Gamaya's international footprint on Digital Ag and Entrepreneurship advice from the CEO

I had the honor to meet Igor last year in 2021 while I was hunting for innovative startups in Agriculture willing to put a spot-on creative people creating value in this world.

Igor Ivanov, a young entrepreneur with a background in applied mathematics and finance, is ready to conquest the agriculture (Ag) world. With his strong determination and Gamaya’s team, a startup he co-founded six years ago, he’s sharing his combatant journey and why he relocated from Russia to Switzerland, where he put down his roots in an entrepreneurial adventure. Learn more about entrepreneurship in Switzerland and Gamaya’s success story in the below one-hour video interview and in this summarized article.

About Igor

• He studied applied mathematics in the software industry and worked for several years in programming in Russia.
• As he couldn’t see himself the entire life doing IT programming but instead being more commercial oriented and closer to people, he moved to investment banking in 2008 during the financial crisis after complementing his knowledge with extra education degrees.
• He spent 5 years in financial decision making and, afterward few years providing investment recommendations for the Investment Committee on one of the largest energy corporations in Russia.
• In parallel, he had an entrepreneurial footprint in an IT startup founded with his friends. In 2011, he ran his own e-commerce business on “smart home” products in Moscow.
• His due diligence experience for various companies made him realize he doesn’t have enough holistic expertise in general business management. Willing to complete this gap, he moved to Switzerland to do an MBA.
• His favorite professor of entrepreneurship, a mighty business angel in Switzerland, introduced him to one of Gamaya’s co-founders during his MBA.
• His strengths: in 15 years, he changed several industries and roles, from software developer to financial decision-maker, investment manager, and other executive positions. The variety of functions and tasks land him in a startup role.

First steps into entrepreneurship in Switzerland

Violeta: Now that we know more about you, you’ve had a brilliant journey with many years behind you, which is not evident at first sight viewing your young age. At what age is it common in Russia to start the professional experience to understand more about the cultural heritage? I’m asking it because I’ve also noticed that professional life starts a few years later in the West, coming from Eastern Europe.

Igor: In Eastern Europe and typically Russia, at 21 years old, you are already in the working market, and by mid-30 years, you become a real professional.

Violeta: Viewing your young age, how do you bring credibility among investors from Western Europe where the culture is different, finishing studies at the earliest 23 years old and being on the working market later on. How did you overcome this challenge?

Igor: When we created Gamaya, I was 28 years old, with more commercial experience than others. It is a big challenge but not a significant bottleneck to convince people to start your own business if you’re not alone. You have to diversify your experience. We have three co-founders coming from different backgrounds and industries. But if you are 23 years old, without co-founders and commercial experience, this can be a big challenge as the credibility is not there.

Compared with the US, in Europe, it is not typical immediately after an MBA to create a startup. Now we live in a time where you don’t need many resources to kick off a startup. The best integration in Switzerland was to do the MBA because I met many people, although I’m not a big supporter of MBA programs. After all, they can create wrong expectations. Being exposed to different people, companies, and backgrounds worked very well for my integration into a new country.

Violeta: Did you see in Switzerland any support from public authorities for startup creation? Any specific programs?

Igor: We were lucky because the core technology we utilize is a spin-off from one of the universities. Most of the startup ecosystems in Switzerland are developed via universities (EPFL Lausanne and ETH Zurich). When innovation comes from university is a good start in Switzerland. We didn’t face any problems opening the company in terms of bureaucracy. Later, we were supported to apply for Technology grants. Overall, Switzerland is good for starting Tech-driven businesses. Coming from the most bureaucratic country globally, Russia, Switzerland is not bureaucratic.

Violeta: From experience after interviewing other Swiss startups, it is among the co-founder's someone with Swiss citizenship who allowed some bureaucratic tasks to be smoother? Or all Gamaya’s co-founders are expats?

