However, that news belied pessimism on the state of ag tech at the recent Agri Tech Venture Forum in Toronto. The forum heard that the availability of capital for agriculture technology entrepreneurs has dried up significantly compared to the heady days of investment growth during the pandemic years.

David Kornacki, of the Canadian Venture Capital Association, reported that agribusiness had a record year in 2023, with $273 million invested in 50 deals.

That compares to a decline of 34 per cent last year in venture capital deals outside of agriculture and a 50 per cent decline the year before.

Kornacki says the declines in 2023 and 2022 are a return to normal.

“If we’re taking out the pandemic years, we still saw a an increase of investment in comparison to 2019,” he says.

The sentiment from venture capital investors at the forum wasn’t as optimistic.

“It’s been a challenging probably 18 months in terms of putting together deals, finding lead investors, finding significant partners,” said Jonathon Goodkey, of the Business Development Bank of Canada (BDC).

Pitchbook, the industry go-to information source on investment deals, showed a decrease in North American agriculture venture capital investment in early 2024 compared to the high-spending times of 2021.

“I agree, it’s tough times,” says Louis Brown of Carrot Ventures.

Paige Addesi, of Yaletown, another venture capital company, however, said that some great businesses can be built in a downturn.

“This industry doesn’t just go away and founders building businesses at this point in time are quite resilient,” she says.

Concern about interest rates has been one of the biggest drivers of the decline in venture capital being spent, but the potential impact of increased taxation of capital gains passed in the recent federal government budget will also have a cooling impact on investment in Canada, says Kornacki.

Agriculture technology entrepreneurs have to work harder and will have to make sure they have an understanding of the company’s plan to develop and show a route to profit.

When ag tech founders find an investor, they will also find that the valuations put on companies aren’t as high as they were.

“We want our returns, and we don’t want to admit that we are worth less than we were two years ago,” says Artem Zemskov, who works for the Canadian office of the Radicle Growth fund.

Many valuations were high because the venture capital money was flowing freely and some people didn’t understand what they were paying for.

The venture capitalists on the panel at the forum agreed that there is a lot of money sitting in people’s accounts not being spent, and that will change at some point. For now, entrepreneurs will have to make sure they are more realistic about what to expect when looking for investors.

—John Greig is senior technology editor for Farmtario

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Farmers Edge, founded in 2005 in Pilot Mound, Man. by agronomists Wade Barnes and Curtis MacKinnon, has carved out a niche using field-centric data, artificial intelligence and its FarmCommand data management platform.

CEO Wade Barnes called it an exciting day during an online press conference Wednesday marking the event from the firm’s Winnipeg headquarters.

“It’s a transformational day for Farmers Edge and a huge change for all of agriculture as we see the digitization of the most important industry in the world,” Barnes said.

Barnes added that the company will use the new funding — totalling $125,001,000, based on 7,353,000 common shares issued at $17 per share — to build on its vision of digital farming.

“We’ll be scaling up our teams to grow the business,” he said. “We’ll also be developing new products.”

In many ways the IPO process represents the maturation of any company, he said, but added that it accomplished some specific things for Farmers Edge.

Most of the venture capital that’s been raised over the past few years has now been converted into shares, he noted.

“It leaves us with a really clean balance sheet, and lots of dry powder to go out and grow the business organically,” he said. “This is at a time when digital agriculture is growing rapidly.”

Responding to questions from financial journalists during the virtual question-and-answer session following company presentations, David Patrick, Farmers Edge’s chief financial officer, said interest was strong in the offering.

“Our underwriting partners told us there was about nine times the interest as there were available shares,” he said.

By 2 p.m. on the day of the IPO, share prices had already climbed to $19.64, rising $2.64 from the IPO price of $17 per share.

The company initially aimed to sell a 16 per cent stake with shares priced between $10 and $17 each, according to Feb. 9 sale documents.

National Bank of Canada and Canadian Imperial Bank of Commerce led a group of five investment banks on the IPO, and have an option to acquire an additional 15 per cent of the offering.

The company will trade on the TSX under the symbol FDGE.

— Gord Gilmour is editor of the Manitoba Co-operator in Winnipeg.

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“Over the coming months, we will invest in early-stage companies with the potential to transform the food and agriculture industries,” CEO Ian McIntosh said in a statement Wednesday.

The venture capital initiative, called LDC Innovations, will be part of LDC’s innovation and downstream division. The group said it was too early to comment on the potential budget of the unit.

Dreyfus is the “D” of the so-called ‘ABCD’ quartet of global commodity traders that includes Archer Daniels Midland, Bunge and Cargill.

