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From Classroom to Field: THRIVE-X and opportunities in agtech education

THRIVE-X university team winners from Demo Day 2018 in Salinas, California

AgTech investment is growing globally but will agtech make its way to the classroom?

The answer is universities are slowly but steadily catching onto this wave of opportunity, specifically in educating a new generation of innovators and entrepreneurs in this space.

The Massachusetts Institute of Technology (MIT) called “Innovation and Technology in Agriculture and the Environment.” AgTech is increasingly woven into the curriculums at universities considered a powerhouse for agriculture education such as UC Davis and CalPoly.

The opportunity is the drive for the THRIVE-X challenge, newly launched as part of SVG Partners’ THRIVE AgTech Venture and Innovation platform.

The program, which kicked off late last year, pulls together university teams where university students, the next generation of agtech entrepreneurs, develop ideas and solutions to some of the biggest problems that farmers face today including severe labor shortages, environmental regulations, and changing customer preferences.

At the THRIVE Demo Day at the Forbes AgTech Summit this past June, university teams from Santa Clara University and Cal Poly San Luis Obispo pitched their solutions to labor shortages as part of  the THRIVE-X challenge.

Judges awarded the winning team Ascensor of Santa Clara University first place, and a $10,000 cash prize for a modular hydroponic solution with better ergonomics for vertical farming. The second-place team, HiveSpy, was awarded a $5,000 prize for its solution using sensor technology to identify when and which hives are ready to harvest.

Last month, local colleges in the Salinas Valley Cal State Monterey Bay (CSUMB) and Hartnell College joined the THRIVE-X mix.

Walt Duflock, managing partner at SVG Partners, confirmed THRIVE-X is opening up the competition for 2018-19 to all universities and colleges in the U.S.

“We expect to see competitors from schools with and without an agriculture focus and most teams will include a mix of expertise, including engineering and business,” says Duflock.

He added, expanding the competitive pool nationwide will “create a wide range of potential solutions for farmers that are looking for innovations so they can grow more with less resources, whether the resources are labor, water, or land.”

The focus for THRIVE-X is to help student teams develop new solutions and work on commercializing them even after the competition is complete.  The contest is not only about research and development, but also about developing and iterating new product solutions drawing from a large mix of disciplines.  

“We hope that universities across the U.S. will choose to participate with teams made up of students that have an interest in agricultural problems and want to compete at solving some of the  most difficult agriculture challenges,” Duflock says.

Now in its second year, Duflock said the program will also extend from eight weeks to nine months “giving us more time to educate the students???  Should reword this as we are not educating the students! so hopefully we get a better product for the farmers to see.”  The goal is to take the products into the commercial phase.

In 2019, THRIVE-X will challenge students to create technologies that tackle some of agriculture’s biggest problems including a continued labor supply shortage and limited water supply. Student entrepreneurs will also find innovative alternatives to steer away from plastics use.

Municipalities and growers see opportunity

Companies such as Taylor Farms and Cisco and the city of Salinas strongly back the idea behind THRIVE-X. For the Salinas region, building agtech and entrepreneurship into the curriculum is a critical element of economic development.

The city is moving forward with its partnership with Hartnell College and the four surrounding cities that make up the Salinas Valley in developing a program to cultivate a knowledge-based workforce for agtech.

Salinas City Manager Ray Corpuz estimates within the next half year the program will ramp up the curriculum, may need to reword – we don’t directly affect the curriculum but the program may potentially drive changes to the curriculum & associated staffing staffing and bringing on board teachers and lecturers.

Corpuz anticipates the growth of agtech companies, which have offices and a footprint in Salinas, such as Trace Genomics will continue to hire whether it be biochemists or technicians. Corpuz said he sees the jobs centered on a “white collar workforce,” which requires new skills.

He continued:

“The biggest single issue that agtech faces is not so much the new technology, but is taking the technology and making those practical business transactions and having the skilled workforce to implement what might be say a simple robotic machine. You might not need a four-year degree or engineering degree but you might have to service the robot.”

Brad Barbeau, a business professor at Cal State Monterey Bay, said the university is expanding its programming and courses when it comes to agriculture and technology.  The opportunity, Barbeau says, lies in the region itself where agriculture in the Salinas Valley alone is a $9 billion industry.

“I would call it pervasive, all of our agriculture courses deal with agtech because it is the future of agriculture,” Barbeau said.

CSUMB has an agribusiness program and through the Institute for Innovation and Economic Development (IIED) supports programs that are agtech focused; last February it co-organized the first Women in Ag and Tech Entrepreneurship Forum. The well-attended event included a panel featuring women in agtech such as Pam Marrone the CEO and founder of Marrone Bio Innovations, Le Thuy Vuong the CEO and founder of Redmelon, and Deema Tamimi the CEO and founder of Giving Garden a company that creates software that connects communities with food.