Igor: Each of us comes from another country, and we handed up in Switzerland for different reasons. We were lucky because one of the billionaires, owner of the Ferring Pharma, Frederik Paulsen, who provided finance to EPFL and, among other activities, landed in the creation of Gamaya. In terms of background, the two other co-founders come from the academic world and EPFL. They worked for several years on developing this technology (used by Gamaya) which was part of an international project. This is also how Swiss universities work and get funding for research activities. Universities are very well supported by the government and by the Swiss people.

As an expat, I don’t see any disadvantage in opening a startup. Switzerland is a small market, and when you open a company here, you need to think about the international expansion from day one. One of the critical success factors when you want to open a startup is to increase your network. Whenever I had a question about how I find an accounting, legal company, etc., it was straightforward to find an answer by being connected with business angels and relevant people. The startup ecosystem here is very well developed.

Violeta: What would be your three recommendations you’ll give to another entrepreneur in his/her early startup journey?

Igor:

1. Suppose you have a co-founding team and want to develop a business where none of the co-founders have prior experience (e.g., Gamaya's co-founding team's objective was to create solutions for Ag, but none had an Ag background). In that case, it is absolutely critical to have someone from the industry.
2. Bring commercial people from the beginning. R&D is essential initially, but the commercial, marketing, business development, and other activities should not be underestimated. Is it a difference in how European startups are working vs. US startups? The European startups develop a product and then go to the market, and only then do they realize that the market wants something else. In the US, they first create a product prototype and get customer feedback. They do this initially and not in the middle of the business development, allowing them to adjust the strategy and product early enough.
3. The journey in a startup is like an American roller coaster. You need to be resilient in this kind of environment. You can have great people with experience, but they might not be ready for this entrepreneurial environment in terms of mindset. You have a different dimension of innovation, and you need to push over and fill comfortable in this environment. Be able to take risks, and you don’t join a startup for financial reward from day one. You enter a startup because you have passion, want to create something new, or want to make the world a better place.

How Gamaya was born

Violeta: Why Gamaya and agriculture, considering none of you has Ag background?

Igor: We had technology that could be applied to different industries, and we were wondering where we can see the most significant impact of this kind on Tech. Ag was the most prominent industry which was not digitalized during the last 15–20 years. It is the most significant and largest industry that wasn’t touched by digital evolution. Still, we have the pressure of growing population, the efficiency of crop production, sustainability, etc., which creates a lot of stress. We need to feed the growing population in a sustainable way. All these reasons made us to land in Ag.

The brainstorming behind it was to see where we can bring the most significant impact: economically, environmentally, and socially. Then we had to explore different countries as we did not know where to start. It took us some time to meet some growers and Ag players. What helped us is that we met one of the early investors only 6 months after the incorporation, who was coming from Ag industry in Brazil. He invited us to visit his farm in Brazil to be exposed to proper industrial Ag. This helped to develop a much better understanding how Ag works and, in the end, led to the decision to start with the business in Brazil. We were selecting between Brazil and Ukraine, the largest Ag economies. Ag for these countries is instrumental, contributing to 20–30% of the GDP (Gross Domestic Product), the most dynamic export industry. We want to be in the countries where Ag is fundamental. If we take US, which is the largest food-producing industry globally, Ag today represents 4–5% of GDP, where although it is still critical, it is not so fundamental for the economy.

Violeta: Summarizing one of Gamaya’s strengths, we can say that six months after the creation, you saw the reality and the needs.

Igor: Definitively, it helped that one of our investors came from Ag, and we were exposed to farmers. It is essential to surround yourself with investors who can bring you something else on top of the funds, such as expertise, network, etc.

Violeta: So, would you recommend choosing an investor not only for the money but also for the expertise and exposure?

Igor: It is not wrong to have only financially driven investors, but if you do so, it creates a need to have additional expertise inside the management team.

Violeta: How long after the creation did you raise your first funds?

Igor: In our case, because we were gradually spinning the technology from the university, we spent the first 6 months still being in the research lab; we did not have a company, but we knew that we wanted to create one. We leveraged this opportunity while being part of the research ecosystem and started to talk with Business Angels (BA) and early-stage investors. So, from early creation, we already had our first BA network willing to support us. The second month after the creation, we had our first 60k CHF coming from BA. But this kind of relation was created before the company.

