Dutch Startup Building Sensors to Detect Mastisis in Dairy Cows Raises Series A from Impact Investors

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Animal health startup MastiLine has raised a Series A investment round from Dutch investment and development agency NOM, Dutch loan financiers Doefonds Fryslân, early-stage impact investment firm SHIFT Invest, and its own management. As part of the deal, the Netherlands-based company will move to Heerenveen close to the Dairy Campus, a dairy research and networking facility.

The size of the funding round was not disclosed but it was more than $1 million, according to one of the investors.

MastiLine develops and manufactures sensors and an automated monitoring system to detect the early signs of mastitis, an infection that can require dairy cows to be removed from production until the infection is resolved. The startup’s sensors enable dairy farmers to detect mastitis at a subclinical level before visible signs of the disease manifest. It does so by detecting somatic cell counts, which indicate whether mastitis is present.

The technology will allow dairy farmers to save costs as a result of mastitis prevention, reduce the use of antibiotics, increase overall herd yield, and get better pricing for good quality milk with a low somatic cell count, according to Mastiline.

“If you ask the dairy equipment manufacturers or milking parlor suppliers, they’re all very interested in adding this tool to their own systems,” Bram Ledeboer, partner at SHIFT Invest, tells AgFunderNews. “To date, they haven’t found anything like it.”

Dutch dairy farmers’ need to become more efficient hit center stage last year when the European Union abolished the milk quota scheme on April 1, 2015. A three-decades-old system, the program was designed to regulate milk prices by limiting the growth of milk production and the product’s price. Each dairy farm is assigned a cap on the amount of milk it could sell each year without having to pay a levy.

“With the milk quota gone, the dairy industry is very competitive. It’s critical to become efficient,” says Ledeboer. “If you know as soon as possible that a cow is becoming sick, you are able to treat the cow earlier and maybe prevent the illness. This improves overall herd health and supports productivity.”

The product is currently being finalized with a projected market date of 2017. The company will likely begin distributing locally in the Netherlands, with the ultimate goal of selling the product at the global level.

SHIFT Invest operates like a traditional venture capital firm, but with a hearty focus on ensuring the deals it makes have a beneficial impact as well.

“What we mean by impact is that we think it is really important that the deals we do have either an environmental or a health impact,” says Ledeboer. “If we are doing a deal in food, there should be a health benefit, but at the same time all the deals have to be commercial deals—we are not a non-profit fund.”

Impact analysis is a key component of the fund’s analysis for each deal, including MastiLine. The technology’s potential to help farmers increase total milk yields through promoting herd health and early disease detection is a major benefit, says Ledeboer.

“On top of that, you can use fewer antibiotics, which is also a health benefit for milk consumers and the environment,” he adds.

Much of the food and agtech sector presents inherent opportunities for social, financial, and health-based impact. Some investors may enter the space with the intent of focusing on a smart deal only to find that the technology has many other benefits besides providing a solid return on investment.

Will we start to see more investors tapping into the impact side of agtech investing?

“Absolutely,” says Ledeboer. “Consumers are increasingly aware of the agriculture industry’s footprint and about where their food comes from. This drives innovation, but corporations also see this shift in consumer trends. The impact of the ag industry on climate change is huge and this is increasingly known to the public than before.”

SHIFT Invest partners with a number of key players offering ties to the ag industry like Rabobank, which finances dairy companies and dairy farmers worldwide, and Wageningen University, a premier ag research institution in Western Europe.

It also partners with Menzis, a healthcare insurer, whoich has a keen interest for nutraceuticals and the connection between diet and health, and the World Wildlife Foundation, who supports investments that can preserve biodiversity and catalyze sustainability.

Launched in September 2014, SHIFT Invest raised $30 million and has made four investments in food and agriculture, adding to the four food and ag investments it made through a prior fund.

These portfolio companies include biodegradable crop input product GreenA, which is selling a biodegradable additive which radically improves the effectiveness of crop Meatless, and insect protein developer Protix Biosystems. The presence of two companies innovating in the alternative protein space is no coincidence. According to Ledeboer, there is definite growth and potential in this sector.

Have news or tips? Email Media@AgFunderNews.com

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