龙8娱乐app下载报道Why Agtech Venture Capital Funding is Flourishing_龙8娱乐app下载官网资讯

Ag Funder

Venture capital money is pouring into startups in the agriculture sector. AgFunder founder Rob Leclerc explains why.

It鈥檚 not quite in Silicon Valley鈥檚 usual stratosphere, but it is noteworthy nonetheless: In 2018, investment in agricultural technology (agtech) startups totaled almost $7 billion. That鈥檚 a drop in the bucket compared to the $55.3 billion invested in new financial technology companies, but still a 44 percent increase over the previous year, and a huge jump from the $1.5 billion invested just five years before.

This category, which includes everything from sensors and software for precision farming to genetically modified food, enjoyed significant gains over 2017 in seed-stage activity involving companies just opening their doors (up nearly 15 percent) and average investment size (up 50 percent).

Among the venture capital firms at the center of this activity鈥攁nd partly responsible for it鈥攊s AgFunder, a San Francisco鈥揵ased outfit that debuted in 2012 as a database and news curator for what was then a fledgling agtech venture capital marketplace. In 2017, AgFunder branched out and started its own venture fund, which today commands over $20 million in assets and boasts more than a dozen startups in its portfolio.

To get a sense of how agtech鈥檚 entrepreneurial landscape is affecting the future of farming, we asked Rob Leclerc, who cofounded AgFunder with his partner, Michael Dean, to offer some observations and insights from his experience. LeClerc, who has a Ph.D. in Computational Biology from Yale, chose to devote his energy to agricultural technology because 鈥渋t was an industry with substance. When you think about the hierarchy of needs, food and agriculture sits at the critical bottom.鈥

What initially made you think that the agtech market was worth paying attention to?

Leclerc: My AgFunder cofounder and I had been helping set up agriculture projects in the West African countries of Burkina Faso and Mali. During that time, we tried to look at technologies we could introduce to help manage and improve the operations we were building there. And it was really shallow. All of the conversation was really around traditional, big ag innovation, like gene modification. There were very few ideas involving digital technologies. But we could see that some of the recent advances and new ideas in the pipeline could change this. We were starting to see people talking about small digital satellites that could be used to map farmland around the world, and setting up precision agriculture and real-time farm management protocols. Then there was mobile computing and the cloud, breakthroughs in energy storage to give you remote power, high-speed Internet connectivity wherever you were on the farm, and improvements in sensors so they could be put on farm equipment to coordinate with cloud and satellite data.

How many startup business plans come across your desk?

We review nearly 200 companies a month and we invest in maybe one company every five or six weeks. So absolutely, we have to have a very, very low-pass filter. There are a lot of things out there that are not investible.

Has the agtech market evolved as you expected it to?

Startup success in the precision agriculture, chemicals usage, crop management, and crop health areas has been slow. The barriers to producing a product that provides real value at an affordable price point for farmers are high.

AgFunder
AgFunder
鈥淭he barriers to producing a product that provides real value at an affordable price point for farmers are high.鈥

In the tech world that we are used to鈥攖he enterprise and consumer environment鈥攁 startup has technology from hundreds of other companies to rely on to produce a new product. But if you are an agtech company, you don鈥檛 have that deep well of resources to dip into yet. Mapping, sensors, the Internet of Things, connectivity, the cloud鈥攁ll of these critical technologies are still evolving, and in many cases aren鈥檛 robust enough yet when it comes to knitting them together for managing farm activities.

That鈥檚 why a core piece of our investment thesis is to find the category-defining technologies that are transforming other industries, and modifying those technologies for food and agriculture.

Do you see that changing anytime soon?

Yes. As the enabling technologies mature, middleware providers will develop ways to integrate all of these advances, and agtech companies won鈥檛 have to boil the ocean to build an app. They can basically identify the data or communications and machine intelligence capabilities they need, buy them, plug them in, and spend time on solving a problem with their product.

What agtech applications will most benefit from the emergence of these supporting technologies during the coming years?

In the next three to four years, we鈥檙e going to start to see real value coming from agricultural drone software. Certainly there are a lot of drones out there now, but the problems they need to solve鈥攖aking complex imagery, labeling it, stitching it together, analyzing it鈥攁re really hard. And we鈥檙e not yet at the stage where drones can do sophisticated crop scouting in an automated way, clearly identifying pests and diseases and then reporting that back to equipment operators.

That鈥檚 in the short term. On the five-to six-year horizon, agricultural robots, the Holy Grail, will become very, very viable. And that鈥檚 important because almost all agtech is driven by replacing labor with capital to drive efficiencies and benefits and reduce overall costs. We will need to get to a point where mechanical manipulation on a farm鈥攎achine harvesting of all kinds of crops鈥攊s perfected.

AgFunder
AgFunder
鈥淥n the five to six-year horizon, agricultural robots, the Holy Grail, will become very, very viable.鈥

Sounds expensive. Will farmers be able to afford them?

The likely sales model will be robots as a service. The idea is that somebody will offer a grower a robot that can do apple picking and cleaning, saying that it will lower labor costs and increase volume and deal with pests and disease in the field. And it won鈥檛 really cost much because you could pay for it monthly out of your savings and improved yield. The farmer frees up cash while having the same or better results and uses this money to buy more land or technology for more efficiency gains.

Given the still evolving nature of agtech, what startup illustrates a unique idea that is already making a difference?

One of the companies in our portfolio is Trace Genomics, which we call 23andMe for soil. We have long known the chemical and physical properties of soil, but we have very little information about the biological properties of soil, and how they contribute to yield and plant health and crop protection. Trace Genomics applies a sequencing process to soil that can index and quantify the presence of millions of microbes in the soil. Perhaps it finds the resident pathogens in the soil that are intrinsically limiting yields or determines that the soil doesn鈥檛 have the microbial diversity to produce at a high level. Knowing that, Trace Genomics can prescribe soil treatments to move towards the end goal that the farmer is looking for.

Farmers have been struggling recently with lagging commodity price and global economic uncertainty. Are you worried this will slow the trajectory of agtech?

Quite the opposite. Tough times are telling farmers that growth can鈥檛 be counted on solely from expanding markets and sales. We鈥檝e got much of what is available from globalization already. So what do you have left for growth? Technology can cut costs and resource use, improve yields, and boot sustainability. We believe agtech is a recession-proof investment. Because if you鈥檙e a farmer, you won鈥檛 find a lot of growth opportunities outside of applying technology.

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