The 1st fundraising happened more than six years ago. But it wasn’t done as 1st round. We created the company, and then we started our fund-raising efforts. We didn’t do a series of fundraising, just collecting convertible loans*, being the most flexible way to kick start and avoid legal complexity of fundraising. So, for the 1st year, we were fundraising only using convertible loans, and then once we became much more mature, we decided to go for a Series A equity round.

Zoom on Gamaya

Violeta: Tell me more about Gamaya. How has it been 6 years since you started? What technology are you proposing for the growers, the services, etc.?

Igor: we developed Gamaya on the premise of new technology. We wanted to capture local agronomy knowledge and scale it using the remote sensitive technology and propose digital agronomy solutions, leveraging imagery coming from drones. We never intended to replace agronomists but rather enable much more efficient decision-making. You still need a doctor to prescribe medication if I bring an analogy. Still, he is equipped with MRI or other systems information, so he’s prepared to make good decisions and prescribe medication. In our case, we don’t replace agronomists or farmers. We equip them with digital Ag tools to make qualitative decisions. Worth mentioning that typically farmers and growers take in average 40 decisions in a growing season.

How traditionally do agronomy farmers work today? To identify different issues, e.g., the presence of weeds, etc., a farmer needs to scout, sample, then send it to the lab, which is not scalable. Imagine you operate on a scale of millions of hectares, such as in Brazil. You cannot scout and sample accurately and fast this kind of acreage. So, this is what we are trying to do. We develop digital Ag solutions for various crops, starting in Brazil, where we focus on two major crops, which are sugar cane and soybean. We learned that it takes time to develop digital products in agriculture because of the seasonality and the nature of agriculture. The Ag is probably the most biologically complex environment. You have to describe this environment using digital Tech. This environment has many variables: weather conditions, soil, crop varieties, growing practices, etc. You need to develop a thorough understanding of agronomy and specific crop markets.

Today in sugar cane, we work directly with large sugarcane producers called Sugarcane Mills**. We provide a combination of drone-based and satellite-based solutions (e.g., from plant efficiency analysis to the detection of weeds, going up to harvest mgmt.). So, we try to cover a complete growing cycle providing a holistic solution for the grower.

We take a very different approach to soybean because the sugarcane market in Brazil is quite consolidated. You have around 300–400 Sugarcane Mills vs. soybean, where you have thousands or hundreds of thousands of farmers (large or medium-small size growers). In soybean, we couldn’t address the growers directly. Hence, the go-to-market was to partner with established Agriculture businesses (B2B) and integrate digital Ag products with conventional products, fertilizers, crop protection, machinery, etc. We partnered with one of the leading CP companies and decided to go on a specific pest in Brazil known as the one billion $ problem.

If we talk about Ag in general and if you try to address it with one crop, soybean in Brazil and soybean in the US are two completely different markets, and the market structure is different because, in the US, you have retailers with a very established footprint, while in Brazil is not the case. If you go with sugarcane in Brazil which is no1 largest producer, and India, which is the 2nd largest, the scale and the problems they face are entirely different, even for the same crop. This is the reality of Ag because it is challenging to come up with a solution that, from day one, will be able to address different crops and markets. Today beyond Brazil, we have India, where we work with business partners, and we leverage what we learned from Brazil in terms of crops and markets but when it comes to commercialization is an entirely different story.

Violeta: For soybean in Brazil, you mentioned you partnership with one of the largest CP company. Can you say with what company?

Igor: We are partnering with Syngenta, and we have been developing this partnership over the last 3 years.

Violeta: And on the sugarcane, you have direct access to the growers without partnering with any CP company.

Igor: Indeed, for sugarcane we have a local team in Brazil that is explicitly addressing the sugarcane market directly. We don’t rely today on business partners. We try a B2B approach, but it is not well established, such as in soybean and other crops. In soybean, we partner with CP company only for a specific issue, and we can still address some of the problems in soybean directly with other partners.

