Agtech company ATC nears $5m Series A target

The Minnesota-based company's Awareness Positioning System aims to help farmers mow more accurately. Agri Investor talks to CEO Kraig Schulz on financing and other topics.

Kraig Schulz is president and chief executive officer of Autonomous Tractor Corporation (ATC), which aims to commercialise agri technologies. Its latest project, Awareness Positioning System, is a land-based system that aims to be more accurate than GPS.

What’s the history of the firm? 

I would say ATC is a family business. My dad was a serial entrepreneur for  45 years. He developed many technologies in his time. By the time he was retired, he had sold his last and the eighth company. ATC is an outgrowth of Automation Research Corporation and was formally incorporated in January 2012 to commercialise agri technologies.

What inspired the business?

The problem with agri is that it’s a hyper-seasonal business. When the time comes, you have to get things done. My dad was talking about finding a way to make the equipment smaller, cheaper, more economic and repairable by farmers. The fully electric autonomous hay-mower [The Spirit], which we designed in 2011, halved the price of the comparable equipment on the market. We got a ridiculous response from the farmers. We doubled the number of people who use the technology from 60,000 to 120,000.

The navigation technology today is far from perfect. If it’s going to guide a vehicle it has to be perfect. We created a system to use the GPS but not rely on the GPS. With the current technology you often find yourself a mile away from what is showing on your GPS. But when you are driving, every second counts so trackers must be perfect. They really need hold you up in a straight line.

What has the financing process has been like?

We are currently doing the Series A round of funding. We really need $5 million to get the latest technology finalised and commercialised, which we’re raising in a Series A round that will close in June. We’re working with strategic investors, but we’re not going to disclose any more information.

We are also expecting to close on $1 million in bridge financing by the end of the next month for packaging and demonstrating the APS. We have collected $4 million over the past three years, and that’s the amount we have ‘in pocket’.

What are the challenges of capital raising?

It’s definitely different from what people are doing today. It’s not easy to understand the technologies. But on the navigation side of the business there’s tons of interest and people think it’s fascinating.

The biggest issue in fundraising is that we are trying to really revolutionise some of the core agri markets (weed control, hay and so on) and that is scary for some people.  It’s a huge hurdle to overcome mentally to think that we are going to have truly autonomous tractors out there mowing thousands, millions of acres on their own. So I think the idea of bringing truly revolutionary technology to market is great to talk about and is what everyone says they want to do. But at the end of the day the money tends to follow evolutionary technology. Incremental steps.  So therein lies the challenge. We need visionary, bold investors. And there just aren’t that many of them – especially those who understand agri.