💸 Where I see tech gaps in Agrifintech
Looking at trends in the wider Fintech sector, this post pulls out specific opportunities within Agrifintech

Hi 👋 and welcome back to the Agrifintech newsletter.
This week I want to look at where Fintech is by referring to two recently released reports and also identify what I see are some of the technology opportunities for Agrifintech.
As always, I cover some sector news below also, which pulls some noteworthy stories together including Mastercard, Khula and ABSA in South Africa and a Farmer Mac update from the U.S.
If you enjoy this issue, please do share it with your network!
Fintech pivots
Fintech has reached a turning point as valuations have plunged and funding has slowed down. In this context, you could ask, where is all this going? Should we quietly slink away and pretend it never happened? (Let's look and No.
Thankfully, in recent weeks two excellent collaborative reports from BCG & QED Investors and another Barclays & Rainmaking Loft helped me take the temperature of some leaders in the sector and paint a vision.
With titles like "Reimagining the Future of Finance" and "The future of money, finance and banking" respectively, I think the timing could not have been better.
Below I point out 3 interesting observations from each and point to some under-explored opportunities in Agrifintech.
3 things from BCG and QED
This report which is available here contextualises the current funding landscape as a revision of appetite for "growth stage (series B-D) companies that have unclear product and/or market fits". The word unclear might be generous but I'm not here to nitpick. 😅
1️⃣ Fintech revenues are expected to grow 6X by 2030 📈 to reach $1.5T.
APAC will become the top region for fintech revenues ($600bn), spurred by 27% CAGR (compound annual growth rate), and largely driven by China, although other large markets such as India and Indonesia will also grow.
The US will also account for 32% of global fintech revenue growth and rise to $520bn in revenue supported by a proliferation of B2B2X and B2B models. Which leads me to:
2️⃣ Fintech will become more B2B and B2BX driven largely by financial infrastructure investment and embedded finance use cases for consumers and business.
3️⃣ Technologies to watch: Generative AI, API based open connectivity, Distributed Ledger Technology, quantum and edge computing, embedded hardware and Internet of Things and biometrics. 👀
I discuss some of these more below.
3 things from Barclays and Rainmaking
This is another sharp report available here. If you want to read one report, I would recommend this one.
1️⃣️ The medium and long term future of money will be in Web3 and DeFi. This is very interesting coming from a bank rather than some random dude on twitter. According to the report, 13 of the worlds largest banks have invested $3bn into crypto and blockchain startups.
2️⃣ More vertical plays are expected, especially around embedded finance.
A boom in B2B applications is likely imminent, which will further increase focus on these offers to address untapped but high potential industry verticals.
This even refers specifically to Agriculture.
An exciting space for embedded finance is in agriculture, which as an industry has a very unique set of risks, finances and data.
🥳
3️⃣ Technologies to watch: API's, Distributed Ledger Technology, low code, AI/ ML. 👀
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💭 Tech gaps in Agrifintech
This is not supposed to be a grand vision or manifesto for agrifintech but just some thoughts inspired by the technologies above.
🛜 Internet of Things is still massively under-explored in my opinion.
Take this story listed on the Drovers site regarding a livestock fraud on a gigantic scale. This is not uncommon when any type of inventory is involved. However, IOT ear tags for cattle have been around a while. Yes, they have issues but not as many issues as taking someone’s word for it. I'm not pointing the finger at Rabo here, I bet a lot of you guys are at it! 😶
Things are hard to track. Things on the internet are much easier to track. Tracking collateral using IOT will change the dynamics of risk and I expect to see more innovation in this space. This will also allow improved pricing for risk and tailored products.
Companies that I have seen in this space include Telesense who have developed IOT enabled grain sensors which have many applications in monitoring quality and quantity of remote storage.
My good friend Antony Yousefian has joined Wiliot IOT to work on their circular food system projects using their IOT pixels - this technology is wild when you think of the applications.
Other applications I have seen include in poultry, soil sensors linked to cloud and in aquaculture.
For the epitome of IOT enabled finance outside of agriculture see this fundraise from a company in Kenya. M-Kopa demonstrate the sheer power of this technology for finance at scale.
📄 API based connectivity is one key area that still needs a lot of development, both culturally and technologically.
Culturally, APIs are an interesting phenomenon. (Yes, maybe the first and last time you read that). They are quite a collaborative tool but, like I previously wrote about interoperability, everybody loves it, as long as people interoperate with them, on their terms.
Just like this newsletter joins news dots for the sector, I like to join tech dots and would love to see more API docs to do this. However, I get the sense companies are just not there yet and I often get asked if I'm trying to compete with a company by asking for API access. It always gets me. 😂 (Should API documentation be part of a content strategy? 💭)
Moving to open API standards for agricultural finance data is still underexplored. Sandboxes are good but rare. Thankfully, some companies are moving in this direction and I expect them to nudge things along.
Leaf agriculture have been at the forefront of open API connectivity in the wider agricultural data realm. They deal with some financial services clients but beyond that, overall engagement between API's, agri data and finance data has appeared to be low.
Oh, btw - if you have API's and want to share them, reach out. 😉
🏗️ 🛤️ Infrastructure is related to the above but both reports called out the nexus of B2B2X / Infrastructure and Embedded Finance which is absolutely on point when it comes to Agrifintech.
Let's think things like B2B2F (2 Farmer) or B2B2VC (2 Value Chain) and the rails to facilitate those interactions.
As I pointed out previously 52% of all VC funds for Agrifintech last year went into embedded finance projects. This is impressive and I think quite unique when compared to other verticals.
Low code is also an interesting adjacency as pointed out by Barclays. Not everyone wants to, or needs to, develop the next Stripe 🤷♂️. I actually think low code solutions will form an interesting part of the agri finance tech stack given the different tech maturities of the wider agricultural finance audience.
🤔 Other thoughts
Interestingly, no mention of climate smart solutions in either report, but as I've written before I think Agriculture is uniquely positioned for this as a theme and it is not really a technology driver, which was probably the focus of both the above.
I haven't delved into too much detail on the impact of AI on fintech yet, but here is a great overview on the AI and Fintech nexus from the excellent Simon Taylor for anyone who wishes to explore deeper.
What do you think?
Now some News
There were a few news items that caught my eye in recent weeks.
⦿ Mastercard in India
In my last issue, I looked at the data coming out of trade platforms in India. This is yet another intriguing development in the Indian market from Mastercard.
This jumps out as it is a global financial technology brand making a deliberate play in a large, fast changing market.
⦿ Khula and ABSA
Khula, a South African platform have received investment from local banking giant ABSA.
This is great to see yet another corporate enter into the sector and also worth noting that this is the second investment from a South African bank, with Standard Bank partnering with and investing in HelloChoice, another local platform.
⦿ Farmer Mac updates
The Farmer Mac 'Feed' update went into detail in some of the US specific issues in Agricultural Finance.
➡️ In particular, they looked at Ag Banks versus non Ag Banks. According to their analysis, Ag Banks hold a significantly larger proportion of short to medium term assets, depicted below, especially when compared to Silicon Valley Bank.
In fact, organisations like Farmer Mac play a key role in mopping up those long term assets from Agri banks (farm loans), which helps those organisations with their own asset and liability management.

➡️ Farm Balance Sheets are very healthy, up 34% between 2018 and 2023, largely driven by the steep increase in farmland values, which make up 80% of assets.
➡️ Farm incomes (Net Cash Farm Income, NCFI) are predicted to drop 21% year on year in 2023, but this also reflects the fact that there has been a 6 year rise in NCFI, with 2022 reaching a record level.
That's all for this week and I hope you have enjoyed this read.
Please don't forget to share this with your network and just reach out with any feedback.