Why Syngenta acquired FarmShots: “It’s Definitely a Race”

Syngenta acquired remote sensing startup FarmShots in February, in the first publicized acquisition of an agtech startup in 2018 for a major strategic player in agriculture. Financial terms were undisclosed.

FarmShots uses high-resolution satellite and drone imagery to deliver plant health analyses and offers insight into field conditions based on patterns of light absorption. The startup raised a $1.1 million seed round from local investors in 2016.

Following the acquisition, FarmShots now operates under Syngenta’s digital portfolio as part of AgriEdge Excelsior, Syngenta’s US farm management system en route to the global marketplace.

We caught up with Dan Burdett, global head of digital agriculture at Syngenta to find out why the company decided to acquire FarmShots rather than partnering with the four-year-old startup and what other technologies Syngenta is eyeing in 2018.

Where is the line between investing in a company and acquiring it on the digital side?

I think we first have to decide if it is a capability that we need in our offer for our growers – does it bring some kind of incremental, differentiated value for our customers and is it something that we are going to build inside or is it something that is best built outside?

And then, it gets into how differentiated do we think the capability it is and therefore, the more differentiated our offer could be? And do we want to retain exclusivity on the tool via acquisition as opposed to partnering in a semi-exclusive way? In this case, we were very interested in the capability of the individuals beyond the software tool itself. These were really bright people with capabilities that we wanted to bring into our team so we were chasing the people as much as the software.

How did the introduction to FarmShots come about?

The guys that started FarmShots were being mentored by someone here at Syngenta who made the connection. We wanted to bring satellite imagery into our AgriEdge offer and so we were looking at different ways of doing that and this company had a really user-friendly, logical way of presenting satellite imagery that we liked. We like their approach and we were beginning to build a relationship so that we could get access to the technology through an API integration, but then as we got more involved, we just wanted to bring the whole thing inside the company.

Assuming that you shopped around for remote sensing capabilities, what did you see in FarmShots that you didn’t see elsewhere?

Innovation. Entrepreneurship. Trials. A can-do spirit – all in the digital space. They’re software developers, they’re engineers and they’re very, very bright. And we also just liked their “how” — we liked their style. We thought they would be a good partner within our internal team. We need that entrepreneurial spirit to push a big, steady company like Syngenta to help us think more into the future and to think bigger.

What is their new role within Syngenta?

It’s two-fold. There is a development team that they will help with development projects we have and there is certainly is a FarmShots go-to-market team that can help us build out the product, connect it to our current offerings, onboard some of the other territories around global Syngenta and get them up and running with imagery as part of the local offer. So its on-boarding and globalizing within Syngenta, and then they’ve also got a development function down the road.

Did AgriEdge contain any other remote sensing capabilities before this acquisition?

No this is the first one so it was needed. I think there are a number of tools that we will bring in and connect to AgriEdge as we learn more going forward. Everything we’ve done before has been APIs that we connect through third parties, so this is one of the first ones that we actually brought inside the company.

Do you think that acquiring new capabilities is going to become more common in the future?

I think that this space is moving really, really fast. As the big companies like Syngenta and our competitors see capability we’re going to want to bring it into our company through collaborations and partnerships, or through investments or acquisitions or all of the above. One of the big challenges that my group has is just to stay on top of the innovation landscape and make sure we have a line of sight on what our needs are and what the different capabilities are that are popping up around the globe.

What led to the realization that you needed to get remote sensing capability onto your platform?

One of the things that we’ve done is try to map all the processes that a grower has to deal with over the course of a year. We mapped where data flows in and around the farm and we mapped where money flows in and around the farm and one of the more laborious tasks for a farmer or an agronomist is scouting fields. The old way is literally walking up and down rows and looking at plants and imagery is one way that we can improve one of these on-farm processes. If we have a satellite image and the processing is working properly, we can see healthy plants and we can see problem spots which leads you to more efficient and effective scouting because then they’re able to use the image for the diagnostics or you can use the image to target your field scouting. Its a classic example of trying to understand the processes and the pain points and looking for a solution to bring efficiency.

Are there any other technologies that are high on your list for the coming year?

We’re trying to expand our farm management software footprint globally and there’s no question that data modeling is a big topic. The more we can use a variety of sensors to collect data and feed that into probability models, that really helps with decision-making support — so that’s where a lot of our focus is.

Are last year’s high profile acquisitions in the space creating a sense of urgency on the part of the large corporate players?

Absolutely. I definitely think it’s a race. It’s a race to bring digital capability. It’s a race to have the digital relationship with the grower. Whether its the price paid for Climate or the price paid for Granular, these things are getting everybody’s attention.

A few agtech startups have indicated that they plan to build standalone businesses. In all of your scouting, are you hearing that companies want to wait and not necessarily be acquired too quickly?

No, I’m actually hearing the opposite. I’m finding that a lot of these startups are having a tough go. They’re having a hard time getting traction in the market in a way that is sustainable so it benefits them to have a partnership with a company that’s already got an existing customer base and an existing channel.

We’ve had the AgriEdge offer in the US for about 18 years, so this is not a new space for us and we’ve got a pretty strong presence. AgriEdge is deployed on 17 million acres in the US. The grower loyalty is extremely high – better than 90% re-enrollment every year and it’s a significant part of the Syngenta sales in the US that go through this platform. This is not a new space for us. We really feel like we’re leading in this area and we’re pretty confident about where we are and where we’re going. We’re boldly looking at partnerships, collaborations, investments, and acquisition targets.