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Rabat – While Morocco has launched a couple of public and private initiatives to boost agricultural innovation, the Moroccan agrifood tech startups only secured seven funding deals in 2021 valued at $15.4 million.
A recent Africa AgriFoodTech Investment Report by AgFund Network in partnership with Dutch Development Bank (FMO) and British International Investment (BII) found that investment deals won by Moroccan startups represent merely 4.7% of the total executed deals on the continent.
The report added that the agrifood tech sector remains unpopular in Africa with the region representing only 1% of global agrifood tech venture capital in 2021.
Still, the sector appears to be growing as the year-over-year deal count for African agrifood tech startups grew 50% in 2021 to reach 150, up from 99 in 2020 and 51 in 2017.
Last year, 119 African companies succeeded in raising a total of $482.3 million across 150 rounds. Given that the African agrifood tech market is new and developing, 80% of closed deals were at the seed stage and only 16 deals were Series A investments.
However, 2022 is expected to further push the growth of the agrifood tech sector as startups raised $400 million in the first half of the year, which counts for roughly 80% of 2021 deals worth.
This growth is forecasted to further support the dominance of midstream technologies – which facilitate the movement of food and foods between farmers and consumers – in the continental ecosystem. Last year, midstream startups raised $293.7 million or 61% of total African agrifood tech venture capital.
Cloud Retail Infrastructure and e-Grocery also enjoyed wide popularity as they secured $57.3 million and $44.3 million in funding. Meanwhile, agrifood fintech startups witnessed significant growth, raising $23.6 million in 2021 while boosting the financial inclusion of farmers, agribuinesses, and retailers.
Read Also: Moroccan Startup Ecosystem Is Booming Despite Structural Issues
Despite rising fears of an approaching global recession, some market insiders such as the Founder at Decibel Partners Jon Sakoda have argued that “next year will be a record setting year for VC [venture capital] investments,” stating that there is “$290 billion in “Dry Powder” [cash reserves] waiting to be invested.”
As some forecasts are reassuring for the African startup ecosystem, the continent’s “Big Four” markets – Kenya, Nigeria, Egypt, and South Africa- are set to benefit the most, as they dominate 92.2% of the funding.
The ongoing growth of the Moroccan startup ecosystem, supported by global incubators such as Plug and Play and Y Combinator as well as local investment initiative,s is set to guarantee the North African country a piece of the pie while advancing the domestic agrifood industry that is key to preserving national food security.
Given the recent surge in food and energy prices and the agricultural consequences of climate change, food security appears to be the main challenge facing governments across the world.
Morocco is no exception. While the country hosts around 75% of the world’s phosphate reserves, the country remains heavily reliant on rainfalls which call for the development of climate resilient solutions to secure the sustainable production of food in the country.
Aware of these challenges, Morocco launched initiatives including the “AgriFood Tech” incubator program that supports startups in the agricultural and agri-food sector.
Read Also: Morocco Remains An Agrifood Importer Despite Strong Agricultural Potential
