Upstream Ag Insights - April 9th 2023
Essential news and analysis for agribusiness leaders
Welcome to the 163rd Edition of Upstream Ag Insights!
Happy Easter to all of those who celebrate!
Index for the week:
ChatGPT Implications for Agriculture
Intelinair to Acquire Aker Technologies
Corteva Sustainability Report and The Sauce Paradox
Bosch BASF Smart Farming and AGCO Announce Joint Development and Commercialization of Smart Spraying Capabilities
The AgTech Paradox: What Biology and Historians Can Teach Us About the Agriculture Industry
Bioceres Crop Solutions Releases FY22 Sustainability Report
Nutrien 2022 Annual and Sustainability Reports Highlights and Analysis
Agrifintech Report 2022
A Short 100-Question Diligence Checklist
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1. ChatGPT Implications for Agriculture - Upstream Ag Insights
On November 30th, 2022 OpenAI launched ChatGPT, a large language model (LLM), that took the world by storm.
From Google Trends:
I think it’s worth more explicitly diving into though.
Where will it impact first? Who’s positioned well to take advantage? How are investments progressing AI? I dive into these areas in this week’s Upstream Ag Insights article.
Intelinair has announced its acquisition of Aker Technologies, Inc., a leading digital agriculture company based in Effingham, Ill. The acquisition of Aker Technologies allows Intelinair to continue to expand in the ag market with additional drone-based digital agronomy tools and complements Intelinair’s portfolio of providing high-resolution imagery and data analytics to manage every field all season long.
Aker is a drone imagery and analytics company. Aker takes drone imagery and applies their proprietary technology to rapidly detect anomalies and agronomic challenges in field.
Intelinair is an imagery and analytics company that primarily uses satellite and aerial plane imagery to support delivering agronomic insights and alerts to agronomists and farmers.
These two descriptions illustrate to us where some of the logic can be found in this acquisition— Intelinair wanting to layer on high resolution drone imaging capabilities into their offering. This also increases the acre access and total revenue of Intelinair.
In fact, Aker and Intelinair announced a partnership last year. Specifically in November of 2022. I highlight the specific month because that means they announced a partnership, but didn’t go through a season together collaborating. I suspect they worked together in some capacity prior, but an acquisition before going through a season together after an announced partnership signals there were financial troubles on the end of Aker.
Aker raised $7.6 million in total according to Crunchbase. Given the likely financial challenges of Aker and the fact that I do not think Intelinair has much for cash kicking around to be acquiring (they last raised capital about 20 months ago and I suspect they do not have positive unit economics so they likely are prioritizing cash for operations), I would suspect this was a full share swap in the 1.5mm to 3mm range based on other comparisons in this area. This conserves cash for Intelinair while amplifying their total revenue from whatever Aker had (I would guess <$1 million in annual revenue).
Last year in the June 12th 2022 Edition of Upstream I highlighted some of the challenges of certain imagery based product offerings plus the fact that the imagery area of the agtech world, like many areas, is ripe for consolidation. I think that is truer today than a year ago and suspect we will see more consolidation given the challenging macroeconomic headwinds from a capital raising environment and the forecasted challenges at the farm profitability level beyond 2023.
3. Corteva Sustainability Report - Corteva
This week Corteva released their 2022 Sustainability Report. I will go through in more detail when I go through their 2022 Annual Report, but wanted to highlight a few things important for agribusiness professionals: