A world-first venture capital fund has been established by Australian farmers to support new software startups that aim to address the most pressing issues facing agriculture.
The $60 million fund, which will be delivered by research and development organization Hort Innovation in collaboration with investment firm Artesian, will look for goods and services that could increase the productivity and sustainability of growers of fruits, vegetables, and nuts.
Chief executive Brett Fifield stated that he anticipated the fund, which is thought to be the first horticulture-specific venture capital fund in the world, would draw in both domestic and foreign inventors who are about to commercialize their ideas.
Farming more intelligently
Farmers like Gavin Devaney, who grows bananas in the Great Barrier Reef, are using technology to ensure the survival of their farms in the face of declining consumption and growing expenses.
A tech hotbed, Mr. Devaney’s 101-hectare property is tucked away between the Great Barrier Reef and the range that contains Mount Bartle Frere, Queensland’s highest mountain. It produces 250,000 15-kilogram cartons of bananas annually.
To keep debris and nutrients from destroying the distinctive shoreline, water runoff and fertilizer use are strictly controlled and intensively monitored in the world heritage-listed area.
However, managing water during a flood is especially difficult in Australia, which is thought to have the wettest climate in the world, with an average yearly rainfall of almost 3,500 mm.
“We don’t have a problem with trying to irrigate — we have a problem with trying to get rid of the water,” said Delaney.
In order to reduce sediment and nutrient run-off, Mr. Devaney resorted to Reef Extension Officer William Darveniza in 2019 after purchasing a nearby cane property to turn into a banana plantation.
“It started out with us seeing how we could get the water into an industrial-style developed drain and seeing whether the water could denitrify [remove nitrogen] itself,” he explained.
“We worked out that the water plants and everything in [the drain] were able to do that — we nearly got it down to zero [nitrogen in the water].”
It sparked a three-year smart farming initiative supported by multiple organizations that tracks everything from the amount of water and fertilizer used to the weather during spraying and the rows that people or equipment have been in to minimize soil compaction and double-handling.
“The project is definitely ongoing — it’s not something that can stop,” said Devaney.
“I’ve worked better angles around how I can actually innovate more and hopefully create changes that make it easier on farmers to farm.”
Increasing annoyance
Mr. Devaney is part of an expanding group of farmers who are looking to utilize technology to combat a confluence of pressures, including stricter environmental regulations, declining consumption, and rising costs.
Although experiments and projects similar to the one on his farm were frequent, Brett Fifield, CEO of Hort Innovation, stated that the results did not necessarily trickle down to other producers.
“One of the challenges and I guess frustrations, to be honest, is it takes quite an amount of time in some areas of science to get a result,” he stated.
“We’re now jumping the queue, if you like, and looking at what is commercially available or about to be available and how can we speed that up.”
Mr. Fifield stated that the new fund will search outside of horticulture for solutions that might be swiftly adopted, while also allocating Commonwealth and farmer funding to conventional R&D segments such as marketing, analytics, trade, and biosecurity.
“Not only in agriculture, but are there medical innovations that we could apply to Australian horticulture? Are there innovations in other parts of the world that we can fast-track?” he said.
A group of investors lends money to high-risk or early-stage businesses to help them bring their ideas to market, usually in exchange for a stake in the business. Venture capital is a prominent funding source for digital startups.
Big swing
Through an investment committee that consists of growers, the fund will be administered by Artesian, an investment business that has experience with a fund of this kind in the grains sector.
“We’re taking bigger swings through the venture fund, we’ll have a higher appetite for risk, and hopefully that will return a higher reward for industry,” Fifield continued.
A “significant milestone” was declared by Artesian CEO Jeremy Colless about the world-first fund.
“The approach the Hort Innovation Venture Fund is taking is proven and well suited to address the needs of Australia’s horticulture production industry,” he explained.
According to Mr. Fifield, the fund may potentially draw IT businesses from all over the world to bring their inventions to Australia, even though it might never be able to compete with the venture funding available in Silicon Valley.
“We’re already in conversations with some international providers of robotics when it comes to harvesting as worked on a similar fund in the grains industry, through an investment committee that includes growers.
“We’re taking bigger swings through the venture fund, we’ll have a higher appetite for risk, and hopefully that will return a higher reward for industry,” Fifield stated.
“The approach the Hort Innovation Venture Fund is taking is proven and well suited to address the needs of Australia’s horticulture production industry,” he explained.
Mr. Fifield said the fund might draw digital businesses from all around the world to bring their innovations to Australia, even though it might never be able to compete with the venture cash available in Silicon Valley.
“We’re already in conversations with some international providers of robotics when it comes to harvesting and field preparation,” he explained.
“Our message to them is if you can get it to work in the Australian environment, you’ll be able to get it to work anywhere in the world.”
Early in 2025, the fund will evaluate its first possible investments.
“I’d be disappointed if growers didn’t see initiatives flowing out of the Hort Innovation Venture fund within the next 12 to 18 months,” said Fifield.