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15th February 2018
ORANGE, AUSTRALIA - Globally 2017 wasa mammoth year for food and AgTech. Later stage deals pushed up overall funding totals, as a broader rangeof investors got more comfortable with the space. As the first wave of AgTechstart-ups mature, capital is increasingly being deployed to later stages.Rounds valued at over $25 million accounted for 61% of all 2017 Venture Capitalinvested through August 25. However, seed stage funds and specialistaccelerators also supported a strong pipeline of new early-stage AgTechbusinesses. Over the last four years, the number of seed/angel AgTechfinancings has continued to grow. The seed/angel financings recorded in 2016were a 31% jump from 2015 and that continued to grow in 2017.
SparkLabs, a global venture andaccelerator group, recently launched SparkLabs Cultiv8, a new $10m food and AgTechaccelerator based in Australia. This has been a catalyst for AgTech companiesfrom the US, and other parts of the world, to come to Australia to enhance theirbusinesses benefitting from Australia’s farming expertise, research institutionsand access to Asian markets.
Australia has always been a worldleader in agriculture. Agriculture and related activities comprise around 12%of Australia’s GDP — more than double the US. Agtech in Australia is booming. Companiesboth large and small are beginning to recognise the benefits of Australia as aplatform to build the next evolution of farm and food technology.
For example, SparkLabs Cultiv8 AgTechaccelerator, had an unanticipated influx of interest from offshore companies intheir first cohort. Guy Hudson, the program’s Managing Director said "Wespecifically designed our program to benefit from our brilliant researchcredentials, availability of land and strong path into Asian markets and itclearly resonated with a global pool of leading start-ups." Australia alreadyexports billions of dollars in products to Asia. The total amount is expectedto double by 2050, giving AgTech startups the opportunity to ride on this waveof growth by using Australia as a bridge head into Asian markets. Start-ups seeSparkLabs, a global accelerator network with programs in Korea, China, Taiwanand Australia as the perfect partner to access this market.
But, it’s not just the route toAsia that is attracting AgTech firms to Australia. The available land toexperiment and grow technology is of great benefit to entrepreneurs buildingbusinesses in AgTech.
As part of their program SparkLabs Cultiv8companies are able to access over 13,000 hectares of experimental farmland, spreadacross 4 climatic zones via the partnership with the Department of Primary Industriesand their new Global AgTech Ecosystem (GATE).
One unintended benefit of theprograms location is the ability to test equipment in both Northern andSouthern hemisphere’s summer seasons, dramatically increasing the pace ofgrowth.
NSW Minister for PrimaryIndustries, Niall Blair, said NSW was setting the pace for agriculture researchand development, drawing international investment in the GATE at Orange thatwill result in big gains for the State’s farmers.
"When it comes to adoption andutilisation of technology our farmers are the best. The GATE will fast trackinnovation into their hands – the result will see even greater strides inimproving the productivity and sustainability of our primary industries,"Minister Blair said.
"This first cohort of entrepreneurswill be joined by a local crop in Department of Primary Industries innovatorsthat will be announced next month. This group is working on State specificprojects such as drought, use of food by product, farm safety and smart grazingmanagement that will revolutionise livestock systems as we know them."
The initial cohort of 9 companies, includessome of the world’s most impactful early stage food and AgTech companies. Forexample, Ripe.io "the blockchain of food" a New York based company who are adesigning a radically transparent digital food supply chain, ripe.io harnessesquality food data to create the blockchain of food - an unprecedented foodquality network that maps the food journey to answer what’s in our food, whereit comes from, and what has happened to it. They were recognised by Forbes asone of the most innovative AgTech companies in the world in 2017. Biocarbon, anOxford, UK based team, provides regeneration services with the capacity to plant100,000 trees a day at a fraction of the cost of traditional methods bylaunching biodegradable seed pods from drones.
Other international teams include Norwaybased Aquabyte, who recently raised a $3.5m seed round, from investors likeCostanoa Ventures and New Enterprise Associates (NEA), to apply machinelearning and computer vision to dramatically optimize fish farming efficiencyand Evaptainers, a team based out of Boston who have developed an electricityfree mobile refrigeration technology to keep food fresher longer in the firstmile of the food supply chain for developing markets, using only sun and water.Smart Ag, a company started in California is working to combat the catastrophicannual loss of bees with containerised smart hives and an organic compound tocombat varroa mite.
Closer to home, Singapore basedHydroleap has developed a non-chemical water treatment technology to make wastewater treatment cheap, fast and easy in industries like agriculture, food andbeverage production, construction and mining.
But it’s not just offshorecompanies, the strength of Australia’s homegrown businesses in the sector isalso reaching new heights. Partner at SparkLabs Jonathon Quigley said " We seethis cohort as being a driver of the continued growth of the already strong AgTechsector in Australia, and supporting our role as a global leader in this space" SparkLab’sCultiv8 cohort includes companies like James Tyler, a direct-to-consumer businesswho have cracked the notoriously difficult path for the export of Australianagricultural produce to China, and Farmbot, a company providing sensors whichcan be self-installed by farmers in just 10 minutes and used anywhere inAustralasia no matter how remote with no additional infrastructure. SecureImpact, from one of the co-founders of Brick X, is a business that is usingetherium block chain technology to solve the succession problem in Australianfarms.
Research suggests that techstartups could add up to $109 billion to the Australian GDP along with creating540,000 jobs by 2033. As such, we will see some brilliant innovations comingfrom Australia as more companies recognise the opportunity to use Australia as aplatform to grow their businesses.
Forfull details of the SparkLabs Cultiv8 2018 cohort please visit www.sparklabscultiv8.com/2018
Theprogram is based in NSW, at the Orange Agricultural Institute in theGlobal AgTech Ecosystem or GATE and will commence in Q2 2018. Programparticipants will access industry leading mentors, the NSW Department ofPrimary Industries Innovation and Technology Research platforms, linkages withrelevant corporates such as KPMG Australia and MinterEllison plus exposure tothe SparkLabs Accelerator network and GAN.
Thementorship-driven program is seven months in length and provides funding,office space, a tailored program and access to a top-tier network ofentrepreneurs, venture capitalists, angel investors and executives. As a partof the program, SparkLabs Cultiv8 Accelerator participants will be able toaccess up to A$100,000 in direct investment for an agreed stake.
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