Agricultural startups are sprouting in lots of places; they’re being cultivated by a diverse mix of entrepreneurs.
And as those startups grow they’re attracting attention from investors and business accelerators.
“Even farmland isn’t immune to the information revolution,” wrote Chloe Sorvino and Maggie McGrath in “Forbes” magazine this past year.
Forbes published a list of its “25 Most Innovative Ag-Tech Startups.” The companies in that list alone have attracted more than $400 million in financing.
Representatives from a few of those startups recently discussed how their products and technologies in general will affect farmers. They also discussed the current investor climate.
Brennan Turner and Alain Goubau co-founded in 2013 a company called FarmLead. Their online grain marketplace brings together buyers and farmers in one central location. FarmLead has offices in Ottawa, Ontario, as well as Chicago.
“We both grew up on farms and it was a pain to find the best possible deals in the cash-grain market,” Turner said. “We’d hear rumors of better deals, but by the time we called a buyer it was too late or the deal didn’t exist.”
FarmLead doesn’t charge fees in advance. A farmer can register on the company’s website or application, and be able to immediately post grain for sale, Turner said.
“Our goal is to help farmers take charge of their grain marketing,” he said.
FarmLead doesn’t market grain itself. Instead it hosts bids online; it allows buyers and sellers to connect, negotiate and executive deals.
“A lot of farmers are in the cash-grain market and don’t do hedging,” Turner said. “And about 80 percent of the sales on FarmLead are from farmer to farmer. “
He discussed the effect agricultural startups could have on farmers in the future.
“A lot of what we’ve traditionally seen has been a focus on yield,” he said. “To be successful in the future it will have to be about improving one’s bottom line.”
The current climate is generally healthy for investor funding, but businesses involved with crops are challenged by growing seasons, he said.
“Keeping an operation running during a non-growing season costs a lot of capital,” Turner said. “It’s a challenge to tell investors when you’ll be bringing home the bacon.”
Marcelo Murachovsky, product-marketing and design manager for BovControl, said the investment climate is improving.
“We’ve seen a huge focus on agricultural technology from Israel, for example,” he said.
According to Start-Up Nation Central, an Israel non-government organization, there were more than 400 Israeli agri-technology startups in 2017. Murachovsky also points to the advance of U.S. companies such as Granular, Blue River Technologies and The Climate Corporation.
“People understand that if there aren’t enough investments in agricultural technology, we won’t have enough food,” he said.
BovControl was founded in 2013 by Danilo Leao, whose family owns a farming operation in Brazil. Leao wanted to be able to manage cattle remotely. He developed an app to collect and analyze data – such as milk production in dairies or rate of gain in beef operations. The app aggregates data from ear tags, radio-frequency-identification chips and smart scales. Currently used by about 35,000 farms worldwide, the app makes recommendations on what to do based on data collection and analysis.
Murachovsky attributes the increase in startups to declining costs of computer software and hardware.
“People have greater access to technology, and technology in agriculture is essential because there’s so much information that needs to be tracked,” he said.
Because a growing number of consumers want to know how their food is produced, he said, information tracking could become mandatory in the future.
Tracking is one of many areas being addressed by startups. Another main area is predictive analytics, said Tomer Tzach, CEO of CropX that’s based in Tel Aviv. The company was founded in 2013.
“Being able to predict water needs, fertilizer needs and possible pest outbreaks is the next big advance,” Tzach said. “Predictive analytics is just beginning to be felt by the average farmer.”
CropX makes sensors and adaptive-irrigation software. The technology tells farmers when and how much to irrigate. The sensors also measure temperature and soil electroconductivity to determine salinity levels.
“Turning off an irrigation system can save on average $400 per day,” Tzach said. “So in the course of 100 days, stopping irrigation for a week or two can save a lot of money. Approaching a traditional problem with a novel solution is key. But it’s critical for agricultural startups to also have a deep understanding of farmers, and their pain points and needs. They use technology because it helps the bottom line, not because it’s cool.”