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CEO Sebastian Schauff (left) and CTO Eric Schuessler.

EXCLUSIVE: AgriTech Capital invests in, the German ‘Amazon of AgTech’

October 23, 2019

Local book stores have largely been blown out of the water by the rise of Amazon and online e-commerce; the agribusiness marketplace has not — despite years of wild-eyed prophesies warning of imminent digital disruption. Even as 2019 draws to a close, the buying and selling of farming products and inputs still often means complex, close personal ties between farmers, agronomists, and suppliers that can date back decades.

That said, agtech e-commerce plays have been stumbling into their stride over the last few years, as the battle heats up to be the ‘Amazon of agtech.’ Till now, no such global hegemony has emerged, least of all Amazon itself, as my colleague Louisa Burwood-Taylor reported last year.

Platforms giving this a go have been busy trying to gain acceptance within an existing regional or national status quo. In France, for example, there’s Agriconomie, which works with incumbents to offer an agribusiness marketplace for farmers and their suppliers with advanced logistics capabilities and a streamlined value chain that removes some of the mark-up for growers. In the US, you’ll see a similar offering from Farmers Business Network, a farm data startup that has pivoted to selling inputs to farmers with uniform, transparent pricing. From San Francisco, you’ll find the likes of HarvestPort, which did a pivot of its own from machinery lending to inputs sales last year, and similar companies like AgVend. In Argentina, Agrofy is largely focused on coming to grips with Latin America. China has its own agribusiness marketplace in Maihuolang, which turned heads with a massive $150 million Series A round in 2017. Even in the tiny but tech-savvy Baltic nation of Estonia, there’s a comparable marketplace offering in the form of e-agronom.

Series A funding for Germany’s AgSupply

For a veritable Celtic Tiger of the agrifoodtech space —AgriTech Capital’s President Aidan Connolly —  one highly competent contender for the German market, and potentially internationally, is

Speaking to AFN by phone from the World Innovation Network in the Netherlands, Connolly told us that AgriTech Capital has just closed a multi-million dollar investment into Ag.Supply. He declined to disclose the exact amount on record.

His North Carolina-based AgriTech Capital came across thanks to a French connection (an introduction from a French bank) and the choice to invest is not normal for a VC that usually piles in pre-revenue. “The efficiencies that are inherent in a digital platform are clear,” explained Connolly. “This in effect is a playbook that’s already been created by Amazon.” It might not be revolutionary to have e-commerce in 2019, he added, but that “doesn’t mean it doesn’t need to happen.”

Besides, Connolly warned: “Too many agtech plays involve an aligning of stars,” referring to a tendency toward grand promises of “rocket moonshots” in the sector. This play is already commercial, he said, and already has sound and sensible business fundamentals with “a track record of success.”

The company is based in Munster and was founded in 2018 by CTO Eric Schuessler and CEO Sebastian Schauff — a former business developer at Kramp, Europe’s largest specialist in spare parts and accessories for the agricultural industry. Schuessler operates and develops the IT platform from Munich; from Munster, Schauff focuses on navigating the idiosyncrasies of the German agricultural market.

What the fax!

“Germany is maybe not the easiest market to start with,” Schauff told AFN by phone. “It’s very conservative and the margins can be tight.” One thing that initially surprised him here was the occasional request for invoices to be sent by fax, or consumer feedback asking for catalogues. A complete printed catalogue, Schauff noted, would need to include over 3,000,000 products. He said his company would offer a realistic compromise — a printed selection of their ‘greatest hits’ or ‘featured products.’

These greatest hits would include selected products for crop inputs, original and aftermarket parts, and animal husbandry, and crop protection chemicals. It has 30 high profile brands in the portfolio and is the only e-commerce site certified by the German farmers organisation, the DLG. This all makes the largest German sg e-commerce platform. Beyond providing printed material, the company maintains trust though active sales advice on all channels, as well as competitive pricing and strong logistics on the back-end. The company will use the proceeds of its funding round to grow its German revenues, the company says, as well as further developing their product range with a focus on animal husbandry and aftermarket parts. It will be presenting this approach in more detail at Germany’s gigantic Agritechnica trade fair in Hanover this November.

“Our idea behind this,” Schauff added, referring to strategy, “was that if we can make it in the German market, we can make it elsewhere in Europe.” His company’s idea has been in circulation for the last decade or so, he said, but back then “the market was not ready” and neither was the logistics or the technology. And he still believes that despite the regular comparisons with Amazon, there are still vital differences that will keep Amazon itself from muscling in and throttling his company like a local bookstore. “Try to think about crop protection chemicals. Would Amazon handle a business where you need 15-20 permissions? That is a business Amazon usually avoids having to get involved with.” The same is true, he said, of other technical supply parts.

‘Burning with passion’

It is this sort of fighting talk that Connolly and his team of investors already find compelling; Connolly said he was personally deeply impressed by the pair, describing them as “clearly two individuals who are burning with passion, and who will make things happen.”

What are your views on e-commerce platforms in agriculture? Drop me a note at [email protected]

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