Investment thesis: Future of Agriculture

About the agritech startups that we would like to meet

Typically, tech startups in agriculture need a longer time to mature — it’s difficult to simulate crops in the lab and iterate in short cycles as it happens in other industries. That’s why it may be a good idea to invest in agritech early in the lifetime of any fund.

That being said, at EGV, we have made a priority for 2020 to invest in agritech startups and give them both the time and the capital to grow.

Consider this blog post to be an investor’s perspective on agritech and, at the same time, a call for startups in this filed.

Technology has the power to eradicate famine on a global scale. Given Romania’s huge agricultural potential, we are actively looking to identify new technologies that make food more accessible for all by reducing waste, keeping pests under control, decreasing costs with human labor, allowing for better management of cultures and livestock, and increasing productivity.

A purely opportunistic VC is smart enough to invest in good startups that happen to knock at their doors. But the VC armed with a well-thought and well-researched investment thesis should see farther into the future.

At EGV, we are looking to invest (ideally) in three complementing and cross-pollinating agritech startups in 2020 and build on the strong synergies among these startups in the years to come. Based on how these startups collect, ingest and analyze data, we are looking for the following types of companies to invest in:

Bird’s eye view (if birds would fly at 35,000 km altitude)

This is a pure-data play, as startups in this category develop their algorithms based on data collected from satellites operated by others, such as the Copernicus network*.

The data-scientist teams we would consider for investment should prove their ability to extract meaningful and actionable insights from the layers of data provided by the satellite’s multispectral cameras. The keyword is “actionable,” and the benefits for the farmers should be quantifiable in terms of ROI and TCO.

Boots on the ground

Startups that collect data from drones, robots, and underground sensors belong to this category.

We are very keen to observe how such business models are scalable and do not require spreading a multitude of sensors across large surfaces of land.

Also, sales skills would be vital for teams taking on such a challenge, as doing (in)direct sales to farmers is not an easy job at all.

My sensors, my data

We include here startups that analyze data collected by the sensors installed on the agricultural equipment operated by farmers: tractors, weeding machines, and the likes of it.

What’s at stake in this business model is giving farmers access to their own data, making various machines talk to each other, and creating a common repository for the data collected this way.

This model is more of a marketplace or a platform play, so their marketing and community building skills must double a team’s ability to build a technological product.

Do you work on something in this field? Or are you passionate about applying technology and science to agriculture? Come talk to us.

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*Copernicus is the European Union’s Earth observation program coordinated and managed by the European Commission in partnership with the European Space Agency, the EU Member States and EU Agencies.