Friday, July 1, 2022

Tech head sees more funding options

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A maturing agritech market in New Zealand is resulting in greater funding opportunities and broader interest, with distance to funders far less a determinant than it once was.

Craig Piggott, chief executive of disruptive startup company Halter, said he has found the capital market for agritech more liquid and receptive than when he first sought funding for his remotely managed dairy cow collar tech back in 2017.

“How much that has to do with greater interest in agritech and how much to do with the ebb and flow of capital I am not sure,” Piggott said.

“But more broadly, across every industry there is a lot of capital to be allocated, but I think you can’t count on that, and have to be aware of its cyclic nature.”

Today there is a vast array of institutional funds, interest from the Australian Stock Exchange, and many more venture capital funds based in the United States.

Piggott’s first funding bid was to Silicon Valley investors, pitching his collar prototypes by activating the collars on his parents’ dairy herd thousands of kilometres away via laptop, in the boardroom of a Silicon Valley venture capital company.

“US venture capital companies are spending more time here now. The pandemic has removed barriers to some extent. When I was first in the US raising funds, you would frequently hear ‘we do not invest in anyone outside of the valley,” he said.

“Now you will have venture capital companies almost saying the opposite.”

Last year Halter raised an additional $32 million in a series B funding round led by Australian venture capital firm Blackbird Ventures.

But the top challenges for any agritech startup in NZ remain capital and talent.

“For capital, you do still need to be in the top 10% of companies seeking it, and that’s okay,” he said.

The difficulty in sourcing talent tends to lie in the mid-upper tiers of management, for example, having a head of software engineering who has grown a team from one to 500 in x years, is tough talent to find locally.

“So, you just have to try and adapt them from another sector to the startup.”

In the meantime, he sees a lot of highly talented, committed graduates becoming available for entry level work with startups.

Covid has limited the ability of people to enter NZ, while there has also been a trickle of NZ talent deciding to depart these shores regardless of covid to take their chances in overseas workplaces.

In the meantime, rural connectivity is an ongoing physical challenge to installing tech like Halter on farms.

Tech like Halter relies heavily on connectivity, with the company installing its own proprietary links between collars and servers.

“But we are fortunate to have developed a significant, transformative technology, and doing this stacks up for us in what is a big overhead for any solution. But for other tech, it may be a great product for a relatively small problem, and it would be harder to justify,” he said.

He can see the potential for such tech to piggyback off Halter’s connectivity in the future.

With its subscription-based commitment from farmers, Piggott says the company has greater motivation to continually improve the tech, usually via remote updates, in order to give farmer clients the incentive to keep it.

“It does take a little getting used to. Most farmers are pretty comfortable with capital expenditure, but when the product is dynamic like this it makes sense for them and is an incentive for us to build better products,” he said.

In the meantime, the gigabytes of data harvested by Halter collars may yet provide a real time means of authenticating NZ dairy farmers’ welfare and environmental claims.

“Our data can prove cows are not in waterways, and what their health is like. If you can pass that on to consumers, it puts transparency on a very high level.

“It doesn’t justify collecting data on its own, but if you are already collecting it, it could be a better means of authentication than an audit.”

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