Momentum is Building for Aussie AgTech

May 30, 2017

Food Leaders Australia brought together a diverse group of 200 AgTech innovators, investors, and curious onlookers for the second annual 400M event in Toowoomba. Here are a few of my takeaways:

Hot Subsectors: Some Old and Some New

Precision Agriculture, drones, and farm management software remain a focus as companies find crop- and geography-specific use cases where data and analytics- or just digitization in general- can have an impact on the bottom line.

A few newer subsectors are also attracting investor interest, Andrew Kelly from Bio Pacific Partners explained, including alternative uses for plants and gene editing. CSIRO researchers have an example of the former: extracting oil from safflower plants to be used as an industrial lubricant. Other examples include replacing animal-based meat with plants (for example).

Consumer acceptance and regulatory oversight will be important for companies in both of these subsectors, as concerns over GMOs and skepticism about the price and quality of plant-based substitutes remain prevalent.

Entrepreneurship is a Trade that can (and must) be Learned

“Don’t confuse passion with an investment opportunity,” cautioned Matthew Pryor (who recently sold his company, Observant, to Jain Irrigation). Having a passion for what you’re doing is important, but just because you love your product or use your service to solve a problem does not mean that others feel the same. Having a sample size of one is not enough.

Aspiring entrepreneurs need to acquire the basic skills needed to build a business. One of those skills is pitching to investors.

The panel of judges, including Sam Trethewey, Andrew Kelly, MIke Briers, and Kate Burke, repeatedly asked the same few questions when the answers weren’t clear, as they should have been, from the slides. Entrepreneurs need to be prepared to answer these questions- every investor will be asking them.

  • Who is your customer, and what evidence do you have that they want your product/service?
  • How many of these customers exist (i.e., what is your Total Addressable Market (TAM)?
  • How will you get your product to your customers? What is your distribution strategy?
  • How are you different from your competition? What is your competitive advantage?

[Quick shout out to RapidAim and Platinum Compost for having these nailed.]

Ditch the VC Obsession

Venture Capital, while sexy and press worthy, is not the only form of capital; yet we often act like it is. Not every business will be global, and not every entrepreneur wants to have the responsibilities that come with a multi-million or billion dollar company. And that’s totally fine!

Just as important, raising money from a VC takes a ton of time and comes with expectations, pressures, and additional responsibilities. If you do have to raise money, consider other options such as friends and family, debt/loans, government grants (e.g., Accelerating Commercialisation), and corporates. And don’t forget your customers: if you can turn a profit, you may not need to raise money at all.

Overall my biggest takeaway from the day is not a new one, but one that came through loud and clear: it’s still early days with a long way to go, but momentum is building for AgTech in Australia.