Violeta: How is it the environment in Brazil? Is the distribution channel quite strong enough to block you not being able to go directly to the growers, or do you even think as part of the Go To market to see what other types of partnerships you can have with big distributors?

Igor: When this AgTech system appeared six years ago, the central premise was that we would disrupt traditional distribution channels in Ag. What we learned today is that you must rely on traditional distribution channels and combine digital services with conventional products. We are not disrupting but instead partnering with the traditional channel. I don’t believe that today, at least in the digital Ag, a standalone digital service is a sustainable and scalable business model.

Violeta: How do the farmers perceive the services you’re providing and how expensive they are?

Igor: The biggest challenge when it comes to farmers and how they perceive it is the training requirement and education because they don’t have necessary experience with digital solutions. As a small company is a challenge for us because we can’t address the market as we don’t have resources. Ag is the most traditional industry despite changing rapidly, so you have to develop trustful relationships with your customers, and it takes time. They don’t trust the solutions if they are not applied in their fields and experience it at least during the grower season. So is very difficult to come with a solution and ask farmers to pay from day one because they need to see benefits. You start with something more straightforward in terms of pricing, and then over the years, you can shift to a price once tangible benefits can be seen, and you can calculate ROI, etc. This is how today's industry operates.

Violeta: Are the farmers you are targeting today running on conventional intensive Ag or organics?

Igor: We have different profiles, but we focus on industrial Ag growers today. We have a few growers who are more advanced in sustainable growing practices. This is changing but is not still reality today.

Violeta: So, your key market is Brazil, and you started in India, mentioning the differences between these countries in terms of climate conditions, etc. What about the growers and farm size?

Igor: Brazil is known for industrial Ag, while India is about smallholder farming, and it is tough to play in two markets because what you see in Brazil can’t be applied in India. In India, we decided to focus on sugarcane because you have aggregators like Sugarcane Mills, a corporate entity sourcing sugarcane from thousands of small farmers. We deal directly with these entities, being an easier way to address countries such India.

Violeta: You mentioned at the beginning that Ukraine is one of the countries with big farm sizes. Do you have similar plans to go in Ukraine?

Igor: We are not present today in Ukraine mostly because resources required to develop solutions for specific crops and market are not the same. We had to learn to prioritize and focus due to limited resources we have and because the development cycle of digital solution in Ag is quite long.

In the past we had more activities in multiple crops and multiples geographies because we underestimated the complexity of the product and market development. Today we decided to focus on fewer crops and establish Gamaya as the market leader from digital imaging domain in these respective markets and crops and then expand. Today we are trying to expand our footprint in strategic crops and markets.

Violeta: Thinking about expansion, what about the US? Would you consider the US and any other countries?

Igor: US is definitively an exciting market, leader in digital images and technology for sure. We will be considering the US but only together with a partner. The only complexity with US, to address it, you must be there. So, you must invest a lot in the local team because you can’t handle the US remotely.

Violeta: Considering the team and your ambition for expansion, how big is Gamaya today? How many employees you have, and what type of background do they have? As you mentioned is essential to have people experienced in commercials, not only in R&D.

Igor: We have around 30 people, split between the commercial team in Brazil, software developers, scientists, product owners, and operation teams. We brought Ag expertise internally at the management level and the board level. We are still a software-driven organization, but we have an excellent established commercial team.

Violeta: on your mid-long-term strategy and the mission to grow, where would you see Gamaya in the next 5 years? You mentioned that the US would be good, although challenging. I wondered about Russia because there are also huge farms and tiny farms. You are coming from Russia. Why is it not on your list?

Igor: I spent quite some time in Russia being part of Gamaya, and I traveled to meet some customers. We didn’t see the demand for innovation back on that time (5–6 years ago). Russia, together with Ukraine, is definitively on our radar to expand. If you address Ukraine, inevitably you address Russia or vice versa because they are very similar on crops and market structure. Ukraine and Russia are consolidated by large players Agro holdings, in the same way as sugarcane market in Brazil.

