And that current boom has a lot to do with SproutX, an organisation that is working to bring more money and resources into Australian agtech, by supporting up and coming startup companies.
SproutX general manager Sam Trethewey said they are trying to create an agtech community in Australia.
“We’re forming an agtech community in Australia, and I know that might sound a bit fluffy, but community is really important in the startup world, if you go to Israel or Silicon Valley, they have this amazing community where everyone’s there to help each other,” Mr Trethewey said.
“They’ve got the government, big businesses, small businesses, entrepreneurs, all types of people coming together to work together, and while we have some really cool agtechs here and there, we don’t have the same sort of community.”
SproutX is funded by the Victorian government, as well as major agribusiness Ruralco, and independent financial advice firm Findex, and with its $10 million Venture Capital Fund, is able to offer seed funding to a range of up and coming agtechs.
SproutX is about to kick off its first ever accelerator program, where 10 participants will each receive $40,000 in seed funding for an eight per cent stake in their company, and also six month’s worth of mentoring, training and support.
“The participants will get access to advice on marketing, financial modeling, how to raise investments, how to speak to investors, as well as help with their tech development, whether they’re building hardware or software, and anything else that is relevant in building a business,” Mr Trethewey said.
The six-month program will be delivered predominantly online.
“All of our programs are delivered online, we don’t believe in plucking the eyes and ears out of regional Australia, and shoving them into Little Collins Street (where the SproutX office is located), we need people to be where they need to be,” he said.
“But I think we can all agree that nothing can replace face-to-face engagement, so every five weeks, all of our teams will be flown into Melbourne for a one-week intensive course, where they’ll be put through their paces, being fed a whole lot of information and contacts.”
The participants will also have access to SproutX’s communal office space.
“The whole idea of the co-working space is that you meet certain people at certain times with certain skillsets, we’ve got people here with financial services backgrounds, some with hardware backgrounds, and lots of others, and they’ll all have access to each other in the working space,” he said.
“The co-founders of Uber met in a co-working space, and that’s what we want to be able to provide here, it might sound a bit far-fetched, but where else is it going to happen?”
Mr Trethewey said one defining factor of the program is that it is an accelerator, not an incubator.
“Accelerator programs are different to incubators, incubators have no time limit, whereas an accelerator does, at either six or 12 months,” he said.
“The reason we decided to do it this way is because timelines and milestones do things to people, so accelerators are generally faster and more successful.”
He also said that participants in the program will be held accountable for these milestone, to ensure they are staying on track.
“Now that we’re an investor in their business, we have some degree of control over them, which is for their benefit and ours, so they’ll have some pretty vigorous milestones that we’ll both have to agree on,” he said.
“A milestone might be that they have to complete 40 customer interviews, rain, hail or shine, by a specified date, and they will be held accountable for achieving this.”
What are they looking for?
Mr Trethewey said what they’re looking for in participants might not be what you would expect.
“Everyone’s so focused on the idea, and the technology, which is of course important, but for us, it’s actually the team that’s most important,” he said.
“You can have the best technology in the world, the most unique, amazing stuff, but if you don’t have a good team behind it, it won’t go to market.
“We look at team before we look at the tech, and sometimes the technology in some teams might be a little bit behind, but the people are amazing, so that gives us assurance that they’ll find a way around it, and they will succeed.”
He said while they will be holding teams accountable for their own milestones, they want them to be able to “drive their own car”.
“They’ve got to be self-starters, they’ve got to be the type that gets up and goes, and if they’re not, then they most likely wouldn’t be in the program anyway,” he said.
He said the eyes of the industry will be on SproutX to see how successful its startups become.
“Accelerators around the world are judged on how many successful startups come from them, and how much money they’ve raised,” he said.
“The global success rate for accelerators is one in 10, so if we can get that, we’ll know we’ve done a good job.
“And that’s a really big thing for us, that after the program, we’ve got at least one or two that are up and running, and doing some great stuff through either raising capital, or going to market and actually helping farmers along the supply chain.”