New Zealand’s Sprout Agritech and Israel-based venture investing platform OurCrowd were selected last year by Kiwi government agency Callaghan Innovation to run a new agrifoodtech acceleration program in the Land of the Long White Cloud.
The duo had joined forces New Zealand dairy giant Fonterra and agrifood-focused US VC firm Finistere Ventures to bid on the tender.
Sprout is accelerating the future of food production and delivery. Find out more here
OurCrowd also invested in Sprout – and the Kiwi outfit couldn’t have hoped for a more accomplished partner and shareholder.
According to CEO Jon Medved, OurCrowd is Israel’s most active venture investor with a portfolio of 220 individual companies, 22 funds, and five incubator programs worldwide.
The platform has 60,000 individual investors from 183 countries backing its companies, and it’s managing $1.5 billion in funding commitments. OurCrowd invests in a wide array of sectors, including agrifoodtech, cybersecurity, mobility, cloud computing, and e-commerce, to name just a few.
AFN spoke to Medved and Dean Tilyard, executive director at Sprout, to find out more about the two companies’ blooming relationship.
AFN: Why did OurCrowd decide to invest in Sprout? What sets it apart from other accelerators in the Asia-Pacific market?
Jon Medved (JM): We decided to invest in Sprout because of the partners involved in this incubator. We are huge fans of Finistere [with who] we share an incubator already in Israel, Fresh Start, and several other portfolio investments. We are delighted with the Sprout management, who established a very successful track record already in their activities in New Zealand and obviously Fonterra makes a great additional partner. We think that the New Zealand tech ecosystem, especially for agtech and foodtech, is as good as it gets, and we are especially excited about the opportunities there.
Dean Tilyard (DT): We’ve been building Sprout for the past half-dozen years, and there are a couple of things baked into our aspirations and our DNA. One thing is we’re close to ag here in New Zealand – we’re never very far away from a farm here. We’re also very close to New Zealand industry, and leading agrifood companies have been our partners from the outset. The other thing — and this is where OurCrowd comes in — it’s our aspiration is to build a pathway for our companies to go global. For that we knew we needed connected capital. As we started to build our own funding structure, we were looking for outside investors to help provide that.
AFN: How did Sprout and OurCrowd get connected initially?
DT: We met OurCrowd through our relationship with Finistere. We’ve been working with them for a number of years, and they shared our aspirations about building out. They introed us to OurCrowd and from the outset it was just a really natural relationship – they understood our vision. They’ve built a hugely impressive operation in Israel, they’re also very aspirational, and we’re really looking forward to working with OurCrowd and its global reach.
AFN: What are the synergies between the two firms?
JM: OurCrowd and Sprout share huge synergies, given our extensive involvement in the agtech and foodtech arena worldwide. We have a particularly strong portfolio and will focus on this area together with partnerships around the world, by hooking up New Zealand to the greater OurCrowd network – and in particular with the vibrant ecosystem in Israel, which we think provides great added value.
AFN: What are OurCrowd and Sprout hoping to achieve through their wider collaboration?
JM: We are going to help all the companies in the incubator access global markets to the best of our abilities and provide access to additional capital and strategic introductions, as well as our leads on key hires. This business today is all about going global, and to the extent that we are able to provide those kinds of connections together with our partners at Sprout, we are going to work hard to deliver this to our startups.
DT: OurCrowd have invested in us and are a part owner. We’re looking to make up to NZ$41 million [$28.2 million] in seed investments over the next few years. For us to do that, aside from access to capital, we really need access to market intel and expertise – we call that ‘network access’ – and we need to do that far more efficiently than New Zealand companies have done in the past. So it’s going to be a very active relationship.
Firstly our focus is on New Zealand. There’s a large amount of agrifood R&D going on here, so there’s a pipeline of relevant local intellectual property. We also have plans to make New Zealand much more attractive as a destination for foreign entrepreneurs to come here and grow out globally. Obviously that’s been interrupted by the Covid-19 pandemic, but we have plans in that area. New Zealand is definitely a great place to be, and we’d love more startups to come down here and join us.
Sprout’s accelerator has been running for five years. In that time we’ve seen a progressive year-on-year increase in international applicants, who now make up 50%. We do have some priority areas – sustainability, greenhouse gas mitigation, nutrient management on farms, and water management.
AFN: How do you expect the two companies’ relationship to develop in the future? What else will you be collaborating on?
JM: We expect a broad range of cooperative activities together with our partners in Sprout. We are making a long-term commitment to the New Zealand ecosystem and the huge potential that it represents for startups and innovation. We have teamed with some of the best people in the world and we look forward to not only starting early-stage companies, but continuing to investigate the new frontier, which is in agtech and foodtech, now recognized as a major growth area attracting unprecedented amounts of venture capital worldwide.
AFN: What similarities do you think there are between the agrifoodtech ecosystems in Israel and New Zealand? And what are the differences?
JM: New Zealand and Israel are both small countries that punch way out of their weight class. Israel in particular is very good at developing cutting-edge technology and we are now working hard on developing the ability to scale up our companies. We’ve been particularly successful as an ecosystem in attracting overseas capital. This year there will be $10 billion invested in the ‘Startup Nation’ ecosystem, and we think that we can help New Zealand to further develop their very promising startup community.
DT: New Zealand looks to Israel because of the long-term success of its startup ecosystem. I’ve been really privileged to visit a few times – we’re both small countries, we have that natural affinity of the little guys versus the big guys. I think we’re intrigued at how quickly Israel has accelerated the development of its startup ecosystem. One thing we’re impressed with is their willingness to share knowledge and networks. I also hope they’re able to learn aspects from New Zealand as well.
AFN: What do you think are the most important themes from a tech perspective that OurCrowd, Sprout, and other agrifoodtech investors need to tackle? What are the most important problems that need solving, and what are the most compelling solutions to solve them?
JM: We are particularly excited about the emergence of artificial intelligence [AI] as a critical driving factor in the next generation of agtech and foodtech companies. The convergence of big data, sensor technology, real time communications, and prediction optimization AI puts a real focus on the ability to create truly multidisciplinary companies that have a wide variety of skill sets, including the core foodtech and agtech experience. This challenge to provide the talent, skills, and connections across these different disciplines, I think will be the key focus for companies in our environment.
