Upstream Ag Professional - October 1st 2023
Essential news, research and analysis for agribusiness leaders
Welcome to the 11th Edition of Upstream Ag Professional!
This week had more going on in agribusiness than any week I can remember.
Of note, the first three articles are all ever-green Upstream Ag Professional articles, which can be read in their entirety by clicking on the link in the title heading. Only the first portion of the article appears in this e-mail itself.
Index for the week:
Exclusive: Rantizo Raises More than $6 Million to Scale Automation Orchestration
Highlights and Analysis of AGCO's Acquisition of Trimble Ag Assets and Joint Venture
Predictably Iraational: The Dilemma of AgTech Adoption
Top Agriculture Company Corteva Accuses Startup Inari of Stealing Seeds
Harpe Bioherbicide Solutions, Inc. Signs License Agreement for CRISPR-Cas9 Genome-Editing Technology with the Broad Institute and Corteva Agriscience
Tropic Announces Collaboration with Corteva Agriscience Utilizing Tropic’s Groundbreaking GEiGS® Technology to Develop Robust Disease Resistance Traits in Corn and Soybean
Morgan Stanley Investor Event: Corteva
John Deere and Yara Partner to Increase Fertilization Efficiency
The agritech party is over, and Syngenta’s CVC arm is surveying the damage
Biotalys CEO Patrice Sellès Discusses the Future of Biological Controls
Nestlé, Danone, and other major food companies commit to a framework for regenerative agriculture
A new perspective when examining maize fertilizer nitrogen use efficiency, incrementally
Charlie Munger: The Psychology of Human Misjudgement
1. Exclusive: Rantizo Raises More than $6 Million to Scale Automation Orchestration - Upstream Ag Professional
Rantizo raised more than $6 million to scale their leading operator network for spray drone services.
Rantizo connects demand and supply for agricultural spray drone services by selling drones, support, software, and training to ag retailers and spray drone operators and by flying contracted acres for spraying services. Rantizo provides a service platform that can deliver new revenue for ag retailers and seeks to automate spray service delivery.
The future of Rantizo is unlikely to stop at a focus on drones— the future could be the enablement of novel services and business models along with being an orchestrator for the entirety of services and autonomy in agriculture.
Upstream Ag Professional Exclusive on More than $6 Million Funding Raise
Rantizo, the leading operator network for spray drone services, announced today an expansion of its oversubscribed funding round. Led by Leaps by Bayer, with Fulcrum Global Capital and Innova Memphis, this round will allow the new executive team to lean into a new growth strategy for Rantizo
A company raising capital at any time is noteworthy. Given the macroeconomic environment and the investors, it is especially notable.
Leaps, being the corporate venture capital arm of Bayer, furthering their investment, and Fulcrum Global Capital, an innovative investment group that has a notable portfolio of drone spraying company Precision.ai and automation company Sabanto.
When I had a conversation with Rantizo about the raise and their new focus in the market, I was enthralled by the evolution of the business:
“Our vision is to build a service network that puts autonomy to work in ag, starting with spray drone services. We are excited to expand our nationwide operator network, deploy our work management and as-applied map software, and continue our exponential growth in acres treated,” said CEO Mariah Scott.
Given this new vision, I wanted to dive deeper into what Rantizo is working toward, how they might spend their recent capital raise, and look at their business.
Check out the link above for a deep dive into the Rantizo business.
2. Highlights and Analysis of AGCO Acquisition of Trimble Ag Assets and Joint Venture - Upstream Ag Professional
The purchase price for the Trimble Ag business comes in at an implied enterprise value of approximately $2.35 billion and a transaction multiple of approximately 13.8x based on 2023E EBITDA of roughly $170 million.
The transaction brings some natural immediate benefits to AGCO’s business, including integration of Trimble products in all AGCO equipment, channel expansion, talent integration, margin expansion, and amplifying AGCO’s retrofit strategy.
