Cubiburu controls the gate directing lambs to the
pen or a transport truck on Oct. 7, 2014 at Burns
Farm in Stockton, Calif. Silicon Valley investors
have been pouring millions of dollars into the
sustainable agricultural movement. Farming is
showing to be a more stable investment than
volatile tech stocks, plus it's good for the...
Calif. ó Investors and entrepreneurs behind some of
the worldís newest industries have started to put
their money and tech talents into farming ó the worldís
oldest industry ó with an audacious agenda: to make
sure there is enough food for the 10 billion people
expected to inhabit the planet by 2100, do it without
destroying the world and make a pretty penny along the
Valley is pushing its way into every stage of the
food-growing process, from tech tycoons buying up
farmland to startups selling robots that work the fields
to hackathons dedicated to building the next farming
food sector is wasteful and inefficient," said Ali
Partovi, a Bay Area investor with large stakes in
sustainable agriculture startups. "Silicon Valley
has a hubris that says, ĎThatís stupid. Letís
booming activity around the so-called "ag-tech"
sector has led experts to predict that its growth, in
terms of the number of new startups and venture capital
investments, will in another five or so years outpace
todayís hottest technologies. In the third quarter
this year, venture capitalists and private equity firms
invested $269 million into 41 deals in agriculture and
food startups, the highest dollar amount ever in that
sector and double the amount invested during the third
quarter last year, according to data from the Cleantech
Group. Since 2009, investments into this sector have
grown an average 63 percent every year.
going to be bigger than cloud software, itís going to
be bigger than Big Data, because everybody eats,"
said Paul Matteucci, a partner with U.S. Venture
Partners and founder of Feeding 10 Billion, a nonprofit
center to help ag-tech entrepreneurs. "And itís
going to be completely entrepreneur led."
of companies are creating technology to make farmland
more productive and farming more efficient, using robots
to trim lettuce or software to calculate grass
production for cattle grazing. Others are tapping
technology to find substitutes for meat, cheese and
eggs, so less land is used to raise livestock, fewer
greenhouse gas-spewing trucks are used to transport
them, and fewer animals are subject to inhumane
slaughter. VCs have propped up startups such as Hampton
Creek, which sells mayonnaise and cookies that use plant
products instead of eggs, and Impossible Foods, a
Redwood City company making hamburgers and cheese
without meat or dairy.
Silicon Valley isnít just making technology for farms.
Some of its highest-profile investors are buying
farmland to have a hand in how farmers work their fields
and influence the type of food thatís available for
future generations. San Francisco-based Farmland LP,
which buys farms and converts them into organic pasture
that crop farmers and cattle and sheep ranchers share,
has attracted some of the valleyís wealthiest
investors, including Partovi, early PayPal investor and
entrepreneur Scott Banister and former Facebook and
Zynga executive Owen Van Natta. But the draw is more
than a happy vision of free-roaming cows ó many
investors see farmland as a safe investment to balance
volatile tech investments.
for the most part, have welcomed Silicon Valley techies
into their world of planting seasons and water woes.
From Salinas to Fresno to Tracy, California farmers are
increasingly tech-minded, running their fields from
iPads and tracking soil moisture and nitrogen levels
with cloud software programs, and they are hungry for
more tech solutions that will bolster their landís
productivity and their bank balance.
is a kind of renaissance in technology in agriculture
right now," said Ryan Jacobsen, a farmer and
executive director of the Fresno County Farm Bureau.
"The technology is becoming more mainstream because
more and more people believe that it will help them
produce more. These technologies actually do make a
difference on your bottom line. Itís an exciting time
to be a farmer right now."
