Vultus aims to reduce 40% of fertiliser usage with global satellite analysis to prescribe correct levels.
|Sectors||Data & Analytics Digital Mixed B2B/B2C|
|Incorporation date||31 Aug 2016|
Today, farmers guesstimate the dosage of critical inputs and spread them evenly across the field, despite huge variation within fields. This leads to large inefficiencies, for example up to 40% (sometimes up to 60%) of nitrogen often goes to waste, leading to yield losses and environmental degradation.
Vultus, uses satellite data to give farmers actionable recommendations about nutrient need and varying conditions within the field. The main Nitrogen product would be aiming to reduce Nitrogen waste by 40% and help increase yields. Vultus allows the farmer to efficiently apply inputs and eliminate their waste, saving the average farmer over £13,000 per year.
Our product includes an API, that we can be configured onto Farm Management Systems (FMS). FMS platforms are used by farmers to manage operations, inventories and accounting online. Our API plugs into the FMS as an additional service the farmer may pay for.
Vultus was founded with the mission of eliminating waste in farming. After working closely with farmers, we realised the scope and scale of agricultural waste, and sought to make a positive impact by applying cutting edge remote sensing and image analysis technologies to reduce the biggest agricultural pollutant, nitrogen.
Nitrogen is the most used fertiliser and one of the worlds most prominent and potent pollutant, with up to 40 - 60% of nitrogen fertilisers going to waste. This is causing huge emissions of the greenhouse gas Nitrous Oxide. Over 7% of Sweden's total CO2 equivalent emissions are from agriculture. Furthermore, a large amount of nitrogen leaches out into lakes and rivers, causing eutrophication, toxic algae blooms and acidification. This hurts biological diversity and makes recreational areas and drinking water unusable.
With Vultus, save up to 40% of nitrogen and gain around £50 per hectare. This drastically reduces environmental harm whilst improving the farmers profitability.
Substantial accomplishments to date
So far, we have:
Completed our second version of the processing pipeline with API integration.
Developed our nitrogen model and has demonstrated it at real farms in Sweden.
Established international partnerships with 4 Farm Management Systems.
Several FMS lined up in our marketing pipeline.
Progress in the last 15 months includes:
£208,000 Project funding awarded.
30 Articles published about Vultus.
Numerous competition prizes won with over £17,000 awarded.
Sep 2016 Vultus was founded.
Nov 2016 Barcamper Competition - 2nd place.
Dec 2016 International Growth Award by Start-up Sweden.
Jan 2017 Pre-seed funding (400k Swedish Krona).
Mar 2017 Accepted into Fast Track Malmö (top 5 out of 460 applicants).
Apr 2017 First successful fertiliser prescription.
May 2017 Won Venture Cup South.
Jul 2017 Swedish crop insurance provider as a customer.
Sep 2017 Join Climate KIC Accelerator and awarded funding grants.
Nov 2017 SKAPA - 1st Place, Sweden's largest innovation prize.
Dec 2017 Slush top 10.
The analysis is distributed through Farm Management Systems (FMS), who plug our API on their platform to give their customers access to the analysis. The farmer uses the FMS to manage their day to day operations, inventories, accounting and legalities. The platforms have strong usage at medium and large farms.
The final customer is the farmer, who will pay £5 per hectare per year for the analysis. The FMS will take a royalty fee for the distribution of the analysis, from the £5 per hectare. With our prescriptions, the farmer can increase yield and quality of the crop, whilst decreasing costs of fertilisers and harvesting issues. According to our own calculations based on government estimates, the gain is £55 per hectare, (yield increase - £42, harvest cost reduction - £13).
We reach out directly to FMS companies in order to establish and hopefully build lasting partnerships. With existing partnerships we have reached a global market with presence in Russia, U.K, Ukraine, India and South Africa
Use of proceeds
The proceeds will be used over the next 18 months to reach key business milestones and propel Vultus as a global leader within Nitrogen recommendations. 45% of the funding will go towards Market development, 35% towards further development and 20% towards operations and support.
