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AGERpoint: Going Global with Precision Ag Product for Permanent Crops as Entrepreneurs Play Catch Up

July 11, 2016

Permanent crops — the collective name for the fruits and nuts that are grown on trees or vines — are grown on 380 million acres globally and are worth several billions of dollars annually. But this segment of the agriculture sector has been largely underserved by big agribusiness. The majority of on-farm agriculture technology startups coming onto the scene in recent years have also focused on supporting commodity crop producers — corn and soybean production mainly — as they farm a much larger portion of the Earth’s surface.

AGERpoint, a Florida startup that recently held a first close of its Series B round on $5.5 million, has been there from the beginning. Starting out in 2011, it was the only software platform dedicated to helping permanent crops farmers manage their operations, according to Tom McPeek, CEO of the company.

AGERpoint provides tree and vine crop farmers with granular information about the state of their trees using a variety of sensing tools that collect data from satellites, managed aircraft, drones, and ground-based vehicles. These data are a combination of photographic images, infrared spectra, and 3D laser scans and, combined with AGERpoint’s algorithms, provide crop specific measurements for each plant on a farm. These measurements include physical plant properties such as the diameter of a tree trunk, the density of a canopy, and the height of a tree as well as detailed measurements of fruit, namely, the number of grapes per cluster on every vine.

Using this information, AGERpoint can assess plant health and alert clients to any stressors affecting their crops — such as drought or disease. “We can pick up anything that manifests a change in the tree and compare it against a library of knowns to tell you the issue with the plant,” says McPeek. “We can compare attributes at any level and scale from a single tree to a row or block, to an entire global operation.”

Farmers are not AGERpoint’s only clients; it started targeting farmers initially but now offers bespoke solutions depending on the client and its needs. An individual grower might ask for information about how much labor goes into each plant, whereas a marketing organization or insurance company might want yield predictions as early in the growing season as possible to help manage their distributors’ expectations or a farmer’s insurance needs, examples McPeek.

While there are increasing numbers of startups realizing the potential presented by this segment of the agriculture market — those offering precision agriculture technologies include sensor makers Arable, Phytech, Semios, and Saturas, drone companies PrecisionHawk and SkySquirrel, and satellite imagery startup Vinsight — it’s still a relatively quiet part of the burgeoning agtech market, according to McPeek and his investors.

“We believe there is an unmet need in the market for such tools placed in the hands of permanent crop growers,” says Greg Young, managing partner of Spruce Capital Partners, the investment firm leading the Series B round.

Dan Levine, managing member Tenfore Holdings, a New York family office and existing investor in AGERpoint agrees: “Permanent crops have been underserved by precision agriculture technology at a commercial scale.”

But agtech entrepreneurs are missing a trick; there are some clear benefits to targeting the permanent crop scene.

Permanent crop farmland can produce much more per acre compared to commodity crops (e.g. $3k per acre for citrus compared to $200 per acre for soybean), giving farmers more capital to spend on agtech products and better margins for agtech startups.

Commodity crop farmers are under pressure to receive actionable information about their farms in real-time if they are to avoid damage to their crops — something many agtech startups serving them are struggling to provide. Permanent crops, by comparison, are a much longer term play. The average product lifetime of a tree crop is from 12 years to thousands of the years.

“The oldest crop we’ve come across is a 2,500-year-old olive tree,” McPeek tells AgFunderNews.

“We are using the same tools as commodity crop-focused technologies, but the degree of urgency is nowhere near the same as corn, for instance. The reaction of tree crops of drought and disease is much slower. Remote sensing is helpful to point us in the right direction, but we have the time to deploy ground vehicles to determine more specific problems. Commodity crop farmers don’t always have that luxury.”

AGERpoint has done a great job of maintaining a leading position in the precision agriculture space for permanent crops and is now used across 12 states in the US and six countries globally. With this latest round of funding — which takes the total amount raised by AGERpoint to $8.6 million — it aims to expand the business further globally and through hiring more staff. It is currently moving offices to house its 40-strong team; a big increase from the three staff members it had when it raised the first round of its Series A on AgFunder in 2014.

“Part of the reason we’ve been able to scale so rapidly is that we’re good at using off-the-shelf technology, which makes us extremely interoperable,” says McPeek. “We haven’t gone into the business of building hardware we think farmers need. We’ve only developed products that growers or affiliated organizations have said they need. We don’t develop tools and go looking for customers, which we’ve seen some sensor companies doing.”

AGERpoint’s global growth and expansion can be attributed to its client base, some of which are multinational businesses with operations overseas. And it’s now getting ready to push into the Far East, Australia, and South America.

“We found that a lot of customers in California also have operations in places like Brazil, Chile, Australia, and even Turkey, and that pulls us into those countries,” says McPeek.

For Spruce Capital, which invested in the startup through its Malaysian Life Sciences Fund, it’s AGERpoint’s unique capabilities that have led to its growth.

“Our MLS Fund was attracted to AGERpoint based on what we view as its unique ability to 3D map fields, while utilizing data fusion to layer on outputs from near-field remote sensing technologies, to inventory, track, and phenotype permanent crops,” says Spruce Capital Partners’ Young.

Tenfore Holdings is increasing its stake in AGERpoint after first investing in the startup’s Series A 18 months ago. The Yield Lab was also an investor in the Series A after it exercised the warrants it received when AGERpoint took part in the accelerator’s first cohort in 2014.

AGERpoint is yet to close the Series B round and is looking for another $2 million to close it out on $7.5 million.

Have news or tips? Email [email protected]

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