SparkLabs ploughs $10m into Orange agriculture technology accelerator
By Michael Bailey
14 September 2017
This article was originally published on Australian Financial Review.
Australia is set to get a second accelerator for agriculture technology companies with $10 million behind it, when a program funded by Asian venture capital giant SparkLabs and the NSW Department of Primary Industries starts in Orange next March.
SparkLabs Cultiv8 will be the second effort toward creating an agtech hub in Australia, after SproutX launched last year in Melbourne's CBD with $10 million backing from Findex and the National Farmers Federation.
Up to eight agtech start-ups or scale-ups will receive up to an initial $100,000 from the SparkLabs Cultiv8 program, which will be based at the Orange Agricultural Institute in central NSW. The state's minister for primary industries, Niall Blair, opened the accelerator last Friday.
His department is redeveloping the site into an innovation hub called Global AgTech Ecosystem or GATE, with investment including the connection of 25 surrounding farms to a communications network specifically designed for the internet-of-things.
Called a LoRAWAN network, it is able to carry small packets of data from many connected devices, to "gateways" that then link it to the internet. No telcos need to be involved, and low power requirements mean sensors can typically transmit on the network for at least three years using a single AAA battery.
"Better collection and use of data is at the heart of most transformative agriculture inventions today, given it is the last major industry still to be digitised," said SparkLabs co-founder Frank Meehan.
Monsanto's $US1.1 billion purchase in 2013 of Climate Corporation, which uses machine learning to predict the weather and other relevant information for farmers, was a watershed that proved agtech's potential.
"Having our accelerator based in Orange, next to real farms connected to a LoRAWAN network, means our companies will be able to test and get feedback on their ideas instantly, whether they apply to cotton, horticulture or livestock," Mr Meehan said.
Agtech was the vertical in which Australia was most likely to develop a technology innovation hub that was relevant globally, said Mr Meehan, a mechanical engineering graduate from University Of Sydney who spent five years to 2013 working for the venture capital fund of Hong Kong billionaire Li Ka-shing, sitting on the boards of Siri (prior to its sale to Apple), robotics company Deepmind (prior to its sale to Google) and music streaming giant Spotify.
The fact that NSW Department of Primary Industries researchers will be embedded with the companies hosted at SparkLabs Cultiv8 was an important differentiator, Mr Meehan claimed.
"The US has seen plenty of agtech investment but it's been independent of government, because it's hard to get it together with the private sector in their system," he said.
"Here we've got a chance to involve government and potentially solve different sorts of problems in new ways."
Application open Friday for SparkLabs Cultiv8, whose host companies will also receive subsidised legal and accounting advice from Minter Ellison and KPMG respectively.
SparkLabs' pool of mentors for the 80 companies it has graduated from its accelerators throughout Asia to date include Netflix co-founder Marc Randolph and Blue Sky Private Equity founder Mark Sowerby. All mentors are free to contact any SparkLabs-hosted company they feel they can help, and Mr Meehan said more mentors out of the agriculture sector would be announced.
There are no set levels of initial investment or equity stakes in SparkLabs accelerators, as Mr Meehan said they all welcomed companies at differing levels of maturity from all over the world.