AgTech is an emerging sector at the intersection of agriculture and technology. Identified businesses use (often patented) technology to create innovative products and services that are mainly aimed at increasing the efficiency and yield of agricultural activities. As such, we segmented the European AgTech market by application into: (i) breeding, (ii) biological crop protection, (iii) controlled environment, (iv) precision agriculture and (v) farm automation.

With AgTech representing an emerging field poised to disrupt existing market segments that follow traditional approaches toward agriculture, a quite fragmented nature of the industry can be observed. Herein, traditional agriculture businesses have the upper hand with regard to market share due to their long history of established operations. A notable exception within AgTech is seen in the breeding market, characterised by an oligopoly with the top 4 players accounting for ~67%. In contrast, precision agriculture includes pre-revenue incumbents. Despite this, it is the long tail of small-sized players that tends to drive innovation and substantial future change. The majority of businesses concentrate on core R&D activities while outsourcing manufacturing, commercial and distribution tasks.

Investor-led interest in the AgTech sphere is evident, with ~60% of identified assets being backed by financial sponsors (as of February 2024). Investors are primarily attracted by the favourable long-term outlook driven by growing food consumption, the ecological agenda and farming unit economics. Nevertheless, investors venturing into this domain should closely monitor the varying European regulatory frameworks and challenges in the adoption by farmers.

ESG topics in the European AgTech market concern environmental and social factors. Incumbents mainly have a positive impact on the environment due to their innovation-driven products aimed at eliminating inefficiencies while boosting productivity at the same time. On the social dimension, incumbents actively contribute toward increasing food accessibility and security while actively protecting animal welfare. Herein, innovations give rise to farming in areas that may be too dry while monitoring livestock indicators to detect signs of distress or illness, thereby enabling prompt intervention when necessary.