The need for tech innovation to help farmers become more efficient and address food waste, drought, labor shortages, and other problems has never been greater. And venture capitalists are ready to invest. Last year agriculture food (agrifood) tech funding grew by nearly 30 percent over 2016, according to AgFunder, which invests in agtech companies. Last year US $2.6 billion was raised for farm technology businesses.
“The world’s population is increasing rapidly, so there’s a great need to improve efficiencies in farming and provide farmers with a means of subsistence,” says Theofanis “Fanis” Tsoulouhas. A professor of financial management at the University of California, Merced, and director of the school’s Innovation and Entrepreneurship Lab, Tsoulouhas helped spearhead the school’s agtech program, which launched last year.
Here’s where to find opportunities and investors in the emerging field.
KNOW YOUR CUSTOMER
Engineers can contribute in many ways to the agtech field: software to better manage crop production, big data and predictive analytics to increase yield, drones and smart sensors to monitor crop health and soil quality, and data analysis to improve seed quality.
Just like any business, you need to do your market research and understand your customers. That means meeting with farmers to get a better understanding about their operations and what challenges they face.
That’s what IEEE Senior Member Stefano Carpin did. He’s a professor of electrical engineering and computer science at UC Merced. Carpin and other researchers met with California grape growers to discuss how technology could help them. The growers asked if their irrigation systems could be made to reduce the amount of water they used, and with less human intervention. The researchers came up with the Robot-Assisted Precision Irrigation Delivery system. RAPID involves inexpensive, adjustable, plastic water emitters attached to the holes in drip irrigation lines. Each emitter can help regulate the amount of water discharged. And because there aren’t enough workers to adjust the hundreds of emitters each vineyard is expected to need, the group is designing rugged, battery-operated, mobile robots to handle the job.
Because most engineers have never set foot on a farm, UC Merced’s agtech program ensures its students visit farmers in the nearby San Joaquin Valley, one of the most productive agricultural regions in the world. More than 200 crops are grown there. Students learn about food processing and efficient ways to organize agricultural production, especially on a large scale, Tsoulouhas says. They then go back to the lab to explore technologies that can meet farmers’ needs.
Another way to get up to speed on how technologies can benefit farmers is to attend agtech-related conferences such as the IEEE Vertical and Topical Summit on Agriculture, which covers how the Internet of Things can be used with horticulture, cereal crops, animal husbandry, and related fields.
FOLLOW THE MONEY
Financial literacy is key to running any company, Tsoulouhas says. That includes understanding how to raise money for your venture on crowdfunding platforms and pitching to venture capitalists.
Tsoulouhas says initial coin offerings—a means of crowdfunding centered around cryptocurrency—are becoming one of the hottest vehicles for startups. According to CoinSchedule.com, there were more than 200 last year.
Senior Member Joseph Wei, cofounder of hardware incubator Lab360, who has invested in an agtech company, suggests checking out Royse AgTech. It supports companies focused on creating technologies for the agriculture and food industries. Royse connects promising startups with markets, financiers, and partners. For select startup companies, it hosts demo days and pitch sessions with farmers, companies, and investors.
Wei also recommends looking at microfunds and applying for grants and funding from government agencies that help small businesses. In the United States, he suggests the Small Business Innovation Research program.
Another place to seek funding is from IEEE’s network of members, Wei notes.
“IEEE has a lot of luminary members who might be interested in investing in your startup,” he says. “They understand what I call deep technologies, like chips, and can relate to what you are trying to accomplish.”
He invested in IEEE Member Manu Pillai’s startup, WaterBit. It’s a precision agriculture irrigation company that uses wireless sensors to automate the amount of water needed for irrigation based on weather conditions. Using WaterBit, farmers can monitor and manage irrigation with a mobile device.
Wei and Pillai met through the IEEE Santa Clara Valley Section, in California, which Wei chairs. Pillai approached Wei in 2014 about his startup after learning about Lab360.
“I explained that he had to be fully committed to his company before we would invest,” Wei says. “After six months, he proved to me that he was.” Pillai had recruited a cofounder. He also demonstrated that his idea was unique and that he had the technical skills to follow through. The company now employs 13 people and is led by executives who previously worked at Fujitsu and Cypress Semiconductor.
There’s also the IEEE N3XT program, which seeks out ventures with engineering-driven innovation at their core, and ones that align with IEEE’s mission to advance technology for humanity. The program aims to help founders take their venture to the next level by connecting them with technical experts, funding sources, strategic partners, and news media exposure.
The agtech startup Solho was selected as an IEEE N3XT Star. Solho, a green energy company in Delft, the Netherlands, is working on a solar energy system that could support a greenhouse untethered from the electric grid. The founders are developing the Sprhout system, which is designed to harness heat from the sun and convert it to electricity to power greenhouses’ heating, cooling, and irrigation. The system will use automation software that will allow remote control, the company says.
Read the entire article on IEEE The Institute here.