7 ag-tech startups with the right ingredients
Meat giant Tyson Foods committed $150 million in December to a new venture investment fund arm — one dedicated to funding startups that are tackling a broad range of challenges including safety, resource management and food waste.
The company’s 5 percent ownership stake in plant-based protein product Beyond Meat, which was announced earlier, will be managed by the organization.
"This fund is about broadening our exposure to innovative, new forms of protein and ways of product food, while remaining focused on our core fresh meats, poultry and prepared foods businesses, which are also experiencing tremendous consumer demand and growth," said Monica McGurk, Tyson’s executive vice president of strategy and new ventures, and president of the Tyson foodservice organization, in a statement.
The move is notable not just because it’s a substantial sum of money but because other massive food companies including General Mills, Kellogg and Campbell Soup have set up similar organizations that will back food entrepreneurs. The interest is understandable, given that agtech funding in early-stage companies reached about $1.75 billion in the first half of 2016, according to research from AgFunder. That was a slower pace than 2015, but there were more deals done, it reports. Suffice to say, traditional food companies want to make sure they’re represented on the menu.
The ag-tech descriptor covers a very broad spectrum of topics. So, that aggregate amount includes the money that’s going into protein alternatives and fake meat startups, as well as a whole slew of biotech firms. The biggest deal of the year, for example, involved a $100 million funding infusion for Indigo in Charlestown, Massachusetts. The company’s first commercial product, Indigo Cotton, is a seed coating that helps the plants use water more efficiently. Elsewhere, Ripple Foods, the new company that using peas, not almonds or soy beans, to make alternative milk — started by Method co-founder Adam Lowry — raised the same sum.
The vast majority of ag-tech funding during 2016, however, went toward tech startups concentrating on data analytics, sensors, and robotics technologies, according to a report by AgFunder and Boston Consulting Group. Indeed, almost half of the companies consulted for the report listed big data as a top-five priority for agribusiness; agricultural equipment companies were the biggest investors in that category. One of the more notable companies to emerge over the past 12 months was Farmers Business Network, founded by a former Google program manager. So far, it has raised close to $44 million for its analytics service.
With that in mind, here are seven data collection and analysis tech startups to watch in 2017, based not just on the new money these entrepreneurs have attracted in the past 12 months but also on the stature of the investors who want in on their idea. (Our list is presented alphabetically.)
The four-year-yield firm in Champaign, Illinois, was founded by agronomists, atmospheric scientists and software developers that are using predictive analytics to help growers improve yields. Its $4.1 million Series A funding round including Archer Daniels Midland, which will help distribute its data services.
The two-year-old company, based in Menlo Park, California, is combining genomics and data science to address food safety issues and to provide both food companies and consumers with more information about an items’ ingredients. The software could be used, for example, to verify that something is free of genetically modified organisms (GMOs). So far, Clear Labs has raised almost $20 million, including a $13 round in mid-December led by Wing Venture Capital, Google Ventures and the giant Chinese mobile phone company Tencent. It recently added a former Food and Drug Administration deputy commission to its board.
The three-year-old company, based in both San Francisco and Tel Aviv, uses data to analyze farmland for soil quality. The idea is to help farmers irrigate their crops more efficiently. In early April, the company added sensor maker Robert Bosch and contract manufacturing giant Flextronics to its $10 million Series A round. Google chairman Eric Schmidt is also an investor, through his venture firm Innovation Endeavors.
The Winnipeg data management and precision agriculture company raised around $43 million in early 2016 from several very high-profile investors including Mitsui, which has a hand in procuring almost 17.5 million tons of grains, corn and soybeans annually, along with legendary venture capital firm Kleiner Perkins Caufield & Byers. Farmers Edge is expanding into South America, Australia, and Eastern Europe.
The Denver-based cloud software company, which specializes in evaluating data related to water irrigation, was among one of the first investments of Monsanto Growth Ventures, which invests in entrepreneurs addressing productivity and digital agriculture. So far, HydroBio has raised about $3 million.
Based in Tel Aviv, Israel, the artificial intelligence company already has some pretty high-profile customers for its software, which uses images from field cameras to guide water management. They include farms that sell to grocery giants Walmart, Sainsbury’s and Tesco.
"Recent breakthroughs in machine learning, combined with the commoditization of cloud computing and sensors, have made it possible for us to develop field-analytics solutions that predict and improve performance in a new and revolutionary way," said Prospera co-founder Daniel Koppel in a statement. Prospera raised $7 million in July, lead by well-known venture capital firm Bessemer Venture Partners.
This Canadian company uses sensors and robotics technologies to collect metrics for a cloud-based service that offers agribusinesses information about crop production trends and field conditions — this is a big area of activity. The company’s latest round, an $11 million infusion June 22, was led by McCain Foods, one of the world’s largest producers of frozen french fries.
"Having one of the largest names in the global agriculture business back our vision for Resson is a clear indication that the company is on the right track in this multi-trillion dollar industry," said Jeff Grammer, executive chairman of Resson and partner at Rho Canada Ventures.