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many ways, agriculture is an industry ripe for a Silicon
Valley shake-up ó farms were historically on the
forefront of manufacturing innovation, and farmers have
long embraced new technology. But farmers and tech
startups, living in separate worlds with very different
financial resources and cultures, have only recently
seen each other as an asset because of a number of
economic, tech and social factors that collided in the
last few years.
the recession, California agriculture remained one of
the only bright spots in the stateís floundering
economy, and while housing prices tanked, farmland value
increased ó and investors noticed. With heightened
attention to the stateís three-year drought, climate
change and the worldís swelling population, the
prospect of food shortages has become a more imminent
problem, grabbing the attention of entrepreneurs who
want to build something other than yet another social
media app. Meanwhile, technology got cheaper so more
small- and medium-size farmers could buy it.
a good idea takes hold and everyone wakes up at
once," said Roger Royse, a Palo-Alto based attorney
and founder of the newly launched Royse Law Ag Tech
incubator. "It just took a while for Silicon Valley
to wake up. I mean, itís not as sexy as some of the
other things you hear about; itís not the sharing
turning point came in 2013 when Monsanto, one of the
largest suppliers of herbicides and genetically modified
seeds, bought San Francisco-based weather data and
insurance startup Climate Corporation, which was started
by ex-Google employees, for $930 million.
was an aha moment," said Rob Trice, a 14-year
venture capitalist in Menlo Park who founded the Mixing
Bowl, a hub of ag-tech thinkers and entrepreneurs.
"Here was one of the largest ag companies buying an
IT company in Silicon Valley."
became clear, he said, that farmers and tech startups
could serve each other well. Blue River Technology in
Sunnyvale has created a machine that uses digital
imaging and powerful software to trim lettuce 100-times
faster than people. Farms that use the machine, which
include the Foxy lettuce brand, have increased their
yields by 10 percent, said CEO and co-founder Jorge
Heraud. The company raised $10 million this year from VC
these machines have replaced human labor, said Heraud,
some migrant workers will have to find new jobs. Thatís
one of the pitfalls ó as more technology is introduced
to farming, jobs will be cut. That could deter
immigration to places like the Central Valley, which
makes much of the nationís food on the backs of
migrant workers and has already seen a labor shortage
due to U.S. economic problems and the crackdown on
task of automation has always been about doing the jobs
that humans do," Heraud said. "There will be
jobs cost (but) society generally benefits when
productivity is increased."
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farm productivity is also the goal of Farmland LP, a
private equity fund that owns and manages about 7,000
acres of farmland in Oregon and California. The land is
rented to farmers, who rotate a diverse group of crops
and livestock so the land is never depleted and
generates revenue every season. At Burns Farm, a
4,240-acre farm in Tracy, one of Farmlandís newer
projects, a special clover and grass mix that Farmland
scientists planted helped Florence Cubiburu raise some
of her plumpest lambs in years, she said during this
newspaperís trip to the farm last month
was a little bit skeptical," Cubiburu, who owns
Cubiburu Livestock, said of Farmlandís approach. But
"our lambs had plenty of weight gain. This land is
really productive now."
Farmland LP investors say they get roughly an 8 percent
return; a fraction of what theyíd get from hot tech
stocks, but farmland isnít at risk of shutting its
doors when the next tech fad rolls through.
is more of a safe way to invest your savings,"
Partovi said. "Farmland isnít going to disappear.
Dropbox could disappear." Partovi is an early
experts, however, worry that deep-pocketed investors
will hasten the uprooting of longtime family farmers and
gut rural economies, which have already been hit hard by
the growth of big ag and urban development.
middle-sized guys are being squeezed out and thatís
very concerning to us," said Chandler Goule, senior
vice president of projects at the National Farmers
the number of startups focused on easing the
environmental impact of ag practices and improving
animal welfare is growing. San Francisco-based Hampton
Creek, which raised $23 million earlier this year, has
studied some 6,000 plants to find replacements for
animal products used in popular prepared foods. Experts
say reducing the quantity of animals raised for food
could also reduce outbreaks off food-borne illnesses,
which spread easily when many animals are slaughtered
together, and the use of antibiotics and hormones used
to increase food production.
definitely donít think that agriculture is bad,"
said Josh Tetrick, Hampton Creek founder and chief
executive. "There are things in the system that are
radically misaligned with farmersí values. Usually the
food that most people buy thatís really cheap is
really bad for the body and the land. We imagined a
world that was exactly the opposite."