AgriFood Tech Startups & The COVID-19 Crisis
Artesian recently completed a survey of 197 portfolio startups across Australia, China & SE Asia. Of the 197 startups surveyed, 28 were in the agrifood sector.
Projected change in revenue due to COVID-19 over next 12 months
The average projected change in revenue for AgriFood startups over the next 12 months was a decrease of 32.5%. This was significantly less than the average for the entire 192 startups surveyed which projected a 42% reduction in revenue.
We believe the agrifood sector may be one of the least effected sectors due to COVID-19 and that food security and sustainability will remain major themes in the face of potential future biosecurity risks.
Projected change in costs post-COVID-19 over next 12 months
The average projected change in costs for AgriFood startups in the survey was a decrease of 20.6%. This is broadly in line when compared with Australia/China startups overall which projected a change in costs of 21%.
It seems that AgriFood startups despite their relatively more positive revenue forecasts, have been realistic about the probability of fewer funding sources (at least in the short term) and flow on effects from overall economic weakness into the sector, and are cutting their costs in line with the broader startup results.
Projected Runway (months)
The average projected runway for AgriFood startups over the next 12 months (adjusted for revenue and cost predictions) is 9.3 months. This is broadly in-line when compared with Australia/China startups overall which projected an average runway of 9 months.
Studying the survey responses in more detail reveals that approximately 1/3 of startups expect their runway to be shorter due to the effects of COVID-19; 1/3 are predicting runway to be unchanged; and, 1/3 have extended their runway via cost cutting.
AgriFood Startups expect ~30% less effect on revenue vs startups overall -32.5% vs 42.0%
AgriFood startups have generally cut costs by the same quantum as startups overall -20.6% vs 21.0%
AgriFood startups generally have the same projected runway as startups overall 9.3 vs 9.0 months