Help Growers Increase Yield and Save Water: Our Investment in SupPlant
In today’s world, growers do not only need to increase yields — to feed the growing population — but also do so while facing the constraints of limited water supply and volatile climate.
For a while now, Israel has been a hub for great AgriTech companies trying to tackle these challenges from various angles. However, many of them struggle to overcome the inherent difficulties of the industry: capital-and-labor intensive solutions, risk-averse customers (who know their land better than any techy salesman! 😉), high cyclicality, and long sales cycles.
This has led many growth investors to avoid the sector, citing reasons like inferior unit economics, low capital efficiency, business models that are yet to be stabilized, and lack of market adoption for these new solutions. As a result, the AgriTech space is less crowded with VC investors, and therefore more attractive in terms of valuations. This means that the ones who do believe in the potential of AgriTech, could enjoy significant returns, driven by revenue growth and multiple expansion. And we, at Maor Investments, are strong believers.
After having an in-depth review of the AgriTech market in the past two years, we can say the abovementioned notion is definitely changing: solutions generating clear ROI translate to quick adoption; traction is eventually building up in the space, providing strong financial performance for companies with a sound business model and clear Go To Market strategy. With global attention to food security, climate and environment on the rise, from both governments and the private sector, we take the view that sizable AgriTech companies will indeed emerge, just as happened in other sectors that have historically faced similar challenges.
With this view in mind, this week we announced our investment in a company we feel is one of the firsts to fulfill this promise: SupPlant, the second AgriTech company in our portfolio.
After having an in-depth review of the AgriTech market in the past two years, we can say the abovementioned notion is definitely changing: solutions generating clear ROI translate to quick adoption; traction is eventually building up in the space, providing strong financial performance for companies with a sound business model and clear Go To Market strategy.
SupPlant collects data from sensors placed at the plant’s fruit, leaf, and stem, and in deep and shallow soil. Combined with a proprietary dataset of thousands of growing seasons around the world (the largest of its kind, actually!), SupPlant uses unique algorithms to provide real-time and forecasted insights and precise irrigation recommendations. With SupPlant, farmers can now increase crop yields and on the same time dramatically improve water consumption, while also making their crops more resilient to extreme weather events.
SupPlant’s solution has already proved its product-market fit, showing very strong growth in 2021 with hundreds of customers around the world. These customers, after overcoming the initial skepticism, embrace SupPlant’s actionable insights to replace outdated, rigid irrigation protocols, unfitted for today’s needs and changing climate.
Although this is more than enough, what got us even more intrigued was SupPlant’s latest release of its first-of-its-kind, hyper-scalable API product. Relying on the company’s unique knowledge, SupPlant now offers a sensor-less technology (all you need is a mobile phone!), designed for hundreds of millions of small scale farmers — the vast majority of farmers globally. These farmers currently do not have access to any of the advanced solutions that modern AgriTech companies offer, and with SupPlant are now able — for the first time — to receive smart irrigation recommendations and weather alerts. The product is already used by 500,000 (!) maize farmers in eastern Africa, and the company expects to keep this rapid deployment pace into more geographies in the near future.
Needless to say, another attractive perspective is that SupPlant generates clear positive environmental and social impact wherever it’s deployed — from large corporate growers in Australia to smallholder farmers in Kenya — and promotes many of the UN’s sustainable development goals (SDGs).
Besides the giant market potential, strong technology and impressive traction, meeting the SupPlant team — led by Ori — was definitely a major factor in our decision to invest. SupPlant HQ is located off the usual startup beaten path — in Afula, the heart of Jezreel Valley, one of Israel’s central farming areas. When we got to Afula, we witnessed a group of dedicated professionals (some drive every day all the way from Tel Aviv!), with a real connection to the product, belief in its potential, and passion to make it a huge success.
Maor is proud to collaborate with our colleagues at Red Dot and other investors in the company’s $27m Series B round, as SupPlant continues to fulfill its vision to digitally inform every irrigation decision on earth, and help farmers speak better plant.
