Tuesday, March 5, 2024

Agritech options open for innovators

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The presence of established, mature agritech companies and a greater abundance of venture capital funds have enabled New Zealand to step up as a more attractive country for agritech investment in recent years.
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Maria Jose Alvarez, investment manager for venture capital fund WNT Ventures, is one of several speakers addressing this year’s 2035 Oceania Summit, focusing on food and agritech to be held in Auckland in October.

She believes NZ is experiencing a coming of age in the sector, as fund managers seek opportunities in climate change-related technology to help better manage scarce resources like soil and water.

“And we are also seeing dedicated funds doing that, rather than generalised funds,” Alvarez said.

In the meantime, large mature tech firms like LIC and Gallagher are looking harder at assimilating small startup companies’ technology under their wing.

“It means there is a pathway for companies to stay here, versus migrating to Silicon Valley. There used to be an expectation you had to ‘grow and go’,” she said.

She points to crop management company CropX, which had its origins in NZ, relocated to the United States, got Israeli funding, moved to Israel as a global player and is now back here in NZ with a business hub.

“And that whole cycle, it only took around six years. It is good to see companies like that coming back,” she said.

The cycle from commercialisation to innovation is also moving far quicker today than even 10 years ago, prompting established companies to cast around for startup tech, rather than grind it out under their own roof.

“It is harder for a mature company to innovate and continue with day-to-day business. We have seen companies try to do both and it is challenging,” she said.

“With early-stage startups the main thing is to get on the ground early, it’s difficult with large corporates, but we are seeing more willingness to cooperate.”

The cycle that once would have been 10-15 years from innovation to development is now down to three to five. However, R&D cycles for deep, disruptive technology can still take 8-10 years, she said.

The wine industry is one she said has done a particularly good job in recognising the value in cooperating with small startups offering innovative solutions.

Her own past research work and startup company VIDaOX worked on reusing wine waste by extracting antioxidants to be used in food preservation and cosmetics.

“Here in NZ, we are seeing companies, including Marama Lab, Winely and Cropsy Technologies, all being able to access industry data, with an industry realising it needs to provide this data for these companies to innovate, but also for them to benefit and have a greater impact in the market,” she said.

Almost two years ago the agritech sector was the first to launch an industry transformation plan to lay a pathway for future development.

Alvarez maintains it was always a tough ask to put together a plan where there was no previous framework, in an industry where there are many different moving parts, spanning farmers, growers, innovators, processors and marketers, to name a few.

“The ITP has made an awareness of how disjointed all those parts are, but also highlighted how willing they are to come together to put NZ’s agritech on the forefront of a global conversation. It has also proved that adoption levels of new tech are not always great, so it’s definitely a good starting point,” she said.

Alvarez is adamant that while Israel is undoubtedly a leader in agritech, NZ doesn’t need to try and emulate all that country has done to achieve that claim.

“They made a plan and put a lot into it. But we don’t need to follow them exactly, we have more strengths in agriculture, so we should not rely on simply trying to copy their plan,” she said.

She points to NZ having an excellent level of research and innovation, and now starting to work on building conversations between researchers, farmers and growers sooner in the innovation cycle.

“The entrepreneurial mindset has increased significantly in the last few years. We are seeing companies like BioLumic succeed from the research environment by getting the cross pollination with farmers and developers much earlier,” she said.

She is also an advocate of the “quick fail” school of success, where the sooner an innovator can fail and then pick themselves up again, the sooner they will achieve elusive success.

“Founders are often more successful after their third or fourth company. It builds a level of fortitude in a country that is already quite resilient and very innovative,” she said.

More: The 2035 Oceania AgriTech Summit is to be held in Auckland from October 10-11. Visit www.2035.ag/ for more information.

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