EXCLUSIVE: Tractor retrofitter Augmenta raises $8m in Series A round led by CNH Industrial

Augmenta — a Paris-headquartered startup which retrofits tractors with ‘smart’ tech capabilities — has raised $8 million in Series A funding, co-founder and CEO George Varvarelis told AFN.

Capital goods company and manufacturer of agricultural machinery CNH Industrial led the round. Amsterdam-based impact investor Pymwymic also participated in the round alongside Augmenta’s existing backers, France’s HCVC and Greece’s Marathon Venture Capital. The startup previously raised $2.5 million in an October 2019 seed round.

“CNH Industrial’s M&A team and I met at the Agritechnica trade show in Hannover, Germany, in November 2019. We instantly connected because we share a vision of agricultural technology without silos that prevent innovation,” Varvarelis said.

“We firmly believe that the only way to really impact the farming ecosystem and in turn the world is by offering products and services to all farmers, regardless of their size, color of their equipment, or region. CNH Industrial is a supporter of that thesis which, to be completely honest, was a really pleasant surprise given the fact that they are a machinery OEM in a pretty competitive environment.”

Beyond leading Augmenta’s Series A, CNH Industrial brings with it the experience and expertise the startup needs to commercialize its products at scale – as well as offering global manufacturing, logistics, and distribution capabilities, Varvarelis added.

Augmenta — which maintains an R&D center in Varvarelis’s native Greece, plus a North America office in Dallas — has developed an AI-powered ‘field analyzer’ system that can be mounted onto the cabin roof of a tractor, sprayer, or spreader. Using multispectral cameras, the device analyzes crop foliage and keeps an eye out for things like damage or flooding in the field. It then channels this information to send commands to the implements it is attached to, telling them to apply appropriate amounts of chemicals or fertilizers in a single tractor pass.

“Coming from a small agricultural village in the center of Greece, I’ve seen firsthand the massive misuse of crop inputs which derives from misinformation and lack of technology. That was actually one of the main reasons that made me start this company in 2018,” Varvarelis said.

“Environmental sustainability was always one of our core drivers, but unfortunately, it’s not enough. The tricky part behind protecting the environment is that you have to do it in a financially beneficial way for the farmers -otherwise, it simply does not work. We are obsessed with providing monetary value to our customers, but we do it in an environmentally sustainable way.”

Providing farmer RoI

Augmenta operates in 16 countries, covering nine broad-acre crops. According to Varvarelis, it has helped farmers to automate their in-season nitrogen, plant growth regulator, and harvest aid applications — leading to average savings of 9%, 15%, and 20%, respectively — in over 800 fields, with a consistent yield increase of 2% compared to traditional practices.

“Our biggest achievement, in my opinion, is that we are providing a consistent RoI of one to two years to even the small and medium-sized farmers that are using agtech for the first time with Augmenta,” he said.

“Don’t get me wrong – the most value-add of our product is still in the farms with the most acres given the fact that we are augmenting the per acre bottom line. But our success in the small and medium-sized farms has proven that we have a pretty big potential impact.”

The startup sells its hardware to farmers via selected distributors in all territories except the US, where it has its own sales team that interacts directly with end users.

Buying the hardware — at a retail price of around $12,000 — gives farmers unlimited access to Augmenta Basic, the startup’s monitoring platform that can create canopy health maps, prescription maps, and a few other types of analytics.

“One can think of Augmenta Basic as having a drone on top of their tractor at all times, without the weather dependency that aerial imagery entails, and without the need of hiring a pilot and a data processing company to get the actionable information,” Varvarelis suggested.

Premium services

On top of that, the startup offers premium services — such as automation of spraying for specific crop and input combinations — which are sold through a software-as-a-service model. These are similar to presets which allow the farmer to pick the service of their choice from Augmenta’s in-cabin interface, and start working at the press of a button.

These premium services cost in the range of $1 to $4 per ‘unique acre’ per year (“‘unique acres’ mean that the farmer pays the same price whether they do one or 10 passes in the same field,” Varvarelis explained.) Larger farms running into the thousands of acres can get a discount.

So a US farmer looking to apply nitrogen to their 1,000 acres of cotton crop would pay $12,000 for the Augmenta hardware, plus $2.50 per 1,000 unique acres, according to Varvarelis. That’s a total of $14,500 for the first year and $2,500 each year after that, regardless of how many nitrogen applications they make on the same 1,000 acres.

“With current result averages, the same farmer would net $20,000 the very first year through only our nitrogen service, which means a positive RoI within the first year,” he claimed.

“Most of our cotton farmers are using all three of our current services within the same season which makes them net even more money at the end of the year. [And by] buying the hardware, the farmer has access to our future services as well – like green-on-brown pesticide spraying, which will be available in 2022 through an over-the-air update.”

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Augmenta will use the Series A funds to bring this new pesticide-spraying service to market, while also accelerating R&D around other services it could potentially offer. Some of the capital will also go towards the addition of more crops to its portfolio — including ‘high value’ varieties — as well as further growth of the startup’s global distribution network.

“Most of the robotics and automation technologies out there are in the R&D stages and do not target large-scale crops due to the massive size of the respective operations. Compared to autonomous implement companies I would say that our main advantages are versatility and accessibility – both in regards to pricing, and machinery compatibility,” Varvarelis said.

“Our technological approach allows us to automate multiple different operations in both low and high-value crops. Self-driving implement companies are usually operationally specific — green-on-green, or green-on-brown — and the fact that a farmer needs to buy both the implement and the automation hardware will probably make it quite expensive. Augmenta can work with already-owned equipment of all shapes, sizes, and colors – and it’s quite affordable!”

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