Ag-tech fund raising new $10 million fund to provide scaling capital
Ag Startup Engine, a fund for ag-tech startups, made six investments in new companies in 2024, bringing the fund’s total portfolio companies to 40, according to its latest annual report. The report also shows Ag Startup Engine made three investments in existing portfolio companies, and two of its companies were acquired.
The six new companies the fund invested in were FloVision Solutions, TRIC Robotics, Terrashroom, Kimle Aquaculture, Dalan Animal Health and Bovi Jet.
The two companies that were acquired were:
- Haber Technologies, whose founders developed a novel grain aeration and management solution, was acquired by Shivers Manufacturing Inc., a grain drying technology company based in Corydon.
- Bloomfield Robotics, a Pittsburgh-based company that monitors the health and performance of specialty crops using advanced imaging and artificial intelligence, was acquired by Kubota North America Corp., a subsidiary of Kubota Corp. in Osaka, Japan.
The six new companies the fund invested in were FloVision Solutions, TRIC Robotics, Terrashroom, Kimle Aquaculture, Dalan Animal Health and Bovi Jet.
“It is really impressive to reflect and look back on the impact that our portfolio companies have had,” said Mikayla Mooney, venture partner at Ag Startup Engine. “They are truly solving problems for farmers and producers, and they’re solving critical problems around, how do you improve yield? How do you solve for labor challenges? How do you maximize efficiency, and how do you increase worker safety? … So I think that is so impressive. And then, when you look at the people who are part of the network, we just [have] some really, really high-caliber people that truly care about solving these problems and want to be a part of this.”
The impact its portfolio companies have had is outlined in the report:
- 385 jobs created
- $33,292,509 of revenue generated
- 22,264,226 pounds of food affected
- $6,871,753 in grant funding secured
- 12,171,413 acres operated on
- 203,394 farmers and producers worked with
- Three companies that reached profitability
The report also explained why the fund passed on deals in 2024. The biggest reason? The team.
Mooney said founders need to work full time on their ventures, or the funding round needs to allow the founder to go full time.
“I think you just get 10 times more things done, and you just move at a much faster pace, because you have to,” Mooney said. “So I think founders being full time is really important.”
Other factors in Ag Startup Engine passing on deals were a need for startups that have “validated market demand and are solving well-defined pain points,” the impact of the fund’s network and deal economics, according to the report.
Ag Startup Engine started in 2017 as the brainchild of Kevin Kimle, said Mooney. Kimle currently serves as the Rastetter Chair of Agricultural Entrepreneurship at Iowa State University, director of the Start Something College of Agriculture and Life Sciences program, and senior lecturer in the department of economics.
“He had a lot of students, alumni reaching out, working on really interesting technologies to solve problems across food and ag, and at this time, back in 2017, like the venture ecosystem here in Iowa doesn’t look anything like what it looks like today,” Mooney said. “And so the idea was, what happens if we bring together a group of people from the industry in ag and what if we give these founders a small amount of capital, surround them with the support network, and essentially buy them time to work on their idea, instead of going and taking a job with corporate America?”
With that, the first fund came together, raising just over a million dollars all from small to midsize farmers and producers, Mooney said. Ag Startup Engine invested in 15 companies, writing $25,000 to $50,000 checks.
“And so you’ve got this great network of people who can serve as mentors, advisers, help you navigate sales contracts,” she said. “I think when it started, it was very much like an experiment.”
From that first fund, there were a couple of early exits, with two companies that were acquired. That success led to raising a second fund in 2020, which was $3.3 million with a similar concept to the first fund.
“We’re in the process of wrapping up that deployment. We’ve got probably about another year left, and we’ll make another 10 or so investments,” Mooney said.
Ag Startup Engine is working on a third $10 million fund that’s meant to provide scaling capital, she said. Mooney said fundraising started last year and the fund has closed on about $5 million so far.
“So we’ll write much larger checks and be able to support companies as they continue to grow,” she said. “With this third fund, it’ll allow us to buy a bigger seat at the table.”
The fund also just rolled out its Early Stage Cultivator Grant Program, which has about $15,000 available for grants of up to $2,000, to drive early-stage activity, Mooney said.
“This would almost be like before we would look at investing in a company, like maybe someone that’s very early that needs just a little bit of money to get started,” Mooney said. “Can you take this money and build your product, or build a prototype? Can you take this money and run a trial, put your product in the hands of customers, a way to de-risk it before you would think about, ‘Hey, I think I might want to go raise money,’ or ‘I might want to apply for some state grant funding, or non-dilutive capital.’”