Market development 50%
Goal: Reach multi-million revenues and operate in 5 countries by 2019.
Primary cost: Wage costs for partnership management.
Secondary costs: Marketing material, events, digital ads.
Development - 35%
Goal: Add a tractor prescription module, add a weather module.
Primary cost: Wage cost.
Secondary cost: Software licences and hardware.
Operations and support 15%
Goal: Maintain excellent customer support and operational ease.
Primary cost: Wage costs for customer support and maintenance.
Secondary costs: Server costs and overheads.
Please note, Vultus has an outstanding convertible note, which it has elected to repay. The total amount to be repaid will be 300,000 SEK (circa £€28,000). The convertible will be repaid at a rate calculated as 5% of yearly revenues. Whilst the intention is for the company to repay the note, this could change in future, resulting in dilution to existing shareholders.
We are targeting medium (100+ hectares) and larger farms (500+ hectares) across Europe that grow cereal and canola crops. We feel this segment is also likely to be the largest adopter of Farm Management Systems and precision agriculture practices. Current focus markets are Russia, Ukraine, UK, Germany and France, where we have estimated the market size at £995m. We will continue applying our model towards markets in the southern hemisphere, specifically targeting Brazil and Australia. We believe that through a few key partnerships in each market, we can realistically reach a significant portion of each target market.
Our ambition is to diversify our key offering, by combating waste of other inputs, such as pesticides, phosphorus and potassium. An increase in analysis services will allow us to target additional market segments and reach an even larger market.
Characteristics of target market
The target markets are characterized by heavily industrialized and large farms that have adopted GPS and Farm Management Systems (FMS).
For us, a key enabling technology in the ag-tech revolution is the proliferation of GPS technology, which can be a critical factor in automatic adjustment of inputs. In medium and large farms, almost all tractors have GPS. Even the centimetre accuracy RTK GPS that enables autosteer, is available on 83% of tractors in the US in 2015, up from 6% in 2005. This sudden shift is enabling huge advancements in precision farming.
Connected to the digitisation of farming, FMS companies have seen enormous growth and usage. In our view, we feel that the FMS market is fragmented and locally adjusted. Due to the high usage of the FMS platforms and what we have seen as the limited ability to develop deep analysis, we predict the shift of analysis providers moving towards API services on top of FMS platforms. Vultus hope to be a pioneer in this transition.
Farm Management Systems (FMS) reach out to thousands of technologically proficient farmers with millions of hectares under management. In our view, most FMS companies do so in a highly efficient manner due to local adjustments and connections to the local market. Vultus offering is horizontally applicable across geographical regions, so through the partnership with FMS the analysis is sold in a locally optimised way if the FMS is sold in this manner too.
We feel that the incentive for the FMS companies to distribute our product is threefold. Firstly, our analysis is a way for them to differentiate their offering in the highly competitive FMS space. Secondly, the royalty they receive should improve their ability to monetise their system. Thirdly, by coupling the FMS with additional analysis, the platform may gain heavier usage and higher retention. For these reasons, there is interest from the FMS to integrate our analysis, as well as distribute it towards its client base.
Our business is focused on the niche of nitrogen recommendations for two kinds of commodity crops (cereals and canola), and in our view not directly comparable to rice, soybean or corn, reducing competition from American corn focused companies. Furthermore, our nitrogen models differentiate us from pure monitoring companies that only deliver oversight data. In our view, our two biggest competitors are Airinov and Yara.
Drone based system for farm advisers. We believe that their product is expensive and very difficult to scale. In our opinion, this type of solution is likely to be out-competed by satellite due to price and data quality.
Tractor mounted expensive sensor. Sold 200 units in Sweden over 15 years. A side project of Yara (a chemicals company). They generally have a strong marketing presence, althoughwe believe it requires more upkeep and configuration, in addition to the hefty price of €20-€40,000.