Fostering an Agtech Ecosystem in Illinois
By Laurie Redman-Steen
Pre-1900, improved breeding, fertility and rotational knowledge is considered the first ag revolution. Mechanization in the 1920s and the green revolution of the 1960s and 1970s are second and third.
“Agriculture is going through another period of rapid change,” says Jonah Kolb, managing member of Moore & Warner Ag Group, which consults on agtech and advises ISA. “Basic precision farming is giving way to digitally-rich IoT connected agriculture, machine learning and artificial intelligence, robotics and autonomous vehicles, blockchain and distributed ledger technology, and integrated platforms that start to pull it all together.”
Huge investments in agtech are being made by the incumbents – established companies like Bayer, Syngenta, Corteva, DuPont and John Deere who look to thrive in the new era – as well as a large surge of venture capital (VC) investments in startups looking to improve how food, fiber and fuel are produced and brought to consumer markets.
In 2018, VC investments in agtech reached $17 billion, a 40 percent year-over-year increase. The incumbent companies added another $15-20 billion in new research and development for 2018.
Several agrifood tech VC/private equity firms are based in Illinois. Cultivian Sandbox Ventures, S2G Ventures and Germin8 Ventures are in Chicago. Open Prairie and Serra Ventures are downstate.
Linda Kull, PhD, ISA director of ag innovation and tech transfer, says ISA supports Illinois soybean producers so they can reap the benefits of agtech innovations and so entrepreneurs and investors have access to producers to speed development, adoption and value.
The ISA checkoff program fosters an agtech ecosystem in Illinois where innovation can thrive and VC-backed startups and investors can come together with farmers, academics, industry and government decisionmakers. The ultimate goal is to help Illinois producers be the most knowledgeable, sustainable and profitable in the global marketplace and champion Illinois as an agtech hub.
“Early exposure to new ag technologies helps producers with early technology adoption to be more competitive globally,” Kull explains. “By providing grower input early, ISA helps agtech entrepreneurs hone their value proposition. We hear from agtech innovators and investors who want more access and engagement with progressive producers. They value the insights because producers are their buyers.”
As part of ISA’s agtech ecosystem efforts, Kull and her team have been building those relationships between entrepreneurs, investors, academia, government and producers. For example, ISA recently brought six progressive agtech startups to the producer-facing Tech Connect event in central Illinois.
ISA directors and leaders recently toured California to visit with Microsoft, Google X, AmazonAWS, Farmers Business Network and Granular. Earlier in 2019, ISA was a major sponsor of the World AgriTech Innovation Summit in San Francisco. And in July, ISA was responsible for bringing the 2019 major agtech event, AgTech Nexus USA, to Chicago.
“Both the World Agri-Tech Innovation Summit and AgTech Nexus USA are major networking events for startups, entrepreneurs, accelerators and investors, and ISA ensured the farmer voice was included as speakers, panelists and participants,” Kull says. “This positions the Illinois soybean industry and farmers as leaders and a catalyst for agtech adoption – not just in Illinois, but across the Midwest.”
Illinois has what it Takes
According to Kull, a successful agtech ecosystem requires a network of assets (farm ground, technology and capital); insights (agronomic, technical and business insights from the farm); and stakeholders (farmers, entrepreneurs, investors, academics, agribusinesses and government).
Ron Meeusen, PhD, managing director at Cultivian Sandbox Ventures in Chicago, has a similar view. He says three pieces are required to support a world-class agtech ecosystem: a base of world-class technology, which is typically academic; a critical mass of investors willing to take big risks on ideas; and a critical mass of serial entrepreneurs.
“Illinois has a strong academic and tech base at the University of Illinois at Urbana-Champaign,” Meeusen says. “All the major ag chemical and seed companies have a research presence there. Now we’re beginning to develop the investor base, and that’s going fairly well.
“In addition to the new specialty funds that focus on ag and food, we’re seeing more family funds and corporations setting up venture arms here in Illinois. Illinois has a big concentration of large food companies, which are rapidly becoming players in the venture space. That brings a lot of people and a lot of talent to the space,” he continues.
As for a critical mass of serial entrepreneurs, Meeusen says Illinois isn’t quite there yet. “In Boston or Silicon Valley, you’ll find serial entrepreneurs who have already built and sold two or three companies. In the Midwest, an entrepreneur will run a company for 35 years and want their kids to take it over. The culture is a little different here.”
However, Meeusen is strongly optimistic about the current growth prospects for agtech in Illinois. “We’re not seeing a bubble – it’s growing steadily,” he says.
In July at the AgTech Nexus USA event, Meeusen facilitated a panel discussion for ISA about how new technologies can contribute to sustainability in agriculture, with a specific emphasis on soil preservation.
“Two of our investments at Cultivian are in soil sustainability. One is a remote monitoring system that goes under center pivots. It measures soil moisture every four inches and senses how deep the roots go, so you can tell how deeply you’ve watered and avoid watering past the roots,” Meeusen says. “You know when to water and when not to, so you use less water and don’t waste fertilizer.
“Our other soil sustainability investment is with a company in Germany that converts low-grade lignite coal into a soil amendment. It releases nitrogen slowly, improves soil structure just like organic matter and lasts years in the soil,” he adds. “Lignite coal is organic matter that’s 20 million years old.”
Meeusen’s firm evaluates roughly 350 new agtech opportunities every year. He’s been in agriculture for 40 years – the last 10 as a venture capitalist. He started his career during the first wave in biotech, three years before the first Bt gene was spliced into a corn plant. So, he has an informed perspective.
“This is the most exciting time I can remember,” he says. “Agtech is moving as fast as tech is in any other area. There are lots of new tools coming farmers’ way that they can try.”
Kull is excited to see an Illinois agtech ecosystem gel. “ISA is dedicated to making it happen faster in Illinois. It’s not about any one agtech company or solution – it’s about creating a culture of innovation with value creation at the farm level and ensuring Illinois farmers thrive in a changing world.”