I firmly believe that AgriFoodTech is among the best investment opportunities today. Agriculture is the world’s largest sector, employing over 1 billion people and generating over $1.3 trillion of food, annually. As a global society, we’re facing a major challenge in the coming decade to feed a rising population in the face of an increasingly rapidly changing climate. And, we’ve got to do it using less land and producing fewer emissions. It’s a daunting challenge, but it’s also a huge opportunity, particularly for innovators.
At the Yield Lab, we invest primarily through our accelerators. Currently, we operate accelerators in St. Louis, Missouri (the Yield Lab North America), Argentina (the Yield Lab LatAm), and Ireland (the Yield Lab Europe.) Our accelerator includes a $100,000 equity investment, individual mentorship from one of our managing directors, and cohort-based accelerator content. We’re non-residential and geography-agnostic in our investments, but we do require that companies in our accelerator programs meet in person 6 times over the course of the year. The vast majority of the technologies in which we’re invested have a sales or development cycle that is dependent upon the growing season, so we’ve found that it’s necessary to alter the traditional intensive accelerator model to fit the agtech industry. The added benefits of spreading programming out is minimal disruption to business operations, as well as an ability to customize programming sessions to each company in the programs’ needs at any point in time. Our managing directors largely come from executive agribusiness positions, so they’ve got a deep understanding of the international agribusiness ecosystems and the associated networks. Each managing director mentors one or two active accelerator companies each year, based upon their skillsets, typically serves as a board observer (non-voting), and serves as the liaison between our portfolio companies and our program management staff. This model enables us to keep close tabs on the portfolio companies, and enables us to provide support as is necessary.
"Human ingenuity is capable of producing the tastiest and most nutritious food and distributing it efficiently, all while regenerating agricultural land"
Each of the Yield Lab accelerators make the majority of its investments through annual application drives, with each accelerator operating independent drives and selection processes. In the 4 years since our first accelerator vintage, we’ve reviewed over 800 applications from over 68 countries around the world. We most commonly participate in seed or seed-equivalent rounds, and we’re investing in such a variety of technology types (SaaS products scale faster than animal vaccines or crop breeding.) As a result, we find one-size-fits-all forced evaluation metrics to be counterproductive. Instead, we evaluate companies individually based upon what we consider to be key criteria— founding team (coachability, capability, relevant experience or access to relevant experience); market opportunity (is there a clear path to deploy technology across a large enough market?); impact (all of the technologies in which we invest must have a clearly stated direct environmental or social impact); value-add/fit (can we help, and can we help more than we might be able to help another company?).
Through these applications, I see a lot of what’s happening in the assorted subsectors of agriculture technology. As I reported in my response to Finistere’s semi-annual report, I continue to see a lot of action in the traditional precision Ag space and imagery space. I’m pleased to observe an increase in companies that are focused upon driving ROI to the grower and actually addressing customer pain points. It continues to be a crowded field, but that is in large part due to the huge potential of big data to drive agriculture towards sustainability, both economically and environmentally. The opportunity is there, but it’s becoming ever-more-important for companies to clearly differentiate themselves in this, and many other spaces.
Other hot sub-sectors right now include aquaculture, alternative proteins, financial technology services to improve traceability and connect stakeholders at various points of the supply chain, biologics with increasingly well understood modes of action, and robotic/ autonomous/software-based solutions to labor shortages. While I’m really looking forward to seeing solutions in these specific areas, I hesitate to box my expectations into specific subsectors. I would go so far as to resist boxing certain technologies into “agriculture” or “financial” or “biomedical,” as the intersection of these broader categories is also powerful. I tend to believe that the most transformative technologies are going to span sectors and lie in between the cracks of others. Companies like Farmer’s Business Network or Indigo Ag that manage to connect CPGs with producers are fascinating examples of intersectionality. Cryocyte has transposed traditional breeding into aquaculture, and AGERPoint was born from applying architectural technology to perennial crops.
I’m writing this while on vacation in the Swiss Alps with my family, and I spent the better part of my hike today marveling over the old school straw balers functioning on 20 percent + graded slopes and giant Herens cattle (they have this crazy breed of fighting cows in the Valais region of Switzerland.) The fact that anyone is able to get anything done, let alone produce superior quality agricultural exports, at 1370+m above sea level is inspiring. Human ingenuity is capable of producing the tastiest and most nutritious food and distributing it efficiently, all while regenerating agricultural land. I am incredibly optimistic that we will rise to the challenge of sustainably and equitably feeding a growing population in an increasingly volatile climate.