Coronavirus has created ‘perfect storm’ for ag robotics to thrive – Root AI

Founder Josh Lessing says the mixture of ag and robotics focused investors contributing to Root AI’s $7.2m seed round feel the same sense of urgency from different perspectives.

The recession and a sharpened focus on labor availability created by covid-19 could hasten advancement in agricultural automation, said the founder of specialty crop robotics start-up Root AI.

“An agricultural robotics company can make massive headway in this market, where the vast majority of businesses see it as a time to shelter in place,” Josh Lessing told Agri Investor soon after Boston-headquartered Root AI’s $7.2 million seed round was announced in mid-August.

“Recession and covid is this perfect storm for advancing the field of robotics, from a customer interest standpoint, a decade forward.”

Root AI was founded in 2017 after Lessing had learned about the role of robotics in food and agriculture as director of research and development for Soft Robotics, a Bedford, Massachusetts-headquartered robotics company that raised a $23 million Series B in January. Lessing said his experience at Soft Robotics included working with customers in the food and beverage industries to design robotics capable of handling fragile food items quickly and efficiently.

That background, said Lessing, informed the design of Root AI’s flagship robot, Virgo, which is equipped with an artificial intelligence-supported real time detection capability and soft grippers designed to mimic the dexterity of the human hand. The design facilitates use across a variety of crops including grapes, tomatoes, cucumbers, peppers and strawberries, among others.

“When you talk about specialty crop producers, what they have lost [due to covid-19] is not a one-off machine. What they have lost, and what would empower their operations, is regaining access to a workforce,” Lessing said. “Developing a technology that over time starts taking on new roles at the farm means you are starting to create a durable labor force that farmers can count on. That is a paradigm shift.”

That the per kilo pricing model Root AI charges its customers with translates to a cost comparable to farm wages, Lessing said, highlights the degree to which concerns around ag labor focus more on availability than merely cost.

“Our customers struggle with labor supply, where labor cost is secondary,” he said. “Creating labor savings does have a huge impact on their bottom line. These are organizations [specialty crop growers] that can operate on a few percent net income margin, so allowing them to experience savings of 40 percent of their expense in labor is very substantial.”

Root AI’s seed round brought its total funding to $9.5 million and will be used to help develop organizational support for the two Virgo units already deployed in California, according to Lessing.

He described the round as a very traditional fundraising effort, including commitments from venture capital firms PJC and First Round Capital, as well as a mixture of other ag and robotics-focused LPs.

“The agriculture investors see the urgent need for a technology of this kind in the market. The robotics-focused investors see the technological capability that exists in the world of robotics is in the right place,” he said, highlighting how declining costs for relevant hardware and computing power is fueling the pace of innovation.

“They both rely on different buying signs based, for one, on a technological worldview and the other based on a market worldview. They are both coming to the same conclusion, which is this is an important moment in time to be making their investment.”

John Deere’s $305 million acquisition of Blue River Technologies in 2017, which is arguably the most prominent exit to date in the agricultural robotics market, saw cutting-edge technology absorbed by an established pillar of the agricultural economy. Lessing said the potential of a company capable of offering technology-enabled production to large-scale specialty crop producers, allows him to envision a different path forward for Root AI.

“I am thinking more about turning Root and what we know about technology and the market into a substantial player that stands on its own,” he said.