From stigmatized to revolutionary
Agribusiness is one of the most resilient segments in the economy for a simple reason: people will always need to eat. However, farms, crops and lands have always carried a certain stigma from the tech industry, as many previously viewed agribusiness as something outdated compared to the technological transformation experienced by other industries. But did you know that agribusiness has been passing through a technological revolution of its own in the last few years?
Venture capitalists take notice
Investment in agtech — technology that is applied to agribusiness — has been on the rise. Agtech has developed into its own VC investment category, with $ 6.8 bn invested in over 800 deals in just the last 3 years. Top tier VCs including Y Combinator, Khosla Ventures and Sequoia are actively doing deals in this space. Mindset Ventures has been tracking this trend since we launched and has evaluated 218 agtech deals in the past 5 years and made 5 investments.
Drones, automation and blockchain
The disruptive technologies being used in other sectors are also disrupting agribusiness. Drones were recently introduced into agriculture, and the imaging technology in this segment has developed exponentially. Real-time satellite images can be zoomed in to a level of detail unimaginable only a few years ago, when the photos were taken from airplanes. They are also smarter and can capture more than just images — the cameras and sensors in drones are capable of measuring everything from chlorophyll levels to water status of plants with incredible precision. Taranis, a Mindset Ventures’ portfolio company, is able to diagnose crop problems on farms with images taken by its cameras and sensors to a level of precision and magnification that even our naked eyes cannot see.
Automation is also becoming common in larger farms. If you watched the movie Interstellar, a good example of automation is shown with the driverless sugar cane harvesters that are capable of tracking the most efficient route to perform their job. In addition, startups have already developed devices that control temperature, humidity and the general status of stored yields in real time to prevent the quality loss of stored crops. Telesense is a Mindset Ventures’ portfolio company that executes this job with excellence. Operational flows such as harvester routes and other supply-chain related aspects can also be precisely tracked to save time and resources, as demonstrated by Fieldin, also a Mindset Ventures company.
Even blockchain has gained traction in agribusiness, allowing secure peer-to-peer transactions between producers without the need for an intermediary to reduce costs. The applications of blockchain in agriculture are exciting, ranging from supporting agricultural insurance to improving the food supply chain. Though Mindset has not yet made a blockchain investment in agtech, we are actively evaluating startups that use this technology.
Israel and Brazil — the perfect recipe for agtechs success
Israel is one of the most important agricultural technology hubs in the world and it is an important part of its culture. The population is largely made up of immigrants whose descendants found ways to turn vast desert areas into lush farms. To adequately supply water and food to its fast-growing population, Israelis innovated out of necessity, supported by public and private sector collaborations that incentivize the development of agricultural technologies. As a result, the “Startup Nation” is thriving as one of the world leaders in water and agricultural technologies.
Today’s Israeli agtech companies look internationally from the beginning, as the Israeli market is geographically limited. Brazil is a natural area for expansion due to the large, highly developed agricultural market and diversity of biomes. Partnerships between Israeli agtech startups and Brazilian partners can lead to rapid traction and the ability to accumulate large amounts of quality data to train their algorithms and build network effects. SeeTree, another Mindset Ventures company, is a great example of this expansion process. The company uses a combination of software and hardware to track the health and productivity of individual trees, and was introduced in Brazil by Mindset Ventures to monitor citrus trees for one of the largest orange producers in the world.
Mindset builds bridges between Israel and Brazil
Although combining Israeli agtech startups with the Brazilian market can generate impressive results, doing so is not easy due to different business cultures and regulatory landscapes. Local partners can assist the Israeli startups in Brazil by introducing them to potential clients and partners, helping them hire a local team and connecting them to relevant local law firms. Mindset Ventures has a strong track record of doing this successful and bridging the gap between the most promising Israeli agtech startups and the Brazilian market. Taranis and SeeTree are two excellent examples of this effort. We helped these companies build local teams, connect with customers, and negotiate contracts. These first steps are the most difficult for startups expanding internationally, especially in Brazil, which is why we focus on helping companies in this critical expansion stage. When agtech entrepreneurs develop technologies that can transform the industry, and connect with the right partners to scale the business, amazing companies are built. Mindset is honored to be a part of this process.