100 Companies in Five Years is Tenn. Agriculture Industry Goal
An agricultural revolution is coming to Tennessee.
At least that’s the goal Ag Innovation Group in Memphis has set, in partnership with the Tennessee Department of Agriculture, through the formation of AgLaunch.
AgLaunch is a state-wide organization working to grow 100 agricultural companies in Tennessee throughout the next five years, Pete Nelson, CEO of Ag Innovation Group, said.
Jumping right in with the effort, the Knoxville Entrepreneur Center started AgWorks, a startup accelerator focused on agricultural companies. Throughout the 12-week program, the KEC provided general business expertise, while AgLaunch provided agriculture specific knowledge.
Fueling a $60 billion industry
There are approximately 66,000 full- or part-time farmers in Tennessee, Nelson said.
“It’s a $60 billion industry, but there’s basically little or no activity doing new things with innovation,” he said. “The goal with AgLaunch is to help build around that robust industry by adding new technology and innovation. The hope is we create companies and technologies that increase the profitability for farmers, lower the environmental impact of farm operations, create new markets, but also create more rural-urban connectivity.”
To do this, AgLaunch has set up venture capital funds and helping create accelerators like AgWorks.
Seeing Knoxville get involved so quickly is especially important to Nelson as AgLaunch works toward its goal because of the difference in agriculture East Tennessee has compared to West and Middle Tennessee.
“It just opens up a whole different set of agriculture and forestry companies,” Nelson said.
Unlike traditional startups, in which most investment capital is on the west or east coast, the agriculture industry is decentralized, Stephen Jenkins, KEC director of entrepreneurship, said. He said the presence of the University of Tennessee Institute of Agriculture and Oak Ridge National Laboratory makes Knoxville “especially primed” to generate and support new companies.
“We’re able to channel (energy from UT and ORNL), and with the agriculture community nearby, we can marry them, so products are validated faster and relationships are created faster,” Jenkins said.
A Ph.D. student turned entrepreneur
Grow Bioplastics, which creates 100 percent biodegradable plastics for farmers, participated in AgWorks. The company has participated in multiple startup accelerators and pitch competitions across the country, winning more than $130,000.
AgWorks was the first program the company found with an agricultural focus, Grow Bioplastics co-founder Tony Bova said.
“Other programs we’ve gone to have focused on businesses that are software or technology related, and things move fast,” Bova said. “But in ag, things move slower, and the expertise is much different, so we were pretty excited about having people that were specifically looking at the area we wanted to be in.”
Bova, a Ph.D. student at UT, believes AgLaunch at programs like AgWorks are a step in the right direction, comparing the future of the agriculture industry to past industrial revolutions.
“Other industrial revolutions that have helped society move to its next level have been the result of great partnerships between academia, government and industry, and in agriculture, the level of innovation has been there, but hasn’t seen the support from all three together to really say that we have a revolution,” he said. “There are a lot of great things coming. I think it’s just getting started.”
Bova sees research at UT and ORNL through his doctoral program that sometimes ends when it’s published.
“It takes great partnerships with industry, with tech transer and startups in general to bring those researched ideas out to the masses,” he said. “To me, it takes businesses to be able to do that.”
Completing the puzzle
Connecting with leaders in the agriculture industry is crucial for entrepreneurs like Bova, he said, calling people with great ideas “one piece of the puzzle.”
The puzzle is completed when those people have support from seasoned business leaders. Michael Whitt also participated in AgWorks. His company, Cattle Sync, is an app that will allow cattle farmers to enter information about the care of their herd and streamline the sales process digitally.
He said AgWorks was “huge” for his company.
“It helped me look at agriculture on a high level versus on a low level, which I’m used to,” he said. “The exposure to different opportunities for funding and to see how the investment piece works was very useful.”
Alex Adams’ company Geo Air also benefited from industry networking. Adams is working to lower the number of crops destroyed by mold. He said one-third of the world’s crops go bad because of mold. Looking at only corn crops, that equals approximately $20 billion in the U.S. and $260 million in Tennessee on average.
Geo Air uses drones to find mold in crops before it becomes a problem, using technology that identifies mold spores in the air before they ruin the crop. Existing technology uses imaging, which can only identify the problem after it has damaged the crop.
“There were a couple times where I was sitting there trying to think through an idea or trying to find the right person, but it would take me like two months to figure it out,” Adams said. “Then (during AgWorks) there were a couple days that ended up being a 10 minute conversation. It gave me a super big leap on developing my business.”
100 companies in five years
Lasting communication between companies and industry leaders is key to reaching AgLaunch’s goal, Nelson said. The mindset at KEC is representative of how Nelson sees the goal being met.
“We would hold (KEC) up as a model across the state, because they’re not competitive, they’re open-minded and smart,” he said. “They modeled all the behaviors that would be great if all of us had in terms of building a good cooperation.”
By next summer, Nelson hopes to have the startup’s products being tested in the field.