part of what we honed in on in this report for the ag tech space.”
Croegaert explains that the traditional ag markets, such as inputs, seed, or crop protection, have “tended to stay within their own bounds,” and those companies that have dominated in their individual spaces have marketed or serviced their segments. Recently though, those companies have bled over to start competing in different segments of the value chain, which has been driven a lot by technology, he says.
“It’s been a busy year of consolidation, but I think we’ve started to see some different types of consolidation in the past 12 months and even a little bit beyond that,” says Croegaert.
Does that mean that there’s no new money available because of consolidation? Will ag tech companies need to find new partners?
Croegaert doesn’t think that venture capital is drying up for ag technology, in fact Verdant Partners would even call for increased investment and growth in the years ahead; however, in the past 10 years a lot of investors started to pay attention to the technology space and put a lot of capital into individual tech companies and there’s still a lifetime for venture capital.
Hear the full conversation, below for Croegaert’s predictions for 2022: