Qualcomm Ventures (QV) has been the official venture arm of the global wireless tech player for roughly 15 years. In that time, the company has made a handful of varied, global agtech investments including in Strider, a Brazilian farm management software platform which was acquired by Syngenta earlier this year in the fourth exit for a QV portfolio company this year.
Qualcomm Ventures’ other agtech investments include Israeli end-to-end internet of things platform for indoor and outdoor farms Prospera, Indian agribusiness marketplace Ninjacart, and Chinese farm data platform Farm Easy. QV is also an LP in the BR Startup Fund, a Brazilian early-stage technology fund backed by Monsanto, Microsoft, and other strategic corporate players. The fund made its first investment in Brazilian automated inspection technology platform with agriculture applications Tbit last year.
We caught up with Carlos Kokron, vice president and managing director at QV to find out how the corporate VC manages such an international portfolio of investments and where it’s looking next for growth.
How did Qualcomm get started in agtech investing?
As the mobile world has grown significantly and the cost of sensors and controllers has dropped significantly, we see IoT coming on in a big way. Our current focus on a global basis is IoT, automotive, data center, digital health, and of course, we’re seeing a lot coming about with more powerful computing processes and AI. All of these are converging and we’re starting to see implications for many industries.
We are democratizing access to venture capital. Learn how you can invest with us.
One of the industries we thought was very interesting and ripe for getting connected is agriculture. Brazil is an agricultural powerhouse both in terms of production and exports, so as we were developing our investment strategy for Brazil and as we were thinking about IoT as the next frontier for growth, we started to map what industries would be good candidates and agriculture came about.
That was the genesis for our eventual investment in Strider. We were really excited to be able to do that because there were a number of fronts that we could collaborate with them on and help improve their existing solutions. They were building a proprietary communications box for connecting devices on farms and we said ‘Why don’t we look at standards-based solutions and solutions where you don’t need to spend money reinventing the wheel?’ We worked with them on that front. We worked with them on bringing them closer to carriers and trying out different carriers to see what the opportunity was to connect farms.
Your agtech investments are very spread out geographically in Brazil, India, Israel, and China. How do you find these deals?
The beauty of our platform is that we are global. I have colleagues in Israel, India, and China so we have boots on the ground talking to entrepreneurs. We developed investment strategies that are in line with our corporate objectives as well as with regional opportunities and challenges.
We’d love to continue to explore these themes — we’re somewhat at the beginning. There’s a whole lot more to come as we continue to see the convergence of technology making these platforms more powerful and less costly. In the case of Prospera for example, Prospera is using artificial intelligence, or computer vision if you will, to be able to reduce the cost of analyzing the crops and make better decisions.
Do you see these companies as future customers or acquisitions?
Qualcomm Ventures rarely invests to acquire —but it can happen, we’ve done it in the past. We want entrepreneurs bringing new technologies to market to grow independent and to grow large. That’s when we see the impact of our solutions in the marketplace. It could end up that we acquire them, but that’s not the number one factor — in fact, if you look historically, its a very, very small percentage that we’ve acquired. We invest to grow the markets. We like to say we invest to bring the future forward and with that, we think that the markets for our platforms will grow faster and through new use cases we’ll see new users and that will have a strong strategic impact. And hopefully, as these companies grow and develop a solid financial model, it will also lead to significant financial returns.
How do view connectivity as a barrier to agtech adoption?
We see it as a huge opportunity. We love it. There’s really no technology barrier to connect farms — it’s more about whether the business model holds or not. Traditionally, people build networks where you’re going to have more demand, which lowers your cost of acquisition. But we’re seeing technologies improve. We’re seeing some variants of 4G like narrow-band IoT — some of which will have significantly lower costs to deploy. They all point in the right direction to be able to connect farms. Qualcomm, for example, is piloting using small cells to light the farms with a couple of carriers in Brazil. Pretty much all farms today are connected already, just not really through cellular technology. Sometimes it’s point-to-point radio technology, but once you have internet access you can use a small cell or a picocell and light the farms. And from that point on you can use cellular technology, which is much lower cost than doing something proprietary. It’s more about economics than technology — the technology is there.
Could you go through the nuts and bolts of Qualcomm Ventures? At what stage do you like to invest, what check size, etc?
We’ve been formalized for 15 years or so. We have boots on the ground in the key markets where technologies and platforms are deployed. We typically prefer to invest in Series A and Series B. We actually have very exciting early-stage program that allows us to invest pre-Series A. It’s the same rigor, but a faster track process since clearly, pre-Series A you don’t have all the answers, so we have the ability to place bets quickly on things that we think could be very significant.
Typical checks for us are in the $1 – 10 million range. For our seed program, they range from $500k-$2 million. And obviously, we’re always a minority shareholder. We can lead transactions or not lead. We have a portfolio of over 140 companies. We’ve had a number of $1 billion-plus exits — the mythical unicorn. In the last six or seven years, we had seven or eight billion-dollar exits.
We invest to grow markets. We invest to develop insights and we invest for financial returns. We invest along the lines of markets that are related to our product lines today or future product lines that we expect to have.
You’re also invested in the BR Startup Fund. Do you think that the ramping up of VC activity in Brazil, evidenced by the country’s first $1 billion exit earlier this year, is going to spread into agriculture?
We invested in that fund several years ago. We’ve seen a tremendous development of the VC entrepreneurial ecosystem over the years in Brazil. At the time that we invested, we thought that there was a gap in funding for pre-VC dollars. You’d have angel investors and VCs, but somewhere in between, there was a gap. And that fund is aimed at addressing that gap, writing checks larger than the typical angels in Brazil, but smaller than the typical VCs in Brazil would write. It’s really a technology-based platform and they’ve brought in a number of LPs from different industries.
We were actually seed investors in that unicorn (99) so we’re extremely excited by the outcome. In Brazil, we’ve seen a lot of development in terms of how seasoned the entrepreneurs are, how seasoned the investors are, etc. But everybody kept asking ‘where are the big exits?’ There were exits, but they tended to be smaller exits and I think this one finally opened the floodgates and said that it can happen. With that and the maturing that happened along the way, that stigma is gone. It was long overdue and I’m very happy to see it.
I think we should have seen other big exits a few years prior, but the macro-economic environment precluded that from happening and I’m glad it happened. I definitely think we’ll see many more. I wouldn’t call it a boom. There was a lot of pent-up demand and we’re starting to see people a little less nervous and seeing the opportunity for what it is.