Last year, Monsanto’s digital ag division The Climate Corporation, acquired SupraSensor, a nutrient-detecting sensor manufacturer, as one of the agribusiness’s first steps towards building a sensor network.
AgFunder recorded 39 M&A deals in the agritech sphere in 2016, of which 11 were in the farm management software, sensing, & IoT category where SupraSensor sits. But typically, acquisitions have been few and far between in agtech. So we caught up with SupraSensor founder Calden Carroll, around nine months on from the acquisition, to find out a bit more about the acquisition and how the startup merged with Climate Corp.
When SupraSensor was founded, what was your unique selling point?
SupraSensor was founded with the vision that monitoring chemical properties directly could improve sensor accuracy at decreased cost and enable the development of new sensors for previously unaddressed environmental and industrial applications.
SupraSensor’s first focus was nitrate, both in biochemical and agricultural applications. It turns out in the agricultural case; we were able to show that we could detect nitrate even in salty water or in soil, and do so without worrying about the sensor drying out or requiring some sort of extraction solution or buffer component. Technologies currently on the market — such as ion-selective electrodes — require a continuously wet environment and the use of nitrate extraction solutions (NES) to function well.
Our differentiator enables the use of our sensors in intermittently dry environments like soil. The ability for the sensors to directly detect nitrate without extraction steps makes some agricultural applications more convenient, or even possible in some areas where they weren’t before.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
How did the competitive landscape develop in nitrogen sensors?
Originally, we set out to replace paper nitrate test strips in the “Salad Bowl” of California with a tool capable of geotagging and digitally reporting the data as they were collected. There are a number of protocols involving simple nitrate strip testing to monitor fertigation outputs, management units within fields and outflows from highly irrigated fields. These protocols have been developed within the University of California extension system (as well as others), and developing a tool to streamline those workflows seemed like a good starting point for in field proof-of-concept. It was also a low barrier pathway to validate our technology in real-world use. With an increased focus on sustainability, this also seemed like a good opportunity to provide growers with a tool to manage their operations efficiently.
There have been other companies in this space that have been interested in addressing this problem with larger instrumentation. We, however, sought to create a pen-sized sensor that wirelessly connects to a cell phone and allows for in-field collection of lab-quality nitrogen data on demand, and with our nitrate sensor, the process took less than two minutes!
This is now a key component of R&D at Climate, and we’ve deployed different prototypes across our research fields in the US. We continue to evolve the nitrate sensor to fit our R&D needs, and it’s really exciting to see the progress that has been made and the data it’s bringing in.
How did the Climate acquisition come about; were you expecting an acquisition at that time, or did you have other funding options?
While we had been successful in providing a real-time measurement of nitrate levels, we struggled to provide insights from those measurements or any additional value. We knew we could create the data, but that was as far as our in-house expertise went. To really find value from the data we were providing required a few steps: creating the data stream, applying those data to a model, and transforming those outputs into a prescription. I’d built a plan around solving our data needs and developing a pilot scale manufacturing workflow, and we really needed investors to start chasing those opportunities.
Up until that point, I had funded the company entirely on state and federal grants. This dictated a bit of an unconventional development path: we focused more on the scientific novelty of our solution rather than the “productizability” early on. Once we moved past proving basic technological proof-of-concept, we required more elasticity in our funding than is allowable under most granting budgets. Also, the National Science Foundation’s SBIR program places a strong emphasis on industrial partnerships, so we need to find a valuable industrial investor to participate in our upcoming funding round to meet NSF’s Phase IIB matching program. It was almost at this exact same time that we were contacted by The Climate Corporation.
What stage would you say your technology was at when you started acquisition talks with Climate?
We had a limited release of the sensor to academic and government partners and had a relatively small number — barely into the hundreds — of working prototypes. We’d had a single season of proof-of-concept for our in-field sensor. I’d say we were well within the “R” of R&D, and my manufacturing plan reflected that. More importantly, identifying the product requirements for the complete solution — sensor, model, and actionable prescription — was only in its infancy.
We entered into talks with The Climate Corporation with the intention of bringing them on board during Series A as an industrial partner to leverage the matching program I mentioned. I was surprised by the offer of licensing and acquisition but ultimately felt that we’d only begun to solve the first third of the problem. I knew we could solve more of the problem if we brought our tech together with the data science expertise and insight at Climate.
Why was SupraSensor a fit for Climate?
It has to be a good fit both ways. My interest was really piqued by Climate’s work on the spatial variability of nitrate. Gaining a solid understanding of where we’d need probes within a field allows us to focus on the variability at depth and across weather events at that location. There is a lot of interesting science happening at Climate with serious implications for both increasing input efficiency and optimizing yields. And, I’m passionate about protecting the lands and water that I enjoy in my spare time, so decreasing the chance for fertilizer runoff is what hooked me about finding a solution initially, and I saw this reflected in my initial discussions with the folks at Climate.
How has the tech developed since the acquisition and how did being part of Climate impact that development?
The last nine months have been spent building up our testing and validation plans while redesigning portions of the sensor system to enable larger scale deployment. We’re currently doing quite a bit of field testing, gathering, and analyzing data from Climate’s research farm network in the MidWest.
One of the most immediate benefits of bringing this technology together with Climate is the access to both prototyping and field testing facilities. Our iterative cycle has significantly compressed, and we’re providing not only in-field data for a more statistical approach to field level N variability but in-lab data to further refine our understanding of the nitrogen cycle and the processes therein.
What is the go-to-market strategy for SupraSensor?
We are currently focusing the nitrate sensor technology on providing higher quality data to the Nitrogen Monitoring Tool in Climate FieldView, and supporting broader R&D efforts within Climate. We continue to partner with academic and ag industry partners and pass that knowledge on to growers and agronomists in the most scalable way possible, and as we work to further develop the nitrate sensor, currently in the early stage of R&D, we will continue to gain deeper insight into soil N-processes.
I think it’s safe to say there’s been some investor fatigue around sensors. One criticism is that ground sensors are taking measurements at specific points in the field, which requires a lot of averaging work. The challenges around deployment in the field and the potential for malfunction/servicing has also put some retailers off wanting to engage with this tech. What’s your response?
What excites me is we are technology-inclusive and explore the chance to bring together a broad set of models and measurements to bring the best set of insights to farmers. The nitrogen monitoring tool in Climate FieldView models the nitrogen cycle and projects nitrogen availability for the crop to provide farmers with direction on nitrogen applications for their fields. This has been a game-changer for the industry, and our nitrate sensor is the next evolution of that. By taking real-time measurements in the field with advanced sensor technology, we can generate even more precise insights for farmers.
Of course in a perfect solution, we’d never need to install or deploy hardware in every field. Today, we can gather measurements through a variety of tools, in-field measurements or by remote sensing, bringing the two together only creates more, enhanced insights.
Nonetheless, I understand that sensor investment can be a challenge and potentially risky investment. But as machine learning becomes more advanced, and as we are able to further automate systems and take advantage of those efficiencies, the need for novel and more accurate data streams will only continue to grow. Quality data is a key need for model development. In-field sensors may be slightly ahead of their time regarding our understanding of field variability and our ability to deploy these systems effectively. We have to commit to rolling up our sleeves, collecting those data sets and working with them to improve our understanding of complex soil processes in their natural environment. I’m confident at Climate we will continue to use the nitrate sensor to improve operational efficiency, optimize yield and reduce environmental challenges.