How Tennessee Plans to Become a Hotbed for Agtech Innovation
“Ag innovation and business creation have the potential to transform our rural economy more than anything else. We’ve got to be a player if we’re going to fully participate in the growing world demand for food, fuel and fiber. With this funding, we expect to incentivize private investment while making Tennessee a center for agricultural advancement,” said Tennessee Commissioner of Agriculture Julius Johnson in a press release announcing the state’s new initiative for agriculture technology entrepreneurs.
The state’s department of agriculture is launching a seed funding initiative called AgLaunch designed to put Tennessee on the map as a hub for agtech innovation and entrepreneurship. The department will invest $150,000 initially, alongside a further $70,000 from the U.S. Department of Agriculture, but the ultimate aim is to raise $10 million from the private sector to fund the program during its initial five year phase, according to Venture Tennessee Connections, a local business news site.
AgLaunch is being developed by Memphis Bioworks Foundation under the impetus of Governor Bill Haslam’s Rural Challenge, a 10-year strategy to expand the agricultural and forestry sectors of Tennessee’s economy, currently valued at $66 billion.
The initiative’s goal is to attract 200 entrepreneurs and establish 100 successful and investable agricultural-sector companies in Tennessee by 2020. According to the initiative’s website, ideal candidates for participation in the program are high-growth, investable companies in agriculture that encourage a culture of entrepreneurship within rural communities while focusing on strategic assets.
On August 20, 2015, entrepreneurs, investors, and government officials convened in West Tennessee to learn about the seed funding announcement.
“Venture capital investment in agriculture grew by 170 percent from 2013 to 2014 to $2.4 billion and is projected to have another large jump in 2015,” Memphis Bioworks’ president and executive director Steve Bares said in a recent press release, stating figures from AgFunder’s recent Midyear Report. “That investment is driving innovation-based startup companies to seek out locations like Tennessee. AgLaunch aims to draw those companies to the state, while also identifying and supporting locally-grown ideas from Tennessee’s farmers, entrepreneurs and universities.”
The foundation’s reputation for bringing entrepreneurs to the medical technology marketplace played a key part in state and federal agriculture leaders’ decision to tap the company for the initiative, according to the release.
Once the program is funded, which program leaders hopes to accomplish by July 2016, AgLaunch will set about achieving its four goals: expanding the state’s vertical agriculture market, integration with Launch Tennessee regional accelerators, promoting job growth in rural Tennessee, and operating as a key development component of a Rural Business Investment Company with USDA and Farm Credit Banks. This last goal could help AgLaunch secure as much as $40 million in early-stage investment capital for rural Tennessee.
Housed at the TDA offices, the program will also partner with the Tennessee Department of Economic and Community Development in addition to the University of Tennessee Institute of Agriculture, which is the state’s premier agricultural research institution.
Tennessee’s agriculture and forestry industry is valued at around $66 billion, with soybeans, corn, and livestock production representing the state’s largest agriculture commodities. With over 67,000 farming operations and close to 11 million acres of land dedicated to agriculture production, entrepreneurs participating in the program will have plenty of chances to collaborate with farm professionals and test their products in the field.