Like its peers, it has been looking further down the food chain in response to declining profits in trading and shipping crops. The company last year made a deal to sell its grain elevators in Western Canada to Winnipeg agrifood firm Parrish and Heimbecker.

LDC is also considering bringing outside investors into the family-controlled group.

LDC Innovations will be led by Max Clegg, who has held business development and innovation roles at the group in North America since 2012.

The overall innovation and downstream business will be headed by Thomas Couteaudier, who will assume the role in addition to his existing responsibilities as head of South and Southeast Asia Region, LDC said.

The company later confirmed that its current innovation chief Kristen Eshak Weldon is to leave the group at the end of this month.

Weldon had joined LDC in January 2019 to take up the newly created innovation role after previously working at private equity firm Blackstone.

— Reporting for Reuters by Gus Trompiz and Sudip Kar-Gupta.

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Finance Minister Greg Dewar’s plan calls for an expansion of the province’s small business venture capital tax credit, broadening its list of eligible businesses to include “non-traditional farming” ventures, as well as brew pubs.

The budget also doubles the maximum number of employees for businesses eligible for the tax credit, to 100 people, bringing it in line with Industry Canada’s definition of “small business,” the province said.

Dewar’s budget also expands the province’s green energy equipment tax credit, which previously offered tax credits of up to 15 and 10 per cent on businesses’ purchases of geothermal and solar thermal heating equipment, respectively.

The expansion calls for a credit of up to 15 per cent on purchases of biomass fuel energy equipment, if installed in Manitoba and used in a business.

The budget also sets up a three-year extension of the province’s nutrient management tax credit, a 10 per cent refundable tax credit for farmers and corporations buying prescribed nutrient management equipment “designed to meet Manitoba water quality standards.”

The nutrient management credit, set to expire at the end of this year, will now run until the end of 2018.

The budget also increases the income limit for businesses eligible for Manitoba’s small business deduction to $450,000, up $25,000, starting Jan. 1, 2016. Canadian-controlled private corporations that qualify for the province’s small business deduction pay a zero per cent rate of Manitoba corporation income tax.

The budget also doubles the period during which unused provincial scientific research and development (SR+ED) tax credits can be carried forward after they are earned, to 20 years.

On matters of food security, the budget also calls for development of a new retail food subsidy to offset the costs of “healthy foods” in 10 of Manitoba’s most remote communities.

The subsidy, the province said, “will complement Manitoba’s promotion of local food social enterprise development in northern communities.”

In all, the budget calls for a $422 million deficit for 2015-16, with revenue projected to increase $179 million or 1.2 per cent from the 2014-15 forecast, and expenditures up $289 million (1.9 per cent) from the 2014-15 forecast. — AGCanada.com Network

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Winnipeg-based Farmers Edge is one of a number of companies hoping to profit from new technology by packaging data solutions for farmers.

Monsanto, for example, late last year purchased The Climate Corporation last year to provide better data solutions to farmers. Farm machinery dealer chain Rocky Mountain Equipment last week announced an alliance with Decisive Farming.

Many companies are offering variable rate fertilizer technology, telematics packages to help farmers manage fleets of machinery, satellite imagery during the growing season and localized weather information. Farmers Edge is packaging all of these services, along with soil testing.

“We’re combining everything to give farmers a total solution,” says Farmers Edge CEO Wade Barnes.

Farmers are keeping a close eye on input prices as commodity prices fall — but Barnes doesn’t believe that will be a hurdle for Farmers Edge. The company hopes to gain market share and increase its profits by offering a lower price point.

For Prairie farmers, the price of Farmers Edge’s full-service bundle has fallen from $8.95 last year to $3.95 per acre for next year’s growing season.

During its pre-investment investigation of the company, Kleiner Perkins interviewed several Farmers Edge clients and found that many were not using the service across their entire farms. Farmers Edge hopes that farmers will pay to cover more acres at this lower price, and that farmers on the verge of adopting precision agriculture will get on board.

“In order to get mass adoption,” Barnes said, “the price point has to be where it becomes a no-brainer.”

Farmers Edge has invested in a software development company and a research and development centre. The company “is leading the current disruption around how crops are grown, and ultimately how crops are valued, as traceability becomes an increasingly important factor in the food supply chain,” Kleiner Perkins partner Brook Porter said in a release.

Farmers Edge has also been expanding into the U.S. and plans to use some of the Kleiner Perkins investment to finance expansion into Australia.

— Leeann Minogue is editor of Grainews at Griffin, Sask.

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