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Originally published December 17, 2014 at 6:37 PM | Page modified December 18, 2014 at 6:32 PM

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Tech investors plowing money into future farms

Silicon 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 app.


San Jose Mercury News (TNS)

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TRACY, Calif. — Investors and entrepreneurs behind some of the world’s newest industries have started to put their money and tech talents into farming — the world’s oldest industry — 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 way.

Silicon 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 app.

“The 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, ‘That’s stupid. Let’s change it.’ ”

The 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 today’s 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.

“It’s going to be bigger than cloud software, it’s 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 it’s going to be completely entrepreneur led.”

Dozens 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 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 company making hamburgers and cheese without meat or dairy.

And Silicon Valley isn’t 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 that’s available for future generations.

San Francisco-based Farmland, which buys farms and converts them into organic pasture that crop farmers and cattle and sheep ranchers share, has attracted some of the valley’s wealthiest investors, including Partovi, early PayPal investor and entrepreneur Scott Banister and former Facebook and Zynga executive Owen Van Natta.

Farmers, 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 land’s productivity and their bank balance.

“There 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. It’s an exciting time to be a farmer right now.”

“Sometimes a good idea takes hold and everyone wakes up at once,” said Roger Royse, a Palo Alto 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, it’s not as sexy as some of the other things you hear about; it’s not the ‘sharing’ economy.”

Another 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.

“That 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.”

Improving farm productivity is also the goal of Farmland, 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 Farmland’s 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 last month

“I was a little bit skeptical,” Cubiburu, who owns Cubiburu Livestock, said of Farmland’s approach.

But “our lambs had plenty of weight gain. This land is really productive now.”



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