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New Zealand Has Real Opportunity To Be A World Leader In Agritech

TIN’s second annual Agritech Insights Report offers significant analysis of New Zealand’s Agricultural Technology export sector

Technology Investment Network (TIN) has released its second annual NZ Agritech Insights Report, providing compelling analysis of the size and scope of New Zealand’s leading agritech export companies, and the pipeline of promising Early Stage agritech companies.

Launched at Fieldays yesterday, the report provides a closer look into NZ’s agricultural technology sector based on data from TIN’s 2020 survey results, including size and significance, key export markets, investment challenges and opportunities, along with a comprehensive directory of over 110 early stage Agritech companies currently developing their own IP in New Zealand.

The Agritech Insights Report was first commissioned in 2020 to provide a baseline of data on New Zealand’s growing agritech export sector as the New Zealand Government launched its Agritech Industry Transformation Plan (ITP).

“Today, as COVID-19 continues to impact the world’s food production supply chains and labour markets, there’s never been a greater opportunity for NZ’s agritech sector companies to prove their potential as both problem solvers and profitable investments – and collectively, to be a positive influence on the world,” said Greg Shanahan, managing director of TIN.

“With the vision of the ITP continuing to roll out over the coming year, there’s a strong sense of purpose in the agritech sector that is translating into additional opportunities for investment. The dramatic changes in the global economy are creating exciting new opportunities for agritech,” Mr Shanahan added.

“Agritech businesses have the potential to inject billions of dollars’ worth of productivity gains into New Zealand’s primary industry sector,” said Brendan O’Connell, Chief Executive of AgriTech NZ, the membership-funded organisation that promotes opportunities and challenges raised by agritech.

“At the same time, these businesses can help curb environmental impacts and create export value that is not based on increased use of natural resources. By taking our technologies global we justify greater levels of investment and have an impact that is good for the world.”

Historically, Agritech has been one of the largest and most successful market sectors for the TIN200, New Zealand’s 200 largest technology exporters. Two of the sector’s largest companies, Gallagher and Livestock Improvement Corporation (LIC), contribute 40% of the total revenue for the TIN200 Agritech companies. Both companies, with revenues over $300m and $250m respectively, have maintained strong growth this year.

Key statistics on the Agritech sector (taken from the TIN Agritech Insights Report, and based on 2020 TIN Report data)

  • 11% of TIN200 companies are Agritech firms, and together they generated $1.4B in revenue in 2020; 10.8% of the total TIN200 revenue
  • TIN200 Agritech companies generated $69.4m growth; 7.1% of TIN200 growth
  • Total Agritech exports: $790.4m (57.5% of total export revenue)
  • Export growth: $54.9m (up 7.5% on 2019)
  • North America is the largest export market for Agritech (24.9% of total export revenue), followed by Australia (11.2% of total export revenue)
  • Average sector wage: $93,910 (TIN200 average wage: $82,540)
  • Average revenue per employee: $285,089 (TIN200 average: $230,410)
  • Investment in Sales and Marketing: $192.1m (up 2.2% on 2019)
  • Investment in R&D: $104.1m (up 7% on 2019)
  • Average company age: 25 years (TIN200 average: 28 years)
  • 5-year CAGR: 8.0% (TIN200 5-year CAGR: 9.3%)
  • Nearly 5,000 people employed globally with 73.3% of those in New Zealand (3,502 people)
  • Auckland is the region with the highest number of Agritech companies (38); followed by Central North Island (25), Hamilton/Waikato (21) and Canterbury/Upper South Island (20)

Key Agritech sector insights (taken from the TIN Agritech Insights Report, and based on 2020 TIN Report data)

  • NZ’s agritech sector is growing slowly, but surely

In 2020, the number of agritech companies on the TIN200 increased from 20 to 22, while the number of Early Stage companies that fit TIN’s criteria grew from 109 to 111 – both indicators of growth in the NZ Agritech sector

  • High-tech Manufacturing continues to dominate the sector, as ICT innovation surges

Although eight of the top 10 Agritech companies on the TIN200 are High-tech Manufacturers, companies that sell ICT solutions are beginning to scale, with three companies from the ICT sector graduating to the TIN200 for the first time

  • NZ agritech companies are focusing on the future

Investment in R&D by the TIN200 Agritech companies increased from $97.3m in 2019 to $104.1m in 2020, demonstrating a clear focus on innovation that will enable them to scale and build for the future. This aligns with a growing trend of larger Agritech companies and primary industry companies increasingly working with start-ups to collaborate and solve problems together, which is in turn producing a growing number of spin-outs and substantial new commercial entities

  • Opportunities for investment are increasing

Venture capital investment in New Zealand companies across all tech sectors increased to $127m in 2020 from $112m in 2019, while angel investment increased to $160m from $108m over the same period. Investor interest in locally developed Agritech companies has also increased as part of that.

The NZ Agritech Insights Report is sponsored by Te Taurapa Tūhono - New Zealand Trade and Enterprise (NZTE), Hikina Whakatutuki - Ministry of Business, Innovation & Employment (MBIE), Callaghan Innovation, Central Economic Development Agency (CEDA), Hamilton City Council, and James & Wells – with additional support from AgriTech NZ.

Copies of the Report are available for download here.

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