In the pipeline is also a new incubator program that will be run through the IIED that focuses on the development of the agtech ecosystem. The program centers around helping entrepreneurs who are at very early stages, and will involve mentoring, workshops, education programs and an assessment process.

“The idea is to get them to a point where they go into an accelerator,” said Barbeau. The goal is to launch the incubator program by spring 2019.

The collaboration between growers, corporations, universities, local government and programs such as the THRIVE-X Challenge, appear to be the perfect formula to continue to develop a pipeline of talent.

Partner Feature: Financing Sustainable Shifts in the Ag Economy

We Sat Down With Matt Servatius, Head Of Cleantech At Wells Fargo And Kenneth Scott Zuckerberg, Sector Manager Of Agrifoodtechnology And Packaged Food At Wells Fargo To Discuss The Challenges Agriculture Faces And Why All Classes Of Investors Are An Important Part Of The Conversation And Solution.

Last year, Wells Fargo’s awarded THRIVE a $300,000 grant to support our efforts to help promising technologies and startupsin the agriculture sector evolve from concept to market. A partner of THRIVE since early 2016, the investment followed the bank’s first $100,000 philanthropic contribution to the global startupplatform. Both awards are part of the bank’s larger announcement made earlier this year to commit $200 billion in sustainable financing for projects focused on sustainable agriculture, waste reduction, and water and broad environmental conservation. Outside of the government, Wells Fargo has been the most active agriculture lender for over 19 years.

Can you talk about the role that Wells Fargo plays in catalysing capital as the sector undergoes digital transformation?

MS: At Wells Fargo, our thesis is that the food system is transforming, and we are seeing that every part of the value chain is being disrupted. As a firm, we understand the solution for our clients, the challenges and disruptions, and can identify the real risks that exist. The bank intersects all different parts of the farm and food chain- many of these farmers are already our customers, so when they are looking for financing to mechanize new technology, we are available at this point.

We also recognize the critical need for different investor classes to participate in financing innovation. Unless it’s a software play, venture capital may not be the right class of investment purely from the standpoint that companies should be unburdened with incessant funding. In order to reach the tremendous scale that is required of these companies as they move through incubation to large corporate companies, there is a diversity of capital that should play a role across the life cycle of these companies. Many companies shouldn’t be giving away equity and should instead be proving out their technologies with institutional grant dollars. So, Wells plays a central role because we cover these different class of investors like family offices, sovereign wealth funds, equity, etc., in order to better enable and support these companies.

KZ: The big picture is that food and ag is the last trillion-dollar industry to digitize and embrace innovation. When you look at agriculture, there are major risks involved including food scarcity and insecurity, trade risk, climate volatility, and the more risks there are, the more exciting it is for technology to play a role. In this process, we have to ask whether we are prepared, willing and able to bring capital to bear in the process of understanding if these new technologies will work or fail. As a bank, we are in the position to finance all sorts of innovation that need longer investment horizons and flexibility.

What are the key pain points facing the industry?

KZ: Our approach is to find out first where the pain point is and to be the conduit and financing mechanism for the technologies that are addressing them. Of critical importance in the industry is that there is no common operating system, which is a huge issue. On top of this, there is a lack of consistent rural broadband.

You have to take the complexity and burden off of the farmer as far as adoption goes. Technologists need to think about their models in this sense let farmers focus on their core businesses and don’t make them purchase it. Having them lease it is much more viable.

Labor is undoubtedly one of agriculture’s biggest challenges. If you run a greater demand than your production facility, even assuming no changes to US immigration policy or work permits for foreign workers, then adoption of robotics, automation and other advanced technologies will be key. So how do we do this? In a recent Wells Fargo-sponsored roundtable webinar, I had the pleasure of hosting three industry professionals with expertise in precision farming, robotics and satellite imagery to provide their insight. The group include Sebastien Boyer of FarmWise, Carl Vauseof Soft Robotics and Ron Hadarof Vibe Imaging Analytics.

Farmers have long been accustomed to spending money on seed technologies (genetics) and new formulations of crop protection chemicals as a means to generate additional yield. With diminishing returns from bioengineered seeds and the reduced efficacy of agrochemicals with increasing weed resistance, there is an industrial logic to committing a portion of ‘innovation investment capital’ to robotics and automation as the new products come to market.

As the value chain further consolidates and becomes more vertically integrated, there ought to be more top-down support for modernizing and automating processes through technology as a means to monitor and optimize processes, improve operational efficiency and more effectively manage and monitor risk.

Regarding food waste, I do not subscribe to the idea that we need to produce more, but that we need to be more efficient about our supply.

About Wells Fargo Clean Technology

The Wells Fargo Clean Tech team is comprised of banking professionals with deep cleantechindustry across a multitude of financial firms. The group oversees several cleantech-focused initiatives, including the Innovation Incubator, a $10 million environmental grant program for clean technology startupsand has put $4 billion in solar and wind project investments to work, $9 billion to support LEED-certified and other green buildings, as well as other loans and investments through its Clean Technology and Innovation Philanthropy Program.