Pale Blue Dot, a newly outed European venture capital firm focused on climate tech, announced this week the first closing of its debut fund at €53 million.
Targeting pre-seed and seed stage startups, the firm says it will consider software and technology investments with a strong positive climate impact. Current areas of focus include food/agriculture, industry, fashion/apparel, energy and transportation, with plans to back up to 40 companies out of fund one.
Founding partners Hampus Jakobsson, Heidi Lindvall and Joel Larsson are stalwarts of the Nordic tech ecosystem and beyond: Jakobsson co-founded TAT (The Astonishing Tribe), which was sold to Blackberry in 2012, and is a prominent angel investor in Europe, most recently a venture partner at BlueYard Capital . Lindvall is the former head of accelerator and investment team at Fast Track Malmö, with a background in human rights and media. Larsson was previously managing director at Fast Track Malmö, with a technical background and prior fund management experience.
I put questions to all three, delving deeper into Pale Blue Dot’s remit and the firm’s investment thesis. We also discussed the macro trends that warrant a fund specializing in climate tech and why Europe is poised to become a leader in the space.
Pale Blue Dot is a new VC fund specializing in climate tech, but in a sense — and to varying degrees — isn’t every venture capital fund a climate tech fund these days?
Heidi Lindvall: We think all funds should be “planet-positive” and working for a better world, but it will take time until it is a focus. Still, most funds look at a potential positive impact late in their assessment and will not decline the deal if the startups wouldn’t be significantly pulling the world in a good direction.
Hampus Jakobsson: Focus has both upsides and downsides.
The negative part with being niche is that we won’t do investments in amazing people or startups that we don’t think are “climate-contributing enough” or that the founders aren’t doing it in a genuine way (as the risk of them to paying attention to the impact might lead them to become a noncontributing company).
Apollo Agriculture believes it can attain profits by helping Kenya’s smallholder farmers maximize theirs.
That’s the mission of the Nairobi based startup that raised $6 million in Series A funding led by Anthemis.
Founded in 2016, Apollo Agriculture offers a mobile based product suit for farmers that includes working capital, data analysis for higher crop yields, and options to purchase key inputs and equipment.
“It’s everything a farmer needs to succeed. It’s the seeds and fertilizer they need to plant, the advice they need to manage that product over the course of the season. The insurance they need to protect themselves in case of a bad year…and then ultimately, the financing,” Apollo Agriculture CEO Eli Pollak told TechCrunch on a call.
Apollo’s addressable market includes the many smallholder farmers across Kenya’s population of 53 million. The problem it’s helping them solve is a lack of access to the tech and resources to achieve better results on their plots.
The startup has engineered its own app, platform and outreach program to connect with Kenya’s farmers. Apollo uses M-Pesa mobile money, machine learning and satellite data to guide the credit and products it offers them.
Apollo Agriculture co-founders Benjamin Njenga and Eli Pollack
Apollo Agriculture generates revenues on the sale of farm products and earning margins on financing. “The farm pays a fixed price for the package, which comes due at harvest…that includes everything and there’s no hidden fees,” said Pollak.
On deploying the $6 million in Series A financing, “It’s really about continuing to invest in growth. We feel like we’ve got a great product. We’ve got great reviews by customers and want to just keep scaling it,” he said. That means hiring, investing in Apollo’s tech, and growing the startup’s sales and marketing efforts.
“Number two is really strengthening our balance sheet to be able to continue raising the working capital that we need to lend to customers,” Pollak said.
For the moment, expansion in Africa beyond Kenya is in the cards but not in the near-term. “That’s absolutely on the roadmap,” said Pollak. “But like all businesses, everything is a bit in flux right now. So some of our plans for immediate expansion are on a temporary pause as we wait to see things shake out with with COVID.”
Apollo Agriculture’s drive to boost the output and earnings of Africa’s smallholder farmers is born out of the common interests of its co-founders.
Pollak is an American who who studied engineering at Stanford University and went to work in agronomy in the U.S. with The Climate Corporation. “That was how I got excited about Apollo. I would look at other markets and say “wow, they’re farming 20% more acres of maize, or corn across Africa but farmers are producing dramatically less than U.S. farmers,” said Pollak.
Pollak’s colleague, Benjamin Njenga, found inspiration in his experience in his upbringing. “I grew up on a farm in a Kenyan village. My mother, a smallholder farmer, used to plant with low quality seeds and no fertilizer and harvested only five bags per acre each year,” he told the audience at Startup Battlefield in Africa in Lagos in 2018.
Image Credits: Apollo Agriculture
“We knew if she’d used fertilizer and hybrid seeds her production would double, making it easier to pay my school fees.” Njenga went on to explain that she couldn’t access the credit to buy those tools, which prompted the motivation for Apollo Agriculture.
Anthemis Exponential Ventures’ Vica Manos confirmed its lead on Apollo’s latest raise. The UK based VC firm — which invests mostly in the Europe and the U.S. — has also backed South African fintech company Jumo and will continue to consider investments in African startups, Manos told TechCrunch.
Additional investors in Apollo Agriculture’s Series A round included Accion Venture Lab, Leaps by Bayer, and Flourish Ventures.
While agriculture is the leading employer in Africa, it hasn’t attracted the same attention from venture firms or founders as fintech, logistics, or e-commerce. The continent’s agtech startups lagged those sectors in investment, according to Disrupt Africa and WeeTracker’s 2019 funding reports.
Some notable agtech ventures that have gained VC include Nigeria’s Farmcrowdy, Hello Tractor — which has partnered with IBM — and Twiga Foods, a Goldman backed B2B agriculture supply chain startup based in Nairobi.
On whether Apollo Agriculture sees Twiga as a competitor, CEO Eli Pollak suggested collaboration. “Twiga could be a company that in the future we could potential partner with,” he said.
“We’re partnering with farmers to produce lots of high quality crops, and they could potentially be a great partner in helping those farmers access stable prices for those…yields.”
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Farming is one of the oldest professions, but today those amber waves of grain (and soy) are a test bed for sophisticated robotic solutions to problems farmers have had for millennia. Learn about the cutting edge (sometimes literally) of agricultural robots at TC Sessions: Robotics+AI on March 3 with the founders of Traptic, Pyka, and Farmwise.
Traptic, and its co-founder and CEO Lewis Anderson, you may remember from Disrupt SF 2019, where it was a finalist in the Startup Battlefield. The company has developed a robotic berry picker that identifies ripe strawberries and plucks them off the plants with a gentle grip. It could be the beginning of a new automated era for the fruit industry, which is decades behind grains and other crops when it comes to machine-based harvesting.
Farmwise has a job that’s equally delicate yet involves rough treatment of the plants — weeding. Its towering machine trundles along rows of crops, using computer vision to locate and remove invasive plants, working 24/7, 365 days a year. CEO Sebastian Boyer will speak to the difficulty of this task and how he plans to evolve the machines to become “doctors” for crops, monitoring health and spontaneously removing pests like aphids.
Pyka’s robot is considerably less earthