With the world’s population expected by some analysts to hit 9.7 billion by 2050, the agriculture industry is under pressure to significantly increase the amount of food it produces, and technology will likely be part of the solution.
The global agricultural technology (agtech) market value stood at about $10.5 billion in 2021, according to Statista. It’s expected to grow over the next few years, perhaps more than doubling its current value by 2025.
Agtech innovations are constantly being developed by both startups and well-established companies like Deere & Co. DE and Caterpillar Inc. CAT, both of which have opened agtech divisions in the past year.
But some companies develop their own intellectual property. AgriFORCE Growing Systems Ltd. AGRI, for example, reports transforming modern agricultural development through its proprietary patent-pending facility design and growing system.
Vancouver, British Columbia-based AgriFORCE says it is building a premiere agtech company through acquisitions. It currently is in the process of acquiring the European agtech consultancy Delphy Groep BV and tissue culture propagation company Deroose Plants NV . These acquisitions are expected to close in the coming months.
Delphy focuses on optimizing agricultural production by driving innovation and operational expertise in agriculture, horticulture and controlled environment agriculture.
Delphy will be part of the AgriFORCE Solutions division, which includes an “internally developed next-generation grow house for high-value crops, nutraceuticals and plant-based vaccines”.
An Integrated Company?
The Delphy acquisition will provide a central component in the development of an innovative agtech ecosystem, Brian Wright, managing director and senior research analyst at Roth Capital Partners LLC, said in a report when he initiated coverage of AgriFORCE in April.
“We view the agriculture and food ingredient sectors as ripe for disruption by innovative and aggressive companies,” Wright wrote. “We see AgriFORCE as possessing these important characteristics and have been impressed by its business development capabilities and early capital allocation efforts.”
The Delphy acquisition is expected to help AgriFORCE create an integrated agtech company. Delphy, which posted revenue of $28 million last year, provides a multinational presence and more than 200 employees and consultants.
The company’s key areas of knowledge include cultivation, crop optimization, automation, lighting and climate control, feasibility assessments and operational management.
AgriFORCE reports its goal is to double Delphy’s revenue over the next three to five years. New income drivers will include feasibility studies, turnkey projects, partnerships with growers and operational partnerships or joint ventures.
It also plans to expand in North America, Central Asia and Latin America, and it’s striving for increased penetration in China and Japan.
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