Last week, THRIVE was heralded as the Most Valuable AgriFood Tech Accelerator at AgFunder’s AgriFood Tech Innovation Awards in San Francisco. The awards were nominated by a group of leading agrifood tech investors and then put to the vote in front of AgFunder’s 60,000-strong member and subscriber network.
For readers who don’t know what an accelerator is, it’s a set-duration program for early-stage companies to get access to a business development curriculum and mentor network. Often backed a venture capital arm, accelerators usually invest in participating startups on a set or negotiated basis, and aim to bring in more investment by hosting venture capital investors at a “demo day” at the end of the program. There are, of course, various different approaches and strategies. Y Combinator, Techstars and 500 Startups are some of the leading accelerator groups globally.
THRIVE, the California-headquartered business that launched in 2011, is currently working with its fifth cohort and today is hosting the THRIVE Summit in Santa Clara. This year it will launch its first MidWest-focused program, after partnering with National Pork Board, AgriNovus Indiana, Elanco Animal Health, Purdue Foundry and with long-term partner Land O’Lakes.
The organization, which is backed by SVG Ventures, also publishes the annual THRIVE Top 50 Report, detailing the “50 Growth Stage Companies Disrupting the Future Of Food And Agriculture” ranked in partnership with some of its corporate innovation partners: Wells Fargo, Trimble, Driscoll’s, Sun World Innovations, and EY.
The group’s other corporate innovation partners are Corteva Agriscience, Driscoll’s, Wilbur Ellis, E&J Gallo Winery, Coca Cola, Trimble, Verizon, Taylor Farms, and Heidenhain.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
We caught up with founder and CEO John Hartnett, in the wake of the award, to find out more about how he built THRIVE to be the valuable startup resource it is today.
When did THRIVE start and what was the strategy at the beginning?
There were two waves really: the first was engaging with Salinas Valley and connecting the food and agriculture industries with the tech industry and that’s how and why we created the accelerator in the first place. But then we decided to build a platform based on four pillars: the accelerator, a venture fund investing in the startups taking part in the program, a corporate program — whereby we engage major corporates across food and agriculture as well as general tech, and our agtech summit, which we founded in 2013 with Forbes Media.
How did you come up with that four pillar approach?
We designed the platform in line with the scaling of a company, starts with the entrepreneur, and to some extent R&D at universities. We then looked at what the journey of that startup would be; how it would become a major company and then how it would exit. This pushed us to think about how to support startups commercially, making the program less about the classroom, and more about field trials and customer engagement.
So initially we built a partnership with the Western Growers Association and its innovation center in Salinas at the Taylor Building, to help companies scale on acres in the region. Then we added in the corporate component, as we felt that there would be more M&A activity in the agtech startup exit space than there would be IPOs, so we wanted to bring corporates in to potentially be a part of that.
How have you built the many corporate relationships you have now?
That’s a bit of my own background. I had a leadership role at PalmPilot, which grew to be a $5 billion company. Having had 2,000 people on my team and engaging with other companies, I saw how tough it can be when you’re inside an organization looking outside to determine where the innovation is going to come from and where you might potentially get disrupted by girls or guys coming out of Stanford. And of course, that’s an ongoing challenge. Then I founded the Irish Technology Leadership Group in Silicon Valley creating a network of senior executives at some of the top tech companies in the world, from Google to Cisco, and that’s a 20,000-strong network now.
So it was a combination of understanding the problem from experience and having relationships. Of course, we started with Taylor Farms and Driscolls partnerships in the beginning and were very ag-oriented, but now we’ve spread across agrifood and now into various aspects of technology with over 40 corporate partners.
How would you describe the change in technology startups coming through the doors of the accelerator over the past five years?
I think when we started out, we were bombarded by lots of sensor companies; it was all about IoT meets ag and we had so many companies pitch that were coming at it from data collection, but not necessarily a full platform approach. Now, we’re seeing more completed solutions offering a full farm management system. With the labor challenge felt particularly acutely here in Californian, automation has become a big trend with the integration of robotics and AI, and startups are really starting to create technologies that are actually successfully working in the field. Of course, biotech has and remains a strong trend throughout.
How should an accelerator add value to startups in its program?
In real estate, people talk about location, location, location; for startups its access, access, access: to customers, talent, and marketplaces.
And that’s how we’ve concentrated this. We match up entrepreneurs with businesses and a specific agriculture person to help them on both sides. And we run the lean canvas approach, having companies focus on what they need to do and how to commercialize their products.
We work with the WGA to identify specific growers to help get tech into the fields to prove out the technology. Marrying them up is key. Last year we announced our MidWest expansion and there we’ll be going deeper into the livestock category, and we work on getting the “pull” in place to get these technologies into the spaces there.
We obviously cover off on key startup learning aspects such as doing business with a corporate and with a farmer, and getting startups to understand how they should do that. We also do pitch camps, although we try to do less of that and focus more on commercial aspects. And then of course investing in the startups is important but also doing follow on investments after they’ve left the accelerator and we have a significant pool of syndicate partners to co-invest with, as well as our corporate partners who are interested in investing too.
How much do you invest in startups in the program?
We invest $100k into each and follow-on investments can be anywhere between $250k and $1 million. How LPs are high net worth individuals, corporates and family offices and I’ve invested a significant amount of my own capital too. We’re onto our third fund now but we really have an evergreen fund model which we’re continuously bringing capital into.