Agrihealth focuses on the link between farming practices and human health, offering promising investment opportunities as data costs decline.
While agritech has gained significant attention, a new area of interest called agrihealth is emerging, exploring the connections between food production and human health. Antony Yousefian, Managing Partner at UK-based venture capital firm The First Thirty, drives this discussion with a straightforward query: if "you are what you eat," shouldn't we also consider, "What did your food eat?"
The investment thesis surrounding agrihealth is founded on the premise that advancements in genomics, sensing technology, and artificial intelligence (AI) will enable better connections among soil, plants, animals, and human health. By leveraging these tools, investors could seize new opportunities to measure and interpret valuable data throughout the food system.
The Soil as a Starting Point
Yousefian emphasizes that the journey towards health-centered food systems begins not in kitchens but in the first 30 centimeters of soil. This perspective signifies the vital role of soil health in cultivating nutritious food. He states, "what's in the first 30 centimeters of soil" will influence the future of our food systems and, consequently, our health.
Understanding how farming practices directly impact soil biology, food composition, and human health is key. While connections exist, measuring these relationships has historically been difficult due to costs. However, as the expenses related to soil biology analysis decrease, the capacity to collect and analyze data connecting soil, plant, animal, and human health is set to improve dramatically.
The Democratization of Health Intelligence
A significant barrier in the past has been the cost involved in gathering intelligence on soil and crops. Yet, with current trends showing that about 50% of the population now uses wearables, health-related intelligence has become more accessible than ever. This shift has made overwhelming amounts of health data available to consumers, effectively democratizing information that once resided in specialized domains.
Yousefian asserts that the rise of AI is instrumental in this transformation, leading to a significant reduction in the costs associated with data intelligence. Consequently, businesses that collect biological data can translate it into actionable insights, fostering a more integrated connection between food systems and human health.
Investment Opportunities in the Agrihealth Stack
When considering potential investments, Yousefian highlights businesses that consistently gather biological intelligence, utilizing Internet of Things (IoT) devices, edge sensing, and genomics. Companies excelling at not just accumulating data but also converting it into recommendations are those with a competitive edge. For instance, his firm is encouraging transformative innovations through investments in companies like Cerve, which employs AI in food businesses, and Edacious, focused on measuring nutrient density in products.
Yousefian envisions that this evolving landscape could lead to the emergence of a new class of food giants, drawing parallels with how tech companies have transformed industries. He believes that as companies like Apple and Amazon become more intertwined with the food sector, we may witness a fundamental shift in consumer health, rooted in the nutritional quality of food.
Appealing to Potential Investors
The types of limited partners (LPs) that might be drawn to the agrihealth investment space are varied. Yousefian notes that LPs interested in disruptive health-focused companies will find it a logical extension to include food-related initiatives. Food companies, particularly those seeking innovation to overcome stagnation, are also increasingly engaging with agrihealth investments, creating opportunities for novel collaborations.
For portfolio companies' successful exits, investment in the data layer is critical. With the understanding that a model's robustness is intrinsically tied to data quality, partnerships with established tech and biology firms are anticipated to flourish. Notably, OpenAI's acquisition of biotech firms could foreshadow a growing trend where data-driven health solutions become predominant.
Synergies Among Portfolio Companies
Fewer but strategically selected investments are part of The First Thirty’s approach, built on the principle that portfolio companies should complement one another. Yousefian references investments in companies like Mapana and Antler Bio, which focus on soil health monitoring and gene expression analysis for livestock health, respectively. The synergy among these companies facilitates validation of outcomes, such as improved nutrition in crops translating into better health in livestock.
This interconnectedness is crucial for enhancing food quality, potentially leading to a system where producers are rewarded for delivering superior products. As he explains, monitoring and understanding better crop health could increase revenues for producers offering high-quality milk or meat based on improved health metrics.
Identifying Gaps in the Investment Portfolio
Yousefian acknowledges that there's potential to further diversify the agrihealth investment landscape, especially in areas such as plant breeding. Addressing this gap could enhance their approach and contribute meaningfully to public health by improving the nutritional profiles of staple crops.
Edacious: A Model for Agrihealth
Edacious stands out as a pivotal player in this ecosystem, providing a service focused on nutrient measurement and food quality verification. By significantly reducing costs traditionally associated with lab services, Edacious facilitates differentiation in the marketplace for various food products. They provide transparency in food quality, allowing consumers to benchmark products and health claims against established standards.
This capability can lead to the emergence of verification layers that instill confidence in food claims made by producers. As consumers increasingly demand proof of nutritional benefits, services like those offered by Edacious could solidify their role in the market. Yousefian posits that such business models will not only thrive but disrupt current systems, enhancing consumer access to quality information on food products.
In summary, agrihealth presents numerous investment opportunities that intersect agriculture, health, and technology, promising a transformative impact on food systems and public health. With an expanding data ecosystem and innovative technologies, the potential for enhanced human health through better food choices is becoming a tangible reality.
