Smart Agriculture Investment and Transformation Is Growing

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2Q 2017 | IN-4605

Notable venture capital firms are placing significant investments to revolutionize one of the oldest industries in the world via digital farms or “ag tech.” Smart agriculture segments include, but are not limited to, farm management software (Google Ventures, Andreessen Horowitz, and Y Combinator), precision agriculture and predictive analytics (Kleiner, Perkins, Caufield & Byers (KPCB), Qualcomm Ventures), robotics and drones (Y Combinator, Google Ventures, Monsanto Growth Ventures, and KPCB Edge), as well as sensors (KPCB, Verizon Communications, SparkLabs).

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Premier Venture Capitals' Direct Funding

NEWS


Notable venture capital firms are placing significant investments to revolutionize one of the oldest industries in the world via digital farms or “ag tech.”  Smart agriculture segments include, but are not limited to, farm management software (Google Ventures, Andreessen Horowitz, and Y Combinator), precision agriculture and predictive analytics (Kleiner, Perkins, Caufield & Byers (KPCB), Qualcomm Ventures), robotics and drones (Y Combinator, Google Ventures, Monsanto Growth Ventures, and KPCB Edge), as well as sensors (KPCB, Verizon Communications, SparkLabs).

Two months ago, the World Agri-Tech Innovation Summit had its best attendance ever to discuss “Breakthrough Applications and Business Models for Sustainable Farming.” Verizon, one of many attendees, shared that agriculture was a top-five strategic IoT growth focus area. Bay area startup Blue River Technologies was awarded the Disruptive Innovation Award for its solution that accurately identifies and attacks weeds, but not the surrounding crops.

Agricultural survey drones and related services have been developing over the 5-7 years. Increasingly, automated and robotic equipment can offer huge time savings, visual analytics, greaterconsistency, and field coverage. Moreover, farm management provides enhanced ROI for livestock and crops. Sensors and gateways monitor and make recommendations based on masses of data from weather patterns, to watering, pest control, and soil conditions, as well as livestock health. Precision agriculture can also include predictive analytics and prognostics to reduce energy consumption, resolve yield challenges, and minimize inefficiencies.

Opportunities in Every Segment

IMPACT


Agricultural automation technologies include companies like Abundant Robotics, which was founded just last year and has US$12 million in funding (including funding from KPCB) to create a mechanized apple picker (type of agribot) that leverages a vacuum device to draw the fruit directly from the trees. Rowbot Systems boasts a founder that is a former research faculty member at Carnegie Mellon University. Its funding supports nitrogen management and cover crop seeding. 

Commercial drone player PrecisionHawk (investors include Verizon Ventures and Intel Capital) raised US$29 million to provide visual, thermal, multi-spectral, LiDAR, hyperspectral mapping, and analysis including agriculture as a service (software is free).  Agricultural competitor companies include Skycision, TerrAvion, and Agribotix. This provides time savings and scale, which was previously impossible.

Tel Aviv-based startup Prospera’s artificial intelligence-based solution, which raised US$7 million last year to offer machine vision, ag tech, and artificial intelligence for real-time crop information, is used by farms supporting some of the largest grocers in the U.S. and Europe, including Walmart. Blue River Technology, focused on agri-pest treatment, utilizes machine learning (ML), image recognition, and artificial intelligence and has been backed by Monsanto Growth Ventures. This has the potential to significantly address yield issues, with directed treatments for changing environments in real-time.

Sensor-focused, agri-business companies such as Arable quantifies microclimates and the development of crops via in-field measurements to address potential yield issues in real time. It received nearly US$6 million in investments and funding from the National Science Foundation.Additional companies in this market include 30MHz’s infrared temperature humidity sensors and CropX’s adaptive irrigation, which has been backed by Bosch and Flex Lab IX. 

A Scalable Model?

COMMENTARY


Other formerly traditional markets such as automotive and industrial/manufacturing are being transformed through autonomy and IoT solutions. This, however, often requires upfront availability of costly, larger-scale technology capital in order to increase yield and decrease cost per unit. Per the USDA Agriculture census, “large farms with over US$1 million in sales account for only 4% of all farms, but 66% of all sales.”  Since many U.S. farms are expected to change hands over the next five years, it is expected that technology can be both a driver of profits, as well as a potential need to scale through partnerships, new business models, and emerging skill sets. Nonetheless, per the last USDA census, Internet access by principal operator rose to 70% five years ago from 57% five years earlier.