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Why Germany’s Amathaon Capital invested in autonomous tractor startup AgXeed

May 27, 2021

Ag robotics are catching a tailwind as investors start to see promising startups come up with models that can add real value to farming operations at prices farmers can afford. 

“We looked at around 60 companies globally,” Borris Foerster, managing partner at Amathaon Capital, tells AFN.

The Munich-based firm, which recently came out of stealth, just announced an investment in Dutch autonomous tractor startup AgXeed. The size of the deal is undisclosed. 

Amathaon is focused on late seed-stage and Series A agrifood tech startups. A few areas of interest for the VC include sustainable ways to implement the EU’s European Green Deal and addressing labor shortages in agriculture across the globe. 

Amathaon Capital also invested in Hamburg-based E-Farm’s October 2020 $5.3 million Series A round but kept its participation off the record at the time. The startup manages a digital marketplace for secondhand farm machinery.

“We didn’t want to go public because we had such a good deal flow at the time. We tried to remain in stealth. Now what we’re doing is taking a very strategic portfolio approach. We invest much more like a classic strategic investor than a typical VC that I would say looks at a company and sees a silo. We have a very clear vision of where the industry needs to go,” Foerester explains.

Among the many autonomous farm equipment startups hitting the scene, AgXeed’s AgBot stood out to Amathaon for a variety of reasons. The startup offers what it describes as fully autonomous tractor systems with modular and scalable hardware, virtual planning tools, and data modeling. 

With a low operating weight of no more than six tonnes and track widths of 310mm to 900mm, the startup also claims that its machine is gentle on the ground, which plays into many farmers’ growing desire to improve soil health through less disturbance.

The autonomous field robot is also diesel-electric powered, available in up to 156 horsepower, comes wheeled or with a fully-tracked undercarriage, and has a standard three-point hitch. This makes it a suitable tractor for many farmers across the globe, according to AgXeed.

“It is an extremely experienced team that has very deep industry experience. They have a vision that we think is very unique, which is the integration of autonomy into a wider supply chain […] It was a major reason why we invested in them,” explains Foerster.

Prototypes of the tractor are nearing production state and expected to enter the field before the end of 2021. The new funding will be used to support a demo tour starting in June 2021 and lasting through September 2021. AgXeed will visit at least 15 different locations throughout Germany and the Netherlands to provide farmers with a hands-on opportunity to see whether the AgBot is right for them.

“One of the reasons we’ve chosen a tool carrier over a company like Naio, which is an interesting case, is that we find from our farmers that they don’t see how it will be economical for them to buy a different bot for each case,” says Foerster.

“We don’t see a future in systems where you need one robot for each task.”

Instead, he believes that the first wave of automation in agriculture relies on making autonomous robots economically viable for farmers in terms of total cost. He lists companies like ZTractor and Monarch Tractor as examples. The latter just raised $20 million in a Series A round. There’s also Bear Flag Robotics, which ‘up-fits’ tractors to make them autonomous. It raised $7.9 million in a seed round earlier this year. [Disclosure: AgFunder, which is AFN‘s parent company, is an investor in Bear Flag Robotics.]

AgXeed also recently secured funding from German farm equipment manufacturer Claas. The investment is part of a “cooperative venture” between the two companies to develop and commercialize autonomous agricultural machinery.

“It’s a win-win situation in our view, and one reason why we decided to invest […] as well as the fact that the targeted AgXeed technologies are in an advanced state of development,” Claas Group CEO Thomas Böck said in a statement.

“This solution offers farmers and contractors concrete economic added value, and what’s more, it will soon be available.”

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