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The Most Successful Agtech Startup You’ve Never Heard Of

October 19, 2016

Agworld, a farm management software company out of Western Australia, has been on the agtech scene since 2012 and has raised over $11 million. The company has also expanded internationally to reach 65 million acres under management for paid users across Australia, New Zealand, the US, South Africa, and South America –for reference, Monsanto’s Climate Corp has 92 million acres in the US, but only 13 million are paid for.

But even if you’ve been paying attention to agtech, it’s possible you might not have heard of Agworld. Why have they decided to stay off the radar, and what can others learn from their journey?

Who are they?

Agworld, founded by Doug Fitch and Matthew Powell in 2009, started off with a “digital pen” tool to help agronomists take notes in the field that could then be sent via email, avoiding the hassle of pen and paper. The team quickly expanded their digital capabilities to workflow management and record keeping. Now, the product provides a suite of tools to help agronomists and farmers work collaboratively to maximize productivity and return on investment, including sampling, planning and budgeting, scheduling, and record keeping.

Early to the agtech scene, the company made a conscious effort to focus on product development rather than publicity, developing a “do things first” culture. According to Agworld president Zachary Sheely, Agworld’s “under-promise and over-deliver” approach helped them to develop and validate a strong product and business model. Now that they have reached significant scale, Agworld is looking to make sure people know who they are.

Agronomist-Centric Approach

Early on, the team recognized the agronomist’s role as a key advisor and decided to make the collaboration between farmers and agronomists their beachhead market. Rather than attempt to disintermediate or disrupt the current model, Agworld focused on working within the system. By comparison, many other startups have targeted farmers directly, in many cases seeking to replace the agronomist; a strategy that’s proving increasingly challenging.

Agworld helps agronomists with a significant pain point in their business: differentiating themselves to growers and making this relationship “sticky”. Agronomists, in turn, help Agworld to reach growers. Sheely explained, “the farmer always wants to collaborate with an expert, and because we brought the experts in, they brought in the farmers.”

To execute this go-to-market strategy, Agworld created a value proposition for both growers and agronomists by allowing both parties to work together toward a common goal of maximizing financial returns. For example, both parties can track job completion, compare management decisions against recommendations, and work from the same plan throughout the season. Agworld’s technology allows both growers and agronomists to stay focused on what they do best.

This B2B model has proven to be a successful strategy, and many other agtech companies are now following suit. It makes sense: imagine a grower saying, “my agronomist says I need Agworld or he won’t work with me.”

Agworld Rules of Engagement

Agworld was quick to recognize the need for rules of engagement (ROEs), or operational policies, to guide their interactions with customers and investors.

Agworld has developed rules of engagement (ROEs) to guide their interactions with customers and investors such as with data management. It sees data management as distinct from data security. The latter, Sheely says, is required to play nowadays. “Encryption technologies and backups are fundamentally necessary now,” he says, “but with data access, things get more complicated.”

Agworld’s ROEs govern who has access to what, enabling growers and advisors to collaborate without losing efficiency. For instance, “you cannot share the intellectual property of one grower or advisor with another. It’s their hard-earned competitive advantage. If everyone got full access, others would lose the incentive to continue to improve, and this would hurt everyone over time,” Sheely explained.

The team has also developed some ROEs to govern their approach to investors and advisors too. Agworld has raised $11.5 million from Yuuwa Capital, Syngenta Ventures, and REV, and believes that all investors can be strategic advisors who provide different perspectives on the business and the industry. “We have expertise in growing, agronomy, retail, and national agribusiness across our team and our advisors.

Yuuwa Capital, which led Agworld’s $1.5 million Series A, for example, was instrumental in helping the company to grow and prepare for international expansion. In fact, Matthew Macfarlane, a co-founder and the investment director of Yuuwa, actually jumped on the Agworld team to act as a pro bono CFO. Syngenta Ventures has also been able to add strategic value to Agworld through its deep agriculture expertise and connections.

Approach to International Expansion

Agworld used Australia as a test bed to prove out its product and business model before expanding to other geographies. This approach has been successful for Agworld — a good sign for other Aussie agtech startups looking to grow — though scaling internationally is not without its challenges.

Sheely emphasized the importance of being ready to scale across various aspects of the business in the US: “we both speak English and the industries are similar, but they’re not the same. You really need a lot of resources and work up front to hire your first people and get momentum in the US.” For Agworld, this required a healthy perspective and patience. They first had to prove out a technology and build a business model that was proven to work. As Sheely explains, “we wanted to make sure we were really ready to scale, and that included having the resources to do so.”

Securing an international investor like Syngenta Ventures surely helped, although Australia has proven to be a tough place to raise funding considering most venture investors are thinking about market size and scalability. Syngenta Ventures did not come on until Agworld had been around for a few years and had raised its Series A with Yuuwa. According to Syngenta Ventures’ Katrin Burt, having a credible, experienced local investor made Agworld, “more compelling for international capital from a deal management standpoint as it gave us trusted partners on the ground.”

Using Australia as a proving ground has worked out for Agworld, however. “Agworld is a company we’re very excited about,” added Burt. “They have traction. They have revenue. They have a deep understanding of their customers and what they’re willing to pay for. And they have a great roadmap and are ready to expand. They’re in an attractive space for us, and we feel really good about their team and their expansion.” Both Yuuwa Capital and Syngenta Ventures have invested in subsequent funding rounds for Agworld.

What’s Next?

As they continue to expand internationally, and as the farm management software space becomes increasingly crowded overall, Agworld will need to adapt. Interoperability, though APIs and sensor integrations, for example, are on the horizon, along with mobile offerings and updates to the user experience.

Agworld’s goal is to continue to expand on their base as a “collaborative farming solution.” They are planning to integrate with other ag and non-ag partners, such as other ERP solutions, accounting software, and even labs, as well as with on-farm data collectors and other sensor providers. To achieve this, the Agworld team focuses on understanding their users and the existing system. As Sheely explained, “we spend a lot of time thinking about the workflows of our users to understand how and when information is used, how collaboration will work with the new information we provide, and how can we make each party more efficient and better at their job.”

As an early player on the scene, Agworld has seen the agtech landscape change dramatically. Originally, tech and ag were like oil and water. But now that technology is more mainstream, trust is increasing, and more competitors are entering the agtech space.

Agworld says that its biggest competitor continues to be tradition.

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