08. February 2020
Follow-up funding: Germany must step up in AgTech
Interview with Katrin Jakob, California Business Associates
In Germany there is a lack of follow-up funding for startups, says Jakob. Local companies must also understand that the financing cycle is geared to the sale of a startup, not its growth and long-term development by the founders themselves.
Von Sarah Liebigt
Farm & Food: At the Farm & Food conference, you took part in the workshop “Ecosystem AgTech” and you led the Roundtable on AgTech in Silicon Valley. Please give us your impressions of these sessions.
Katrin Jakob: It is always interesting to bring Silicon Valley ideas to Germany. Especially in the agtech area, where Silicon Valley just caught up in the last years compared to other industries. Today we have an extensive Ag and FoodTech startup ecosystem and the questions here today focused on repeatability: what can we learn from Silicon Valley, what can we do better in Germany and in Europe? There still are big obstacles for startups in Germany and Europe, especially in follow up funding. As far as I know, there is great support for young startups at universities, on federal as well as European level. But follow up funding is usually missing.
In order to build a strong ecosystem, you must take a step back and think about how the funding cycle works. Investors give money to a fund, which is used to support startups. The startup must evolve and is sold at some point or goes public to bring in the return for the investors. It is my impression that German companies are not aware of that step yet. Usually they want to build a great company, keep it and maybe even pass it on to their children.
The German agricultural industry must step up. They must provide the funding and they also need to be willing to acquire startups. Startup organisations in Germany must build alliances with the industry in order to be able to close the funding cycle. That is the only way to allow start-ups to evolve into companies that can scale in the end.
In the workshop we had a question referring to the AgTech-market in Germany and Europe being too fragmented. They said it is easier to scale in the US as it represents a unified large market. This is true right now. But VC is coming to Germany, it will simply take some time to adjust distinct mindsets. There certainly is a good outlook for German AgTech companies to be successful in Germany.
Speaking about the conference: How would you describe the event’s relevance?
First I am very happy that there is a conference like this one at all. Farm & Food looks at different aspects of agriculture; at innovation, at digitalisation, at regenerative agriculture. Sometimes these topics might not align with each other, but that really creates wonderful discussions. Which is something that I like about the conference.
There is also a wide range of people participating. Everybody who should be on the table is actually here: all the people you need to move AgTech forward.