By Sarah Nolet - Agthentic
This year there was a step change in Australia’s agtech activities and a growing groundswell of momentum for agrifood innovation. With the year coming to a close, I’ve been reflecting on how far and fast Aussie agtech has come, and what we can look forward to (and watch out for) in 2018.
Agtech enters the mainstream
Since the release of Powering Growth by StartupAus and KPMG calling for agtech to help grow agrifood in Australia “to $100 billion in export earnings by 2030”, the agtech ecosystem has been maturing. And it’s not just coming from the tech community; industry bodies, research organizations, government and investors are all keen on agtech.
Take hyperspectral remote sensing startup, FluroSat, as an example. After completing the GrowLab accelerator program (supported by the MLA Donor Company [MDC]) and winning runner-up at TechCrunch Startup BattleField Australia, FluroSat secured $1M in investment from Cotton Research and Development Corporation, Main Sequence Ventures, and Airtree Ventures. This investment, and the FluroSat journey, demonstrates just how far the agtech ecosystem has come, and how it’s truly entered the mainstream.
Farmers, who are critical to the success of innovation in agriculture, are also playing an increasing role in the agtech ecosystem. In their work with emerging leaders in agriculture, AgriFutures Australia found that over 50% of these leaders see agtech as important for the future of the industry and their careers. One path for farmers in Australia is to develop their own entrepreneurial skills, for example through MDC’s Producer Innovation Fast Track Program.
I have been lucky enough to work with seven farmer-entrepreneurs in the new venture development stream of this program, and could not be more excited about their potential to bring innovations and new ways of thinking to the industry.
The growing landscape of agrifood startups and support resources
Still not convinced that agrifood innovation is a thing that’s here to stay? Perhaps the number of agtech and foodtech startups- over 140 by our count- will change your mind. These startups span the value chain, and come from all states and geographies of Australia.
While it’s still early days for many of these startups, Australian agtech startups have begun to raise capital and expand internationally. Examples include AgriWebb ($8M+), FarmBot (~$1M), The Yield ($7.4M), Agersens ($2.3M), Agworld ($11.5M), and Observant (acquired by Jain).
The landscape of support for agtech innovators is expanding as well. For example, SproutX, Australia’s first dedicated agtech accelerator and venture capital fund, which features support from the Victorian government and industry players such as RuralCo and Ridleys, graduated their first cohort of agtech startups late this year. Many of these companies have secured industry partnerships, commercial trials, and/or capital investment.
But SproutX is no longer the only accelerator program for agrifood in Australia. Seven other accelerators (and incubators…the lines here are still blurry) have emerged to support innovators in Australia. In addition to accelerators, other resources with different value propositions to startups and business models, such as conferences, pitch competitions, and prizes, have hit the scene.
Avoiding the agtech hype
All of this growing momentum for agtech in Australia is exciting and promising; but, we don’t yet have a flourishing ecosystem that’s guaranteed to avoid the hype and deliver on the potential value of agtech. While Australia isn’t ever likely to become the next Silicon Valley (or Israel) — we can still build a successful, collaborative, and internationally relevant ecosystem.
To do so, it’s important to focus on initiatives that are practical and productive. Let’s grow the pie for Australia, rather than worry about which slice of the pie we all own. And let’s not lose sight of the big picture vision for the success of this new industry.
How do we do this? Here are a few ideas:
Focus on Australia’s competitive advantages - There are many in agriculture, but strength of research is surely one. Agtech, and startups especially, have huge potential to unlock the value of the rural R&D system, and ultimately deliver value back to industry. RDC, farmer, and corporate support are critical, as is a change in mindset toward a more user-centric and agile view of extension.
Bring the farmers into the fold- A successful agtech ecosystem is one in which technology, agronomy, production, business, and investment experts can work collaboratively, and with aligned incentives, to bring innovations to market. The problems in this industry are complex, and solving them will require interdisciplinary teams (e.g., existing agriculture and technology SMEs working with agtech startups) and a commitment to farmer-centric design.
Build a founder-friendly support pipeline- Startups do not divide their market across traditional industry lines. Not everyone needs an incubator. Startups are not small versions of big companies or quick versions of research organizations. And no one can “own” agtech. Everyone wins in the long run if we take a founder-friendly approach to startup support, from building capacity for entrepreneurship through to expanding internationally and raising multi-million dollar funding rounds. This means collaboration across states and industries and support resources (e.g., accelerators, consultants, events) with clear value propositions and founder-friendly terms.
Calling all agrifood entrepreneurs
Agrifood tech startups will, and already are, revolutionizing agriculture around the world. These technologies and business model innovations are coming to Australia. As we build an agtech ecosystem here, we have the opportunity to harness (or harvest) the potential of our entrepreneurs, and build capacity for entrepreneurship across the industry. Though I don’t believe everyone can be an entrepreneur, I do believe anyone can; entrepreneurship is a particular skillset and mindset, and it can be learned.
I’m committed to the vision of Australia as a global leader in agtech, and in 2018 I’ll be working to leverage Australia’s competitive advantages, bring farmers into the fold, and build a founder-friendly support pipeline to make this a reality. Who’s in?