Farmers Cash Out Early Investment in Irrigation Technology Startup
In a significant proof of concept moment for agricultural technology, AgLaunch and 42 of its farmer network members have cashed out their early investment in an irrigation technology startup. This milestone demonstrates the potential for farmers to benefit directly from investing in ag tech innovations.
Pete Nelson, executive director of AgLaunch Initiative, emphasized the importance of placing farmers at the center of agricultural innovation. “We believe that first, farmers have to be at the center of any new innovation in agriculture,” Nelson said. The organization engages startups early, often in pre-commercial stages, allowing farmers to identify problems and search for technology solutions.
The process involves farmers voting on potential solutions, which then go through an accelerator process and up to two years of field trials. Participating farmers receive stock in these companies, creating a direct link between their investment and the technology’s success.
AgLaunch began in 2015, recognizing that agricultural innovations often require longer timelines than typical venture capital investments. One of the early successes came from an irrigation company that started field trials in 2017. Although the company grew significantly in South America rather than the U.S., the early investment paid off with a 5x return.
The checks received by farmers varied, with the lowest in the hundreds and the highest at $9,000. Nelson highlighted that this is the first global example of a systematic process allowing farmers of all backgrounds to monetize their involvement in ag tech innovation.
This achievement marks a significant milestone for AgLaunch, which currently has 39 companies in its pipeline. The organization is now expanding its network through partnerships with Ag Ventures Alliance and The Pacific Northwest Ag Innovation Cluster, creating a national network for farmer involvement in ag tech.
The Farmers Innovation Network, a joint venture between Ag Ventures Alliance and AgLaunch, allows any farmer to participate. Nelson emphasized that building with farmers is key to creating a successful ag tech system. “If we get all the right farmers into this network at the right terms, then we’re actually building the ag tech system,” he said.
Looking ahead, Nelson is optimistic about future successes. “We’re gonna have a few more solid base hits over the next 18 or 24 months,” he said, noting that the organization’s growing reputation is helping it pick better companies. The potential for larger returns and more significant impact on farmers’ long-term outcomes is substantial as AgLaunch continues to grow.
This innovative approach to agricultural technology investment is set to continue delivering results, providing both financial returns to farmers and advancements in farming practices.
