Agroop
Agroop is developing a edaphoclimatic machine learning system based in two disruptive products.
- Location
- Óbidos, Portugal
Categories: SaaS/PaaS Digital B2B
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Investment
sought: - €75,008
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Equity
offered: - 4.45%
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Investment
amount: - €97,755
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Valuation
(pre-money): - €1,611,215
Idea
Introduction
Agroop's main mission is to build an edaphoclimatic machine learning system that works as a support for decision-making and helps farmers pinpoint several agronomic, technical and meteorological indicators that can contribute heavily to cost reduction and to an increase in productivity, by improving operational procedures as well as saving essential resources, like water and energy.
This solution will be built upon two integrated products, both with what we believe is high scalability and internationalization potential: “Agroop Operational” and “Stoock”.
“Agroop Operational” is a multi-device farm management platform that allows users to calculate intuitively and assertively, the cost of production allowing detailed and decoded analysis.
“Stoock” is an off-the-shelf multi sensor which replaces the traditional weather station and allows its users to monitor and optimize the water needs of crops, minimizing water waste.
Intended impact
According to UNFPA (United Nation Population Fund) in 2050 the world population will reach 9 billion, therefore an increase of food requirements of 70% is expected in the next 35 years. This means the farming sector will be under a lot of pressure to provide enough food for such a large population. Additionally according to the UNFAO (Food and Agriculture Organization of the United Nations) global warming will have a huge impact on the water resources available for food production, making water an ever more precious resource.
Bearing in mind the macro factors mentioned above, farming entrepreneurs will inevitably have to increase the quality and quantity of their production while at the same time reducing the demands on the usage of water and energy resources. In that regard, we believe technology will play a fundamental role by providing solutions to these issues. And that is what Agroop sets out to do.
With the Agroop system in place a farmer will be able, on one hand, to find out where he can reduce production costs and increase profitability and on the other hand reduce significantly the costs associated with irrigation (water and energy). According to data gathered a 15% reduction in the costs of production related to energy can be attained, even reaching 25% with certain crops.
Both products, due to Agroop’s business model, should be accessible to a large number of small and medium farmers (70% of all farms in Europe) and because of this, we aim to contribute to the democratization of technology in the agricultural sector and help those farmers compete at a global level, with bigger and economically more powerful farms.
Substantial accomplishments to date
Agroop, thanks to its innovative potential, has been systematically selected as finalist in some of the most relevant entrepreneurship prizes.
We highlight our third place in the EDP Innovation Award 2015, which has assured us the support and participation in the entrepeurnship ecossystem of one of the biggest nacional companies: EDP (www.edpstarter.com).
Nonetheless, our greatest achievement to date was when we got our first paying costumer on the 27th of January 2016.
Our amazing team is also a huge achievement, since it is comprised of very driven people, with great technical and human capabilities.
Monetisation strategy
“Agroop Operational” will be sold under a Software as a Service (SaaS) model with an average monthly fee of 35.65€ (excl. VAT), composed of 4 plans:
“Stoock” will be sold at 1.400€ + VAT and will functionally complement “Agroop Operational” while contributing to the increase of the average price point. That occurs because only the Premium Plan will allow the integration with “Stoock” sensors.
Use of proceeds
Since the beginning of this year, Agroop Operational is developed, deployed and already has paying customers. The proceeds of the campaign will be used on the commercialization of this product in the Portuguese market and to develop Stoock.
We will also continue to develop Agroop Operational with interfaces for technicians and agronomists who advise and monitor farmers, to centralize their costumers’ and associates’ data. We will also continue to research and look for leads in our target markets, where we currently have partners: Brazil, Ireland, Norway and Sweden. We are translating our platform to various languages and establishing contacts and relationships with agricultural stakeholders in each country.
2016 will be the year of the consolidation of our product, commercial processes and the preparation for international expansion.
In 2017, after field tests and validation, we will produce Stoock and begin the international launch process of the two products in the target markets.
Market
Target market
Agroop has in its international pipeline 8 target markets: Portugal, Spain, France, Germany, Ireland, Norway, Sweden and Brazil.
Spain, due to its geographic and cultural proximity with Portugal, will be the preferential market to expand internationally, followed by Ireland, Norway and Sweden, where we currently have potential partners. Brazil, despite its huge potential, shall be the last market within our five-year roadmap due to its current economic context.
Characteristics of target market
Agroop's target customers are 46 year old and younger farmers who dedicate themselves full-time to agriculture. We believe that these farmers are more inclined to use new technologies and are aware of the importance and impact of efficient and assertive management.
Using EUROSTAT and IBGD data, we estimate that in these 8 countries, there are about 8 million farmers within that category and the total market volume is about 5.5 billion euros.
Our initial focus lies on the European market where the average farm is about 14,4 ha (Agroop's target farm size) and where trade barriers are low.
Marketing strategy
Our sales strategy will be based on digital marketing, in order to attract leads. For each country, we’ll have one account manager and a commercial desk that will follow-up every lead, by email, phone, and in some cases in person.
Each account manager will contact producer associations, cooperatives and consultancy firms, in order to show our product to multiple farmers in group sessions and to negotiate sales commissions with the entities that are interested in partnering with us. We believe this is the path of least resistance to sell our products since it leverages existing relationships between our potential clients and those entities.
We will seek out partnerships with universities and training entities to make Agroop Operational available to students and trainees.
Agricultural tradeshows will also be an essential element of our marketing strategy: We will engage in guerrilla marketing that creates an impact. Our presence in conventions and farmers’ meetings will be a preferred communication channel.
Another strategy we are considering is creating a mini app of Agroop Operational for technicians and agronomists who monitor and assist farmers. This app will allow these agents to centralize the data of their clients and associates and with that, create value and hopefully a sales a force for Agroop Operational, among people who already have established relationships with farmers.
Similarly to Portugal, we intend to create a commissioner team (see photo) comprised of specialists in agriculture who can represent us in person and enhance the buzz and awareness of our brand in our target markets.
Competition strategy
Besides Wisecrop (another Portuguese startup), we did not identify any direct competitors with an integrated management and monitor solution. However, when breaking down each one of Agroop's products, “Agroop Operational” faces competiton from ISAGRI, AgroGestão, Agrivi and AgSquared. And “Stoock’s”, main competitors are CropX, Farmdog and Hidrosoph.
“Agroop Operational” and “Stoock” have individually strong selling points, but we have found them to be uniquely strong when both solutions are integrated in a single interface and system.
Currently, farmers use management platforms and monitoring systems that are developed by different companies and, because of this, in our experience they have no ability to easily process and share information generating indicators to support their decisions in a meaningful way.
Wisecrop has also identified that opportunity but, unlike Agroop and its products, we have found that Wisecrop uses sensors provided by other suppliers and weather stations which, due to the structure and complexity of the devices, have limited scalability potential, narrowing the potential use of the system.
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