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Ag Startup Engine has secured a fourth investor

February 8, 2017

Ag Startup Engine has secured four investors for its ag-tech startup program, organizers told Clay & Milk this week, but is hoping to line up eight to 10.

Announced about nine months ago, the program is a joint initiative of Iowa State University and private investors looking to bolster ag-tech entrepreneurs and companies. The investors will provide capital and mentorship, while formal programming for some startups will come from ISU’s Startup Factory.

joel-harris
Joel Harris.

“This was born out of the Ag Entrepreneurship Initiative (AgEI) because out of that program there were some really good students or alumni … that were faced with a chronic problem that I see in all startup communities (which is) early, seed-round investment,” said Joel Harris, one of the co-directors of Ag Startup Engine’s fund.

Summit Agricultural Group, Ag Leader Technology and Ag Ventures Alliance were the initial investors in the program.

Land management firm People Co. has joined them as the fourth investor, Harris and AgEI director Kevin Kimle said.

In addition to securing investment dollars, Harris said one of his goals is to develop Ag Startup Engine’s mentor list. Harris previously worked for Harrisvaccines before its sale to Merck.

Kevin Maher of GlobalVetLINK is also a co-director of the fund.

Harris said Ag Startup Engine wants to have a $1.2 million fund for a three-year period. The program would then invest about $25,000 to $50,000 each in 10 to 15 companies, he said.

The seed money, Harris said, will hopefully “lessen the anxiety” for students and entrepreneurs wanting to start a company but needing a way to pay the bills.

“Some of these entrepreneurs are coming right out of school. They’re given this choice of ‘well, I have this idea and I can start a company’ or ‘I can take this internship or take this job at a big company and I’ll put my idea on the backburner,’” he said.

Even though there are details to work out, Ag Startup Engine is already working with three startups: Gross-Wen Technologies, Precision Livestock Analytics and Smart Ag.

All three of those companies are participating in Iowa State’s Startup Factory. Harris said Ag Startup Engine will likely see a number of applications from the Startup Factory, but the fund won’t rule out investing in startups outside of the university.

Central Iowa Economic developers, universities and investors have already identified ag-tech as an industry they see ripe for startup development.

At least two other startup programs, also announced last year, are in the works.

Iowa MicroLoan in Boone has the Rural Ventures Accelerator intended to boost ag-tech companies in smaller communities. The RVA will focus on assistance to companies rather than investment, Iowa MicroLoan President Craig Downs said in an email.

RVA has identified its group of ventures and eight Iowa counties — Poweshiek, Hardin, Delaware, Harrison, Lee, Mitchell, Ida and Adams — as pilot partners.

The Greater Des Moines Partnership announced an ag-tech accelerator — modeled after the Global Insurance Accelerator – and four initial investors last year. More details on that program are expected soon.

All three seem to have resources or interest from similar sources.

For instance, Peoples Co. is also an initial investor in the Partnership’s accelerator. Ag Ventures Alliance and ISU’s Community Vitality Center are working with Iowa MicroLoan on the Rural Venture Accelerator.

Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.

Ag Startup Engine has secured a fourth investor | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
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