VOL. 132 | NO. 100 | Friday, May 19, 2017
Innova Turns Focus Toward Agriculture Technology
By Andy Meek
By 2050, National Geographic Magazine recently warned readers, the world will somehow have to be able to feed 2 billion more people than it does now.
Innovations in agriculture and farming technology are one way of addressing that looming challenge. Which helps explain why now felt like the right time for Memphis-based venture capital firm Innova Memphis to continue expanding the focus of its investment funds into new industry sectors like ag tech.
Innova, which was founded in 2007 by the Memphis Bioworks Foundation, announced the close this week of a $31 million agriculture innovation fund – Innova’s fourth fund – that’s now ready to start investing in new technologies and innovations.
Innova partner Jan Bouten said the firm – whose first two funds had an emphasis on health care, while the third fund began to branch out into other areas like logistics – will make its first investments out of the new fund in the next two months. A partner in that effort will be the venture development organization AgLaunch, which also encompasses an accelerator and farmer network.
When it comes to startups and investments especially in tech-based companies, so much comes down to timing. And now, Bouten said, is the right time for the firm to seek out companies and technologies to help them grow and create opportunities and jobs in the rural U.S.
“I’m sure you’ve heard we need to close to double the food supply in the next 30 years to really feed all the people on the planet,” Bouten said. “So we think this is a great field of opportunity to take advantage of. And with Memphis being where it is, it’s really in the middle of so much fertile farmland. We have a lot of independent farmers in this region, so they are actually willing to try new things. We’re really looking at technology-based solutions that solve problems that directly affect farmers and the supply chain – between the farm and before stuff gets on the shelf or you consume it.”
The field is also ripe with opportunity, Bouten continued, because of possible applications of mostly existing technology thanks to advances in things like processing and sensor technology and battery life. He points to smartphone demand as having been a driving force behind those advances, which have enabled an abundance of new applications “at much lower cost in remote areas.”
“So that’s really why we think this is the right time to bring technology to a sector that really has big problems to solve for humanity,” he said.
The new fund will target investment in areas like farm technology, equipment and enabling innovation, like robotics; technology focused on crop production, harvest and storage; innovations that address food security and safety; animal health and welfare systems; and more. Investors in the fund include Farm Credit Mid-America, AgriBank, Farm Credit of Western Arkansas, Farm Credit Services of America, Farm Credit Bank of Texas, FCS Financial, CoBank and AgStar Financial Services.
AgLaunch director Pete Nelson said his organization has built a “unique and strong support network,” working directly with farmers to support the commercialization of agriculture technology. And Innova’s investment expertise and capital will help give new momentum to the AgLaunch effort.
Innova plans to work with national farm organizations and other partners to identify investment candidates. The fund also is representative of something larger: an expansion of the infrastructure available locally to support startups, with those focused on agriculture technology finding everything from new capital to AgLaunch available to support their efforts.