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Renowned economist and philosopher John Maynard Keynes famously declared: “The importance of money flows from it being a link between the present and the future”.
The quote holds more relevance than ever given the current status of our industry, and one which has inspired our upcoming event where we Focus on Finance.
From farmers being paid to plant woodlands and deliver nature recovery projects, to agri-tech entrepreneurs seeking their next raise, investors looking for deal flow and researchers bidding for funding for their science: this month we’re talking funding and finance for all aspects of the industry.
Weathering the financial storm
There is no doubt these have been challenging times. The soaring costs of living, spiralling interest rates, and the failure of some high-profile start-ups are making everyone more cautious.
An investor we spoke to recently, stated they made no investments in 2023 but are going to have to start “placing some bets” in the coming year, to fill their pipeline.
New money is increasingly expensive to secure – either through debt finance or equity investment. While the perennial negotiation between entrepreneurs and investors around company valuations is part of the investment discussions, the churn in the sector will hopefully liberate talent, intellectual property, and energy back into the system.
The merger of three of the UK’s agri-tech centres was presumably, in part, driven by the potential for cost-savings, and several big fresh produce businesses are winding down operations.
There is clearly less money going into the sector globally; the most recent AgFunder report revealed a decline in overall investment into businesses, with e-grocery and alterative proteins struggling, and vertical farming taking a hit.
On the bright side, however, novel farming systems, farm management solutions, sensors and “internet of things” investment held its own.
Yet for the brave and creative, this is surely a time of opportunity.
Incentives, Innovation, and Support
The post-Brexit Sustainable Farming Incentive is providing farmers with the opportunity to be paid to do something different which can – structured correctly – help support their businesses. Defra’s Farming Innovation Programme is a massive package of support (worth £270m – with £123m committed to date) to help bring new technologies into the hands of farmers and advance innovation.
And, a number of other programmes emphasise a broad support for industry growth, for example:
New funds are also being launched (such as Bramble Partners, backed by Henry Dimbleby, author of the National Food Plan), and the appetite for investment opportunities to meet ESG targets remains vibrant.
So, with less money available in the system, navigating the current financial landscape demands diligence and creativity. We must all work harder to get it and be bolder in structuring our businesses and investments.
Join us on March 26th for our annual Focus on Finance event; you’ll receive top tips from investors about how to secure equity funding, explore public sector opportunities for non-dilutive investment and understand how leveraging debt and asset finance can advance your business.
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