Q&A: Ag-tech company The Yield to accelerate growth after closing Yamaha-led funding round
Award-winning Australian ag-tech company The Yield, which is transforming farming practices for irrigation-intensive crops with scalable digital technology solutions, recently closed an A$11m (US$7m) initial funding round led by Yamaha Motor Ventures. We caught up with Ros Harvey, founder and managing director of The Yield, to hear about plans for the funding, what benefits its solutions can offer farmers, and what the future may hold for the ag-tech sector.
FFP: How did The Yield begin and what was the motivation behind it?
RH: Prior to 2010, I worked in Geneva for the United Nations and World Bank. It was here that I founded a global social enterprise in the apparel industry, Better Work, which uses technology to reduce reputation risk for global brands associated with breach of labor standards in their supply chains.
In 2010, I returned home to Tasmania. There’s not a lot of apparel factories in Tasmania, but it is home to an amazing agriculture and fresh produce industry. The Yield was born in that transition. My passion for the environment and commitment to a more sustainable future is what drove the creation of The Yield.
FFP: When did the company first start selling products and providing services?
RH: It was in 2015 when we were confident that we could offer a compelling solution that provided significant commercial and environmental benefits to growers.
FFP: How was the process of developing your solutions and what were the main challenges?
RH: We set out to solve the uncertainty of weather, which is the one thing that growers cannot control. This is core to our technology - the ability to use AI to predict microclimates with a high degree of accuracy.
We take big data and put it to work in easy to use apps so our customers can make fast and confident decisions. We combine this with our customers’ data sets to solve problems on-farm and along the supply chain. We are focussed on delivering commercial returns and clear return on investment for our corporate customers.
This means increased revenue, reduced cost, risk mitigation and digital transformation. Each crop is different but they all share the challenge of operating in uncertainty created by weather.
FFP: What are the agricultural crops that your technology and solutions are targeted towards?
RH: We work with large commercial growers of intensive irrigated specialty crops where microclimates are critical to managing outcomes. We know who our customer is and how to deliver ROI from our solutions. We currently work with customers who grow, distribute and market berries, avocados, wine grapes, apples, almonds and tree nuts.
FFP: What is the minimum size of the operations you work with?
RH: Minimum customer size is driven more by the crop value than absolute area, but it also incorporates our customer's ability to make a difference as a result of the insights we provide - in that our solution powers decision-making around eg: crop spraying, irrigation, and harvest.
As an indicative example, we work with a corporate nut producer with 12 farms, a large wine producer with 9 vineyards, a berry producer with three "super sites", and an avocado company with groups of farms across three different climatic zones of Australia.
FFP: What are the biggest benefits of Sensing+ and your data analytics services for farmers and farming companies?
RH: The greatest benefits of our solution are optimizing supply chain, food chain security, and yield predictions to support better price realization.
FFP: Which problems are you addressing in areas of the food chain other than at the farm level?
RH: Customers use core yield prediction capability to better manage price negotiations with retail chains, labor scheduling, contract growers, processing and packaging, and logistics.
FFP: Could you speak a bit about this latest funding round led by Yamaha Motor Ventures? What are your plans with the funding, and future expansion plans in general?
RH: This current capital raise is series A funding. Proceeds will be used to accelerate our global patent strategy in targeted jurisdictions, product development, and to further build our marketing and sales capability.
We are looking to raise a total of $12.5 million in new money. As part of this round, an additional $7 million in equity is available to new investors prior to 16 July 2020. This additional investment will be held on our balance sheet and used to fund our slingshot strategy to accelerate once the post-Covid-19 market environment is clearer at the end of 2020.
FFP: How do you see the role of digital technology evolving in the agricultural sector, both in Australia and globally?
RH: Digital technology will increasingly become part of the fabric of growing all crops in all locations. Our customers are large corporates, often with listed or with professional investors. Investors are increasingly demanding data-driven businesses to reduce investment risk, ensure scalability and environmental sustainability. As digital solutions mature, and clear return on investment is demonstrated, adoption will accelerate.
FFP: What future technologies and trends do you expect to see come out of the Ag Tech sector over the next few years?
RH: The trends of digital transformation have been compelling for agriculture. COVID-19 is accelerating digital transformation in the bid to secure food supply chains. The biggest challenges have been accessing labor, market access and remote management of distributed assets.
Technology, like The Yield’s, is helping the sector meet these challenges. I expect technology that optimizes the return on existing assets, enables remote management of distributed assets, precision agriculture and use of AI, rather than traditional biophysical modeling, will accelerate.
I also expect to see the adoption of automation and robotics to pick up. The Yield’s technology is essential for faster adoption of robotics. For example, for one customer we double the effective spraying window for robots by using microclimate data and predictions as opposed to the gridded product.
Increasing the windows in which robots can operate is essential for achieving the return on investment on technology for customers. Yamaha and Bosch, as market leaders in robotics, understand this relationship between microclimates and robotics.
The key is ensuring that digital solutions are delivering a sharp focus on return on investment and improving commercial performance.