First for NZ’s Agri-Tech Innovators
16 December 2019
Significant investment to help grow sector launches today
New Zealand’s international reputation as a leader in the agritech sector is taking another leap forward with the announcement that Callaghan Innovation has partnered with Sprout to become one of its Technology Incubators.
Sprout Chief Executive, Dean Tilyard, says the agreement will be a significant boost as the investor group backing Sprout includes two iconic New Zealand companies, Fonterra and Gallagher, as well as global venture capital firm Finistere Ventures and Israel’s most active venture investor, OurCrowd.
“By bringing together two global companies with internationally connected and experienced investment partners, Sprout is developing a world class platform to allow early stage agritech and future food technologies to be commercialised and launched into international markets.
“The capability of our investment group alongside Sprout’s existing networks and corporate partners means we can really lift the level and sophistication of seed and follow on investment available to New Zealand’s emerging agritech and future food technologies and start-ups by providing a clear pathway that is connected to international capital and markets.
“Together we will be able to provide more support for entrepreneurs and organisations who want to move fast and think big and who are committed to building solutions for problems that address the challenges and opportunities of global food production,” said Tilyard.
The Technology Incubator scheme significantly increases the amount of capital available for early stage agritech and future food start-ups. Each time Sprout and its partners invest $250,000 into an agri-tech start-up Callaghan will also provide the start-up with a repayable loan of $750,000 supplying the start-up with $1m of seed investment. Sprout’s investor group have sufficient resources to complete up to 40 seed investments.
Kahl Betham, Deputy CEO & Executive Director of the Gallagher Group says that “the quality of Sprout is sure to attract great new ideas and talent from around NZ and further afield. It is highly likely to accelerate the growth of NZ’s Agritech exports, currently valued at $1.5B.”
Fonterra Director Category, Strategy and Innovation, Mark Piper, says the partnership with Sprout is a great fit with the Co-op’s new strategy which focuses on sustainability, innovation and efficiency. “It will enable us to do things we couldn’t do alone and will allow New Zealand companies to unlock new food and technology services that will delight customers and consumers around the world,” he said.”
Looking to the future, Dean says that this is an exciting period of growth for Sprout with well-known angel investment leader and former CIO of Fonterra, Marcel van den Assum, taking up the position as Chairman in the new year.
Finistere, led by kiwi born founder and partner Arama Kukutai, are active agrifood tech Tier 1 investors with offices around the world and soon to open in Palmerston North alongside Sprout.
“The last five years has seen unprecedented capital flow into start-ups in the agrifood space, with over $25B USD invested into more than 2500 start-ups according to Finistere & PitchBook Data. New Zealand has largely missed this first wave, but we believe there is huge opportunity for Sprout to help position early start-ups to go global with the support of this syndicate and the bold investment by Callaghan.”
Kukutai continues with praise for Jon Medved, founder of OurCrowd, the global investment platform that brings venture capital opportunities to accredited investors worldwide. Since its establishment in 2013, OurCrowd has raised some $1.3B USD In commitments and invested over $600M in over 200 start-ups and 19 venture capital funds. “Jon brings a depth of expertise and significant relationships to help the companies we invest in grow.”
OurCrowd has a wealth of experience running incubators including the OurCrowd LABS02 incubator in Jerusalem, the LABS08 incubator in Southern Israel focused on cybersecurity and digital health, and with Finistere and Israeli food industry leaders, “Fresh Start” a 1bn NIS dedicated foodtech incubator in northern Israel.
Building connections with Iwi is a key area of Sprout’s focus. Tuia Group Partner, Toko Kapea who has supported this initiative says about Iwi investment and Māori participation that, “We are already in the traditional agri-space and moving in to research that directly affects the asset-base to commercialise in New Zealand and globally is the natural progression to grow Māori economic aspirations.”
“This will have a huge impact on the pathway of NZ agrifood and start-ups to develop into significant companies that will provide employment, export revenue, return on investment and contribute to sustainable agriculture, food production and distribution,” Tilyard says.
“We are looking forward to increasing our partnership with Callaghan and our connection with the NZ science community as we work to transfer more of New Zealand’s world class research from CRI’s and Universities to high growth globally focused start-ups.”
The technology incubator will build on Sprout’s existing successful business accelerator that includes partnerships with key players in New Zealand’s agritech and future food sector including LIC, Zespri, KPMG, AGMARDT, PGG Wrightson, CEDA, Massey University and Gallagher.
Sprout is an agritech accelerator operated by Palmerston North business incubator The Factory since 2014. To date Sprout has received applications from hundreds of start-ups and accelerated 46 start-ups who raised $11 million in seed funding. Companies who have graduated from Sprout include Koru Diagnostics (animal health), OnSide (farm management), Hectare (orchard management) Arepa (nutraceutical drinks) Farmote Systems (pasture management) and Micropod (mircogreens).