AgTech is the future for Australian farmers: be relevant, different, and prepared
Once defined as the country whose prosperity rode on the sheep’s back, Australian agribusiness is redefining itself through AgTech. Where once our farmers rode a stockhorse, a quad bike or a combine harvester many are now taking their digital tablet into the paddock and steering a drone.
At first glance of AgFunder’s 2016 investment report, you may think interest in AgTech has faded. AgFunder reports that global investment dollars into AgTech declined by 30 percent compared to 2015. But the good news is the number of AgTech deals have increased and new investors are entering the market.
While globally venture capital activity declined 24 percent compared to the prior year, AgTech bucked the trend with a 10 percent increase in the number of deals closed. The AgTech industry still attracted $3.2 billion in venture capital.
There are some great Australian AgTech ideas making an impact here and internationally. Australian startups are working to apply technology such as sensors, precision technology, farm management software, robots, online marketplaces for labour and assets, drones, and herd management technology to improve yields and quality, and reduce farm costs.
Australian AgTech startups The Yield and AgriWebb were named in the top 5 most innovative international pre-series A startups. The Yield has presented at the World Agri-Tech Investment Symposium in London and been named in the APAC CIO Outlook 50 most promising Microsoft solution providers. Full Profile’s blockchain solution for grain trading has successfully completed its first pilot and the company now plans to expand into livestock as well as internationally into Canada and Europe. SenseAg has featured at IBM’s World of Watson event in Las Vegas and in late 2016 picked up first prize in IBM Apache Spark™ Makers Build competition.
Productive AgTech conversations are now taking place in Australia across industry, start-ups, government, and investors. There is a regular pipeline of forums showcasing home-grown technology aiming to attract investment. Government bodies and departments are beginning to invest into technology commercialisation funds and our nation’s first AgTech accelerator, SproutX, is up and running.
The momentum is building fast and international investors are beginning to show interest in Australia’s AgTech market. So if you have a great AgTech idea and are looking to capture interest and attract investment, here are three important tips.
- Be relevant – Remember that the technology itself isn’t the solution; it’s a tool. For your AgTech product to gain interest from potential investors and customers, it must solve a real problem that someone will pay you to fix. Spend time understanding the industry, its stakeholders and the challenges. Think about who really cares about the problem you are solving and who will pay money for it. Perhaps your customer isn’t the farmer, but someone further along the supply chain.
- Be different – When you have a great idea, do your due diligence to check if someone else has already had the same one. If your idea is different, know your value proposition and be able to clearly articulate it.
- Be prepared – Make your investment case easy. Investors are looking for a validated value proposition (ideally that means customers), a business plan, and attractive growth projections. Don’t forget the basics too – a website, a unique company name, a qualified team and business advisors. It’s not enough to have an idea and an early prototype.
There is a multi-billion dollar AgTech industry out there, go get it.
Article first published in The Land.