Rob is the cofounder of AgFunder, an online venture capital platform investing in agtech and foodtech. Rob is a Forbes contributor and has also been published in TechCrunch, Harvard Business Review, Financial Post, and twice in Nature journals. He has five degrees, spanning Philosophy, Computer Science, and Computational Biology, including a PhD from Yale University.
THRIVE: Tell us about AgFunder, where it started and where it is today?
RL: My background is in AI, computation, robotics, and quantitative finance and in 2009, I asked the question, what is an interesting industry which intersects these areas? AgTech is where I saw the confluence of these new technologies. Agriculture technology does not have a traditional investment model, and it certainly did not back then.
Silicon Valley is really special in that it has capital, investment, customers, institutions all in one place, but it is very difficult to apply Silicon Valley to agriculture. Back when we started, venture capital was used to SaaS, consumer, mobile and marketplaces, but when you started to talk about agriculture, you’d lose VCs and so the basis for AgFunder was to reimagine venture for an agriculture technology company. The concept and the industry was really nascent at the time, so we got shut out of mainstream media. AgFunderNews was borne of the idea that we were not only going to need raise awareness, but also become the center of gravity via an information platform that would catalyze agtech. So in between research and building an ecosystem, AgFunderNews filled a void: information.
We have recently closed our first investment fund, and will invest in 10-12 companies at the start. The idea here is to become a regular investment platform, and to socialize our deal flow and make it available for co-investment under a special purpose vehicle that we manage. Importantly, 50 percent of AgFunder today is engineers behind the scenes developing sophisticated algorithms to identify opportunities, recommend co-investors, and systemically create scale and networks with agtech companies. With over 45,000 subscribers, we want AgFunder to present technology and deal flow in a way that is personalized for our ecosystem, and vice versa.
THRIVE: What is different about agtech compared to other mobile, fintech and other investment categories in Silicon Valley?
RL: Silicon Valley likes really big markets and fast-moving technology, and Climate Corp was a great catalyst. At the beginning, it was a chicken and egg problem, because investors weren’t seeing caliber of entrepreneurship and entrepreneurs weren’t seeing capital. Today, we see really great companies and solid capital platforms available, inside and outside of conventional venture.
AgFunder is looking for great returns and we see that Seed and Series A is where most of the value is today. That said, we are looking at longer timelines with longer burn in, we have to know that the technology is defensible, know the market, work the kinks out, and stay in- because the industry is hostile to rapid, disruptive technology. Depending on the sector, companies will encounter regulatory headwinds- as in the case of biotech- or tailwinds- as with irrigation management companies.
Growth is not going to hit traditional VC metrics, and so the traditional venture model will need to adapt.
Across the ecosystem, you see good conferences, media and research, critical mass, sharing of best practices, more data and the people telling those stories. So despite that agriculture is an industry that is historically big, global, and fragmented, the collaboration happening today will continue to play a really important role.