Australia: The National Farmers’ Federation has teamed up with financial services firm Findex to launch a $10 million fund, with start-up accelerator services to spur innovation among start-ups and tech players targeting the agricultural sector.
The initiatives, which are the first of their kind in the so-called agtech space, will be run by a new body called SproutX, which will be led by former wool and beef farmer Sam Trethewey.
Mr Trethewey said his background as a farmer would help keep the programs focused on innovations that farmers actually need.
“For SproutX close relationships with farmers in the industry is very important. Overseas accelerators can be quite fluffy and they lose track of what they want to achieve, but by keeping a close connection with farmers it makes sure you’re solving problems they actually have,” he said.
On Friday the first of the initiatives, a pre-accelerator, will launch with the aim of building support and develop innovative ideas within the agriculture community.
The pre-accelerator will accept 100 applicants across the country which it believes could be commercialised, but are still at the ideas level, for an eight-week program wherein they will be taught business schools and have access to mentors and a support network.
This program will precede the launch of the accelerator and accompanying $10 million fund in the first quarter of 2017.
“Previously, innovation, start-ups, entrepreneurs and anyone wanting to start a new business in agtech has been hampered by the lack of co-ordination in Australia,” Mr Trethewey said.
“We don’t have a lot going on as the eye sees it, but when you dig in you see there’s a lot of people creating wonderful things, but there’s been no alignment or support.”
The Victorian government is contributing $1 million toward SproutX and it has also won the support of major agribusiness Ruralco and independent financial advice firm Findex, which has 18,000 agricultural businesses on its books.
These firms are contributing financially. The $10 million fund is also being supported by Artesian Venture Partners.
Co-founder of early stage agtech business MimicTec, Sarah Last, said the agtech industry had a “chicken and egg problem” wherein farmers didn’t talk to innovators without a product, but product development required the insight of farmers.
“Early stage funding and the connections to farms to actually test and commercialise our ideas are crucial to agtech,” she said.
“Accelerator programs such as SproutX can provide more specialised support for agtech start-ups, which can have a different and often longer product development cycle compared to straight tech start-ups. And there’s also an inherent disconnect with our customers, who are in rural Australia whereas most entrepreneurs are in city centres.”
Ms Last’s business is developing a product that reduces stress in chickens to decrease mortality rates by at least 20 per cent and improve feed conversion ratios for poultry production.
The product is still being made into a prototype, but academic and commercial trials are expected to start early in 2017.
Deloitte has estimated that the agribusiness sector will grow more than 10 per cent faster than global gross domestic product, led by agtech businesses.
Agriculture and related activities also comprise about 12 per cent of Australia’s GDP, more than double the US, and is expected to generate $1.2 trillion in the next 15 years.
Mr Trethewey said that while SproutX was based in Victoria, it’s a national program and did not require participants in the accelerators to relocate. It’s also hoping to receive more support from the public sector and big businesses.
“For Australia to remain competitive globally we need to become more efficient. We are the second least subsidised agricultural economy in the world, so we’re good at doing more with less, but we don’t have more land or water so we have to do more with what we have and agtech innovation is what we need to increase efficiencies,” he said.