Emertec Gestion is an 18-year-old cleantech venture capital firm that has turned its attention to agrifood technology in the last decade. The firm’s portfolio contains startups across the sectors of agrifood tech from Farm Robotics, Mechanization and Equipment in Naio Technologies, Bioenergy and Biomaterials in Olygose and Fermentalg, Novel Farming Systems in Ynsect, and Farm Management, Software, Sensing and IoT in SenCrop.
In 2016 Emertec Gestion merged with Demeter Partners, an independent private equity firm dedicated to the environmental and energy transition sectors. According to the firm, by the end of this year, it will have more than €1 billion ($1.2 billion) in assets under management.
We caught up with Eric Marty, investment manager at Emertec Gestion since 2004, to find out why his firm is betting on farm robotics ahead of the International Forum on Agricultural Robots in Toulouse, France November 29 and 30 where he is a speaker.
When and why did Emertec begin to look at robotics for agriculture?
Two years ago we decided to investigate robotics for agriculture and we have considered several investments in that area, mainly in Europe. We decided to invest in Naio Technologies because we found that the two founders have both skills in robotics and software, and they are also very close to the farmers’ day-to-day business. We liked these two different skills that were represented on that team.
What qualities are you looking for when evaluating a robotics company for investment?
There are two different positions in robotics. You can be a deep-tech company mostly developing artificial intelligence products — more software-oriented and A- oriented. The other one is more like Naio, which are integrators. They are very good at developing robots and integrating imaging systems and all the mechanics that move the robots within the farm.
When you consider a robotics company, you have to ask yourself where is the value? And if tomorrow some company wants to buy Naio, what would they buy? Are they going to buy the mechanics? Or are they going to buy the intelligence that is inside the robot? This remains a question and according to which kind of people you are talking with, you may have different answers. We are still working on this issue because according to what you think is the value, you have to put more money in that area. If you consider that the whole robot is important, we have to invest in the mechanical support and the AI part and commercialization of the robot. But if we consider that only the camera-guided tools are important, we will have to focus on that.
The only example we have so far of an agricultural robotics exit is Blue River’s sale to John Deere and that happened relatively quickly. Do you think most startups will take longer?
I think there is a tipping point now in the robotics industry because several big players are looking at that business now. Big engineering and equipment companies from Asia are considering that sector and we may see other exits like we’ve seen with Blue River — some quick exits.
From a purely theoretical point of view, it takes time and money to grow that kind of company. But it is also a question of business model because either you want to be a robot-maker, which will take time and money, or you can also decide to establish a partnership with a big player in the business and share some development and commercialization capabilities, and this will clearly speed up the development of your company.
I think this will be the next revolution in the agtech business. We have seen a lot of M&A in software, lots of M&A in the field of weather-monitoring, and in the next two years, we will see a lot M&A in robotics.
Photo: Naio Technologies