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How SparkLabs Cultiv8 is shaping sustainable agtech in Australia

Published:
8/11/23

This article was originally published on SmartCompany.

In the fertile grounds of regional Australia, a budding movement is trying to redefine the landscape of agriculture through technological innovation and sustainable practices. SparkLabs Cultiv8 is at the helm of this transformation, demonstrating how strategic investment in agtech is not just cultivating crops, but also change.

Home in the heartland of regional NSW

SparkLabs Cultivt8 is nestled within Orange Agricultural Institute (OAI) in regional NSW. Established in the 1960s, the OAI began life as a potato research station. Now it’s a working farm that spans 183 hectares and is home to over 5,000 fruit and nut trees, 1000 sheep and professional entities such as the NSW Department of Primary Industries (DPI) and Water NSW.

Cultiv8 is located in old veterinary laboratories, which were refurbished in 2018 to become the Global Ag-Tech Ecosystem. Colloquially known as The Gate, its focus is supporting and fast-tracking innovation and commercialisation within the agtech ecosystem, with support from the DPI.

It is the Australian arm of the SparkLabs global network of startup accelerators and venture capital funds. Co-founded by Malcolm Nutt and Jonathon Quigley, SparkLabs Cultiv8 has a particular focus on cleantech and agrifood tech businesses.

Over the past six years of running its accelerator program, it has supported roughly 50 agtech companies that have gone on to raise an additional $650-$700 million, with a collective market cap of $1.7 billion. This has also resulted in over 700 jobs in the industry.

Since then it has also branched out further, launching a VC arm that specialises in seed to Series B investments — Cultiv8 Funds Management. Like its accelerator sibling, the fund is focused on sustainability startups, particularly in the agriculture and food spaces.

SparkLabs Cultiv8 believes in the future and profitability of agtech

Cultiv8 firmly believes we’re at a critical juncture in regards to the future of food security and environmental protection. Agtech desperately needs more investment, and as an agricultural nation, Australia is well-poised to do it. But it’s not happening at the same rate as SaaS startups.

“Agriculture broadly, agtech generally, and agrifood tech specifically are difficult investment categories,”
- Mitch Kosev, investment director at Cultiv8, said to SmartCompany.
“The complexity of the sector means you need specialist managers with deep knowledge of the category and an extensive network of experts to call on to help navigate the nuances of each company you’re looking at.”​

Kosev articulates a vision that goes beyond traditional venture capital to see cash injection and expertise flowing from regional areas.​

“You’re not going to see your typical VC investing in agriculture because it’s hard. But we take a very different view of it.

“We are looking for solutions to the major transition challenges facing the agriculture sector.”

According to Kosev, there is a suite of agtech-focused issues that need VC funding now — the reduction of methane in meat production, antibiotic replacements, hardware automation, supply chain improvements, and the displacement of plastics and virgin materials in packaging, just to name a few.

“The enormity of this challenge cannot be overstated but the answers are out there and it can be done.”

Kosev is also adamant that investing in the future of agriculture and sustainability isn’t just the right thing to do, but is also a profitable endeavour.

“For a solution to be sustainable, it must be profitable. Profitability means our investments are having an impact and that’s a win-win for the companies, for us, for our investors, for those using the products, and for the environment,”
- Kosev said.

Malcolm Nutt, a co-founder of SparkLabs Cultiv8, echoes this sentiment by highlighting recent investments like FutureFeed, which leverages the naturally occurring asparagopsis seaweed to reduce methane emissions in cattle. Nutt stresses that Cultiv8 embraces the challenges posed by agtech and is fueled by expertise and a global network.

“As domain experts, we get approached from many global VC firms looking to leverage our resources and co-invest in these opportunities,”
- Nutt said.

Being regionally based is important

But what makes Cultiv8’s approach particularly resonant is its grounding in regional realities.

Jonathon Quigley, a co-founding partner at Cultiv8, emphasises the importance of regional connection — not just for the startups but also for the community and the broader agricultural sector.

“Our food is produced in regional areas so it makes complete sense to be close to the end consumers of the innovations we’re helping bring to market,”
- Quigley said.
“And it’s great for regional cities and towns to have new, thriving companies bringing employment opportunities and investment to local communities. It also keeps us as individuals grounded and connected to agriculture in a real way.”

According to Quigley, Cultiv8’s strategic location in Orange, coupled with a satellite office in Sydney, offers the best of both worlds — access to the heartland of Australian agriculture and the financial powerhouses of the city. This balance enables Cultiv8 to support practical innovations that meet the farmers’ needs, while also tapping into research and global partnerships that propel these innovations forward.

Fortunately, we have seen an uptick in agtech and sustainable solution investment over the last 12 months. Loam Bio and Cauldron — both also based in Orange — saw significant raises this year. Capital has also flowed into the likes of ULUU, Nourish Ingredients and Stacked Farm.

The potential of agtech, especially when rooted in the rich soils of regional Australia, is vast and ready to be tapped. It’s where sustainable necessity meets opportunity. The message to investors is that the right combination of expertise, cash flow, and local insight can sow the seeds of innovations that can grow into the sustainable solutions of tomorrow.

The author travelled to Orange as a guest of SparkLabs Cultiv8.

November 8, 2023

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Published:
8/11/23

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