Are animal welfare and economics fundamentally at odds? Not necessarily, say the founders of Spring Innovation Fund, a new venture studio betting that welfare tech can improve living conditions for billions of farmed animals while also delivering commercial returns.
The brainchild of Mission Barns founder Eitan Fischer, former Blue Horizons principal Nate Crosser, and New Crop Capital founder Milo Runkle, Spring Innovation Fund is a first-of-its-kind venture studio using philanthropic capital to create and support startups that can improve animal welfare at commercial scale.
A 501(c)(3) nonprofit, Spring Innovation Fund brings together tech, founders, and capital, incubating new companies and investing in existing ones. The studio runs a paid three-month entrepreneur-in-residence program, after which selected founders may launch companies with roughly $500,000 in initial funding. Spring may also provide follow-on funding and help companies access additional sources of capital, including venture capital, loans, grants, or other non-dilutive funding.
Spring’s capital comes from private foundations and philanthropic donors who do not take equity stakes in the startups they help launch. However, Spring itself may take stakes in the for-profit companies it helps create, says Fischer. If those companies generate returns, the proceeds will flow back into the nonprofit so they can be recycled into future ventures, creating an “evergreen” model.
Connecting tech, founders, and capital
Spring has already secured some commitments and expects to deploy an eight-figure amount over the first year or two, Fischer told AgFunderNews.
“Our goal is to connect great technology ideas or developments with the right founders and the right capital. We’re focused on where we believe an intervention can significantly improve animal welfare but also has a commercially plausible path to market.”
To date, the studio has identified 100+ potential white spaces, drawing from academic research, animal welfare organizations and producers, with early areas of interest including low-cost humane stunning for crustaceans, broiler welfare, early disease detection, enrichment technologies, AI, and robotics.
The initial plan is to home in on three to four areas where it can bridge the gap between promising science and commercial adoption.
Animal welfare tech and alt protein complement each other
While Spring’s three founders have all spent years in the alt protein arena, Fischer says their move into animal ag should not be seen as an admission of defeat but a complementary strategy to ease animal suffering given the lengthy timelines associated with scaling alt protein.
As for incentive structures around animal welfare, regulatory compliance is a bigger driver in Europe than the US or Asia, acknowledged Fischer. However, regulations in some European markets such as bans on male chick culling might provide the initial stimulus to develop tech such as in ovo sexing that might then go on to gain traction in markets outside of Europe, he noted.
Similarly, it may be that first generation tech in this space could be supported through a small number of consumers willing to pay a premium for better welfare, especially if firms can tie that to other benefits.
Second-generation systems deployed at scale may also offer producers a clearer economic payoff. With in-ovo sexing, for example, every day spent not incubating eggs containing male chicks can potentially save money in energy, labor, and hatchery capacity.
AI, robotics, biotech…
Technology can improve welfare and make business sense on farms in dozens of ways, said Fischer, highlighting AI-based monitoring tech for early disease detection and intervention, and enrichment for farmed fish to reduce stress levels, which has a direct impact on core business metrics such as disease and mortality rates.
“Welfare tech can serve many functions such as preventing or treating painful diseases, obviating harmful practices, providing environmental enrichment, easing transportation stress and cost, mitigating wasteful mortality, monitoring individual health, improving diets, and more.”
He added: “We’re finding some really exciting white spaces around enrichment: getting animals who are bored or not moving much, maybe are aggressive toward each other, giving them some opportunities to engage in more natural behaviors. There are a lot of studies showing that this reduces disease burden, enables animals to be potentially more productive, but also increases their welfare.”
The best welfare innovations do not ask producers to choose between doing right by animals and running a viable business, he stressed. “They make the better choice the economically sensible one.”
Advances in AI, robotics, and biotechnology are increasingly being deployed in animal ag, he noted, with on-farm computer-vision monitoring and wearables becoming affordable enough to deploy at commercial scale, turning animal health and welfare into something producers can measure and act on continuously. Innovations in biotechnology have also opened the door to better genetics, more practical vaccines, and safer biologics.
Exit strategies
While some of the technologies cited above are more capex-intensive than others, animal welfare tech has a sizable addressable market and strategic acquirers such as Zoetis, Merck Animal Health, and Elanco, he added.
“For a lot of these opportunities, the bottleneck is not the science but crossing the valley of death to commercialization, so we’re looking at those early bets where a purely commercial VC may not necessarily want to take on that risk.”
He added: “But some of these companies we certainly expect would be able to go on to raise a more traditional venture capital round, and potentially deliver the kind of exits that make sense for venture capital.”
