US irrigation equipment and services company Valmont Industries has acquired Israeli crop analytics startup Prospera for $300 million. The partners claim that they now operate the largest vertically integrated AI company in agriculture, which focuses on digitizing center pivot irrigation systems.
The duo first began working together two years ago after Valmont saw how Prospera’s technology was working in Idaho.
“I don’t think anybody thought that this could develop into M&A but we were all very passionate about transforming such a largescale piece of infrastructure into essentially a robot or smart intelligence machine,” Daniel Koppel, co-founder and CEO of Prospera, tells AFN.
Omaha, Nebraska-based Valmont designs and manufactures products for the agriculture industry like large-scale irrigation equipment with a focus on water conservation.
Founded in 2014 and backed by Qualcomm, Cisco, and Bessemer Venture Partners, Prospera began by assisting growers with spraying using computer vision images to look at pests and diseases. From there, it moved to irrigation and built a tool to assist with in-season decision-making. After conquering these functions in the greenhouse environment, Prospera was ready to take its technology to the wide-open field.
Today, the Tel Aviv-based company offers machine learning-backed technologies that continuously monitor and analyze plant development, health, and stress. It aims to capture multiple layers of data from the field to provide growers with easy-to-understand insights delivered through mobile and web dashboards.
Partnerships vs. acquisitions
Propsera and Valmont claim that their technology was used on five million acres during 2020, representing a two-fold increase over 2019’s user data. Valmont and Prospera expect user numbers to double again during 2021.
Part of Prospera’s decision to take the M&A route had to do with its go-to-market strategy. Selling direct-to-consumer was difficult, according to Koppel, which views Prospera as having greater expertise in technology in lieu of marketing and sales.
“Right now, we are 90 people and most of them are scientists. Building a direct go-to-market strategy requires a slightly different type of company and a lot of discipline in terms of the efforts being put in,” he explains. “So, a few years ago I said let’s focus on our core competency, which is science, and find other ways to go to market.”
This approach yielded a number of partnerships for Prospera including Bayer Crop Science. In lieu of continuing to pursue multiple partnerships, Prospera saw the streamlined sense in joining Valmont.
“We saw it as breadth versus depth. The question was, do we proceed in a broad approach going with many channel partners or do we do it with one that is extremely big because now we have much greater resources, a big existing channel within irrigation, and we can build channels outside or irrigation with a brand that’s known in the field.”
The agrifood tech space is seeing an uptick in acquisitions as entrenched players and more advanced companies see the benefits of scooping up promising startups. Telus Agriculture, the ag-focused arm of Canadian telecoms giant Telus, launched in 2020 with seven acquisitions and plans to add more to its roster.
Last year alone, Farmers Business Network acquired Farmsave as part of its foray into the Australian market. It also added Prairie Livestock Supply to its portfolio last month to build out its animal health and feed capabilities. Regenerative ag-focused firm SoilWorks Capital acquired PastureMap in 2020 as its first investment while major animal health company Zoetis acquired Performance Livestock Analytics that same year. Israel’s ICL acquired Growers and CropX acquired CropMetrics last year, too.
Prospera is not ruling out further M&A as part of its growth strategy.
“We are planning to grow the company substantially and we have very big plans going forward. This is not the last time we’re going to be in the headlines in the future.
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