In term of our strategy, we don’t think just about geographical expansion. We are thinking about evolution vertically in the crop. Let’s take sugarcane. Today we provide solutions to improve crop production from planting inefficiency to harvest management. E.g., nowadays is a big topic to enable growers to participate on carbon credit market. To enable growers, you need to monitor sustainable practices such as no-till, cover crops, etc. And we believe that remote sensing is the technology that could help monitor the use of sustainable practices on a large scale. Sooner or later, we will start adding this kind of tools (called MRV — Monitoring Reporting Verification) to enable our customers to participate on carbon credit markets. So, this is one of the ideas we are currently exploring, beyond just expanding to different geographies and markets. When it comes to soybean today, we focus just on one program solution to detect specific pest, and we intend to build a complete portfolio for soybean growers.

Violeta: thinking on the carbon footprint and how important it is to be tackled in EU27. Is it any country part of the EU27 where you would like to test an expansion?

Igor: US is leading the market regarding climate and carbon sequestration and carbon credit markets. We definitively want to leverage our existing footprint. Taking Sugarcane in Brazil, the government introduced a new program called RenovaBio***, one of Brazil's largest carbon credit markets. This is one of the genuine opportunities for us to have sugarcane as main market. Also, we don’t exclude the opportunity to go together with another partner and address the need in the US.

Violeta: as we arrive to the end of the interview, tell me if we can live in a perfect world, how do you see the future of agriculture?

Igor: I know that Ag will be different and is changing rapidly, but also, I know it is a long-term play even with digital tech. Digital Tech will definitively allow to grow crops in a more efficient, automated, and sustainable way. The problem today is the lack of diagnostic. The machine and automation to apply treatments without human interaction is already there. We need to learn how to analyze crop conditions on a large scale.

Agriculture is going to be technified and is already to a large extent. The big companies such as established Ag corporations will need to be part of this game. And not just startups who will be changing Ag significantly but will be joined efforts between startups and corporations to drive it forward.

Violeta: Keeping in mind everything what you said and how do you see the future of Ag, what would be the message on Gamaya’s strengths you will give to an investor?

Igor: We are leading the game in digital Ag in one of the largest food producers in the world. Today Brazil feeds Asia. We have a solid footprint in two major crops in Brazil. We are focusing on improving the efficiency for the global food production. We are part of the digital evolution in Agriculture. We are doing it with the help of new technologies such as remote sensing, agronomic modeling, and Artificial Intelligence. We don’t replace the knowledge; instead, we try to capture it and scale it using remote sensing technology****. Since we are coming from research environment, we spent some time developing scalable IT infrastructure. If you don’t have a scalable IT infrastructure to support products, you are not competitive.

We are facing very intense competition today where most of the competitors are trying to address different kinds of crops and markets. We believe that what differentiates Gamaya from our competition is:

1. our B2B approach because we don’t see today digital as something separately but rather as part of an integrated offer;
2. We have been focused on specific crops from day one, and we have deep expertise in these crops developed over many years.

Violeta: Igor, it was an absolute pleasure to know more about you, Gamaya, and your successful team. I’m sure we will have other opportunities to reconnect, and until then, I wish you good luck to you and your entire team.

Igor: thank you, Violeta, for such an opportunity. It was a pleasure.

* Convertible loans are a form of debt financing. The investors become creditors of the company. When a startup issues a convertible loan, there is no company valuation at that moment. The discount is the main reward for investors, expressed in a percentage. A convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features.

** A sugarcane mill is a factory that processes sugarcane to produce raw or white sugar. The term is also used to refer to the equipment that crushes the sticks of sugar cane to extract the juice. Learn more about sugarcane production in Brazil .

*** Read about the implementation of RenovaBio — Brazil’s National Biofuels Policy

**** When farmers or ranchers observe their fields or pastures to assess their condition without physically touching them, it is a form of remote sensing. Observing the colors of leaves or plants' overall appearance can determine the plant’s condition. Remotely sensed images taken from satellites and aircraft provide a means to assess field conditions without physically touching them from the point of view high above the field.