The acquisition/JV has interesting potential implications for the precision spraying market, including the Bosch/xarvio ONE Smart Spray initiative.
AGCO Corporation, a worldwide manufacturer and distributor of agricultural machinery and Precision Ag technology, announced it has entered into a Joint Venture (JV) with Trimble, where AGCO will acquire an 85% interest in Trimble’s portfolio of Ag assets and technologies for cash consideration of $2.0 billion and the contribution of JCA Technologies.
This week, AGCO announced one of the largest precision ag deals ever with the acquisition of Trimble Ag Assets.
In Highlights and Analysis of AGCO Acquisition of Trimble Ag Assets and Joint Venture, I break down the following aspects of the deal:
Trimble products as the primary choice in all AGCO equipment.
Channels to market dynamics.
Margin expansion for AGCO.
Talent acquisition for AGCO.
Precision spray implications.
Whether the deal makes sense for AGCO or not.
To read the full highlights and analysis, check out the link above.
3. Predictably Irrational: The Dilemma of AgTech Adoption - Upstream Ag Professional
Humans are not economically rational— things outside traditional ROI constantly influence us, and are often making decisions based on cognitive biases that are less tangible to navigate. This includes farmers and B2B professionals.
Human psychology needs to be considered to maximize agtech adoption. Hurdles to overcome include loss aversion, status quo biases, and the need to consider how social perception influences decision-making priorities.
Understanding the actual pain point is crucial to positioning the product and understanding the true ROI of an agtech product, especially when progressing beyond the early adopter segment of farmers and agribusiness professionals.
This week, I read a LinkedIn post by Ken Zuckerberg, Lead Economist at CoBank, where he shared Five Things to Overcome to Accelerate AgTech Adoption:
Prove the technology generates a positive return on investment.
Resolve data integrity and cyber-security issues.
Increase performance despite imperfect rural infrastructure.
Determine which technologies are compatible with each other.
Encourage farmers to prioritize what tools can provide a 30%-40% increase in productivity (and ignore everything else).
There are great aspects to the framework, but it is incomplete— for farmers and agribusiness professionals.
There is a need to do much of what Ken suggests:
Proving a return on investment is crucial.
Illustrating data integrity and being transparent helps alleviate farmer concerns about what will happen with their data (though I am not certain cyber-security is a primary concern of most farmers, even though it is essential, more so for the agribusiness professional camp).
Reliable performance, regardless of connectivity, goes a long way with digital technologies.
A coherent understanding of which products are interoperable also goes a long way and needs to be constantly improved.
Encouraging farmers to prioritize the tools that provide the best return is also astute (though I do not know any technologies out there today that give a 30%-40% increase in “productivity”…10% would be excellent).
The above is generally well-accepted among many agribusiness professionals but still falls short.
There is more that hinders adoption that is often overlooked— the specific pain point is not addressed effectively, there isn’t confidence in the education and support infrastructure, and most importantly, but least talked about, farmers and people are predictably irrational, and psychological factors need to be addressed.
These all need to be considered, specifically regarding the group Ken states he is talking about in the post— those beyond the early adopters (early adopters tend to be motivated more by what Ken lays out (ROI, for example).
In the full article, I discuss farmer and human psychology, addressing pain points and the need for solid support infrastructure to create a practical framework for maximizing agtech adoption.
Related: Ag Retailers’ Future Rides on Integrating Agronomy and Autonomy - CoBank
In this report, Ken Zuckerberg provides high-level views surrounding future service expansion for retailers.
There is an excellent reason to look further at Solinftec to bring what Ken talks about to life. This group is driving forward in the autonomy space with a unique world-view and offering to ag retailers (Note: The first story on Rantizo provides another good example):
Solinftec and the Solix Autonomous Platform: Reimagining Farming from First Principles - Upstream Ag Professional
4. Corteva News
This week, Corteva made waves with multiple announcements surrounding lawsuits, partnerships, and industry events.