The inevitable rise of agtech and how to play it

The inevitable growth of agtech, with its $300bn market growing at 7% CAGR, should not be overlooked. Companies in the industry offer attractive returns in excess of the cost of capital, consistently outperforming across the cycle. Dan Waterman delves deep into the market and identifies companies positively exposed to agtech themes, including ACGO, Deere, Genus, Zoetis, Darling Ingredients and Novozymes. Expect agchem manufacturers to feel the pressure in the face of increasing regulation, including BASF, Bayer and Nufarm.

- 21 January, 2022

Trupanion (TRUP)

Financials

MYST Advisors

Real competition has finally arrived - will result in higher CAC and lower ARPU for TRUP. Zoetis' pet insurance offering (Pumpkin) has gained traction in the market YTD. Its ability to bundle multiple services allows ZTS to offer Wellness Programs at a superior value, while Lemonade also poses a significant threat. Estimates Pumpkin and LMND are priced ~15%-25% below comparable TRUP plans. Negative impact is already evident: unique visitors to TRUP’s websites decelerated sharply y/y in April and May; Credit card panel data shows a deceleration in spending trends for the company; Pet Acquisition Costs increased to $279 vs. $200 pre-Covid. TP $60 (48% downside).

- 23 July, 2021