Agtech-focused venture capital firm Finistere Ventures made its first robotics-only investment into a company with plans stretching beyond agriculture, according to the firm’s founding partner.
Finistere participated in the $8.8 million financing round for Invert Robotics, a New Zealand start-up offering inspection robots using non-magnetic traction for industrial inspections.
Arama Kukutai told Agri Investor that while Finistere’s investment in Plenty – an indoor, vertical farming start-up whose investors also include SoftBank – harnesses automation at a broader scale, the firm had not invested in start-ups focused only on the direct application of robotics to farming’s monotonous tasks.
He added economic and technical challenges make many of the most exciting potential applications of robotics in agriculture likely long-term propositions.
In the meantime, he said, in addition to inspection of storage tanks for ag-related chemicals, Invert Robotics can expand into other industries like aviation, pharmaceuticals and oil and gas as industries continue to strengthen their focus on the safety of personnel sent to inspect enclosed spaces.
“Our focus is on agri-food, but as we look at the ways to make good investments, clearly a robotics platform that has truly platform effects could be used in many, many different applications,” Kukutai said. “We’re investors, right? At the end of the day, we’re trying to determine where we think there is a better investment opportunity, not just a cool technology.”
The world’s fleet of storage tanks for herbicides and insecticide sprays, Kukutai added, already presents a multibillion-dollar market for services that surpasses the current potential market for harvesting robots.
While Finistere remains interested in direct application of automation in agriculture, Kukutai said, the market for harvesting robots is not yet developed enough to allow one company to truly gain traction.
Labor costs and availability make harvesting a topic of chief concern for growers across categories, Kukutai explained, but most crops are not grown on large enough acreage to justify production costs of a single-purpose robot.
There have, however been significant investments in the sub-sector, Kukutai said, highlighting Yamaha’s Motor’s $8 million investment in New Zealand-headquartered apple-picker producer Robotics Plus last year; Google Venture’s participation in a 2017 $10 million funding round for Abundant Robotics, which also produces apple-pickers; and BASF’s contribution to a $10.5 million financing for ecoRobotix, which offers solar-powered robots capable of spraying unwanted plants with precision, among others.
Kukutai said, some of these investments have demonstrated that the ag robotics market has yet to fully mature.
“When you see probably the best-known quasi-robot exit in recent years – Blue River Technologies acquired by Deere – when Deere acquired them, did they keep focusing on lettuce?” Kukutai asked. “Not really, they are still developing high-value products and the bigger focus has now comes onto spraying massive-acreage row crops.”
Kukutai said the Invert Robotics investment – in which Finistere was joined by Yamaha Motor Ventures & Laboratory Silicon Valley and the New Zealand Venture Investment Fund, among others – demonstrates Finistere’s belief that rather than as a business vertical, agriculture is best understood horizontally as a set of markets capable of taking in influence from other industries.
“Agriculture is often taking advantage of other industries’ cost curves,” Kukutai added. “From biotech to data-storage, data science to materials and chemistry; every area of core technology that has driven innovation in every other sector turns up in agriculture. Including, not surprisingly, automation and robotics.”