What a year it’s been.

If 2020 was Agri-FoodTech’s breakout year— with a record-breaking $30 billion in investment funding, 2021 was the year Agri-FoodTech proved it had staying power. And then some.

The ink isn’t yet dry on all of 2021’s deals but considering Agri-FoodTech companies had already raised $24 billion in capital within the first half of the year, it’s safe to say we set a yet-again new investment record for the year. But what trends did we see coming out of this ever-widening funnel of Agri-FoodTech capital and opportunities?

As CEO of CS Partners I network and work with founders, boards and investors of Agri-FoodTech companies to hire the top talent they need to scale and grow. And via the “Leaders On the Mission Podcast,” I interview and pick the brilliant minds of the most innovative leaders in this space. This has given me a front-seat view of this past year in Agri-FoodTech.

So what noteworthy trends emerged and shaped Agri-FoodTech over the last 12 months? Here’s nine that jumped out at me over the past year and continue to keep me thinking:

1) Covid Made Agri-FoodTech More Relevant Than Ever

As we emerged from the pandemic panic and realized life (and business) could still find ways to carry on, the pandemic brought home not only how interconnected the entire world is but how amazing technology and science can be when we put it to good use.

A vaccine within a year using an emerging branch of medical science? That was incredible. In the post-Covid world, we’ve realized we have the science and technology tools at our disposal to solve big problems.

Now, all eyes are on Agri-FoodTech to do the same thing for the climate emergency.

2) Investments Got Bigger and More Mainstream

2021 was the year of the $100 million-plus raises!

In 2020, a decent Series A round in Agri-FoodTech was around $10 million. A Series B round was $20 million. In 2021 we saw Series A rounds at $25 million and Series B at $150 million. Talk about escalation!

Before 2021 capital was typically raised from general investment firms or specialty ag and food investors. But in the past year saw significant investments by major funds even at the very early stages.

A good example of this is Motif FoodWorks a company engineering plant-based foods to mimic traditional animal foods, spun out from Gingko Bioworks  in 2019. Motif raised $226 million in June in a round jointly led by a Canadian teachers pension plan board and managed by BlackRock, the world’s largest investment manager.

3) Agri-FoodTech Became the ESG Sector

Underpinning much this of investment was the epiphany that Agri-FoodTech is the ESG sector.

What do I mean by that? Well, before the emergence of Agri-FoodTech, ESG investors would measure companies’ carbon footprints and assess “company sustainability impacts,” whatever that means, as the yardstick for putting down their dollars. As in, which companies did the least damage to the environment as they went about their business?

But Agri-FoodTech companies are different. They’re not companies making a widget and doing it sustainability. They’re companies providing an ESG solution as their widget.

ESG investors figured this out, realizing that the sustainability mission of Agri-FoodTech companies is essentially baked into their price. That understanding drove valuations through the roof.

4) The Year of Going Public

2021 also became the year of going public with the promise of big new technology. It’s not surprising considering the investment hype surrounding Agri-FoodTech.

But here, I have a caution. Novel science and technology are indeed exciting, and that level of risk-taking is driving the innovation underpinning Agri-FoodTech. However, companies going public without a solid path to revenue and commercialization pose the danger of souring investors on the sector.

Case in point, the 62% plunge in shares that left investors in Zymergen feeling “scorched” (and their CEO sacked), as the Motley Fool described it, just months after their April $3 billion IPO.

The hype got ahead of us. So, let’s consider it a lesson learned. We don’t want Agri-FoodTech to end up with a reputation as an “emperor that wears no clothes.”

5) Fermentation Technology Attracts Interest

Plant-based products have dominated headlines, but in 2021 precision fermentation emerged as a potential game-changer for animal product alternatives.

It’s still early to see where this trend takes us, but most recently, Formo, a Berlin-based synthetic protein cheese company, raised $50 million in the largest-ever Series A funding round in Europe.

6) Innovation in Crop Protection Solutions

Crop protection solutions continued to gain steam. Agri-FoodTech companies are bringing a new approach to replacing aging herbicides and pesticides with more sustainable, effective alternatives.

Biotalys, a Flanders-based biological company announced they are developing new pesticides based on mimicking the immune system of llamas. (I love that!)

Companies like Enko looked to other sectors for inspiration in crop protection. Enko adapts the latest pharma discovery tools developed for creating novel, small molecule chemistries useful as new pharmaceuticals to agriculture. They use those same concepts to search for and find innovative, safe and efficacious crop health solutions.

7) Digitizing the Soil MicroBiome

Analytics has come down to the ground level — the soil microbiome. This year we saw continued emphasis on Agri-TechFood companies seeking to understand the complex interactions of underground life and how to manipulate it.

Companies like Pattern Ag are mapping the DNA of the soil, and all the critters in it, building up what is essentially a massive meta-genomic data pool of the soil microbiome. This sort of information is becoming massively valuable, especially when combined with the previously noted trend — novel new crop protection innovations.

8) Healthy Sugar Replacements

021 saw ongoing emphasis on health issues caused by our over-indulgence in sugar — type 2 diabetes is considered a global pandemic. This inspired more action toward technology and science around a holy grail of healthy sugars, protein sugars and healthy sweeteners.

Now the race is on to see who can commercialize products that taste as good as sugar while being price competitive.

Companies like Manus Bio, using fermentation to recreate plant processes in microorganisms with wide applications in flavor, fragrances, food ingredients, cosmetics and pharmaceuticals, and Bonumose, specializing in an enzymatic process for turning starches into a rare, naturally-occurring low-calorie sugar, are ones to watch in this space.

9) European Agri-FoodTech Sectors Shine

In years’ past, European Agri-FoodTech innovation had been overshadowed by the U.S. The ecosystem is much different in Europe when it comes to taking risks, which slowed the sector initially. But in 2021, Europe started to come into its own, with some impressive innovation hubs emerging in the UK, France, Germany and the Netherlands.

Investors have started to realize that price-wise, there’s more value in Europe, and so — no surprise — we’re seeing a lot more interest and deals happening in the European Agri-FoodTech space.

What’s Next for Agri-FoodTech?

So, like I said, it’s been quite a year.

Now the most pressing question is — what more might Agri-FoodTech achieve in 2022? Now that’s an exciting prospect to consider!