In a landmark moment for farmer-driven agricultural innovation, AgLaunch and 42 of its farmer network members have announced a successful cash-out from an early investment in an irrigation technology startup. This event marks a significant milestone in the journey of farmer-led agtech development and investment.
AgLaunch, a farmer-centric agricultural innovation initiative, has been pioneering a unique approach to agtech development since its inception in 2015. The organization engages startups at very early, pre-commercial stages, with farmers playing a pivotal role in identifying agricultural problems that need technology solutions. This process is akin to crowdsourcing, with farmers voting on potential solutions and scaling them through an accelerator process focused on agriculture. The selected companies then undergo up to two years of field trials, with farmers taking stock in these companies as part of the process.
Pete Nelson, executive director of AgLaunch Initiative, emphasizes the importance of farmers being at the center of agricultural innovation. “We set out with the premise of having farmers in the middle that could have a play in the ag tech sector, and we could probably grow companies better by putting capital, data and farmer influence on what the problem is,” he says.
The recent cash-out from the irrigation technology startup is a testament to the success of this approach. The company, which started field trials with five farmers in 2017, has seen significant growth, particularly in South America. The returns on investment have been substantial, with farmers receiving checks ranging from hundreds to thousands of dollars. This is a significant achievement, considering the typically long investment horizons in agriculture, which can span 12 to 15 years.
Nelson highlights the uniqueness of this approach, stating, “This is the first time that we can tell in the world where a systematic process that farmers know how to get involved in is open to every kind of farmer, regardless of crop, gender, background, type of farm, this is the only time there’s a system like that that has been able to monetize these services in a holistic way.”
The success of this investment is not just a win for the involved farmers but also a proof of concept for the AgLaunch model. With 39 companies currently in its portfolio, AgLaunch is poised for further growth and success. The organization has also forged partnerships with Ag Ventures Alliance in Iowa and The Pacific Northwest Ag Innovation Cluster in Oregon to form a national network, further expanding its reach and impact.
Looking ahead, Nelson is optimistic about the future. “We’re gonna have a few more solid base hits over the next 18 or 24 months,” he says. “But what we’ve also gotten better at doing is picking better companies as our reputation has grown up.” This success story serves as an inspiration for farmers and agtech innovators alike, demonstrating the potential of farmer-driven innovation in shaping the future of agriculture.
For farmers interested in getting involved, AgLaunch offers a unique opportunity to be part of this innovative network. Through partnerships like the Farmers Innovation Network, a joint venture with Ag Ventures Alliance, any farmer can participate and contribute to building the agtech system of the future. As Nelson puts it, “We’re going to build a network of farmers that can help bridge how we farm now to how we farm in the future, and that becomes sort of the gateway toward how we think about innovation and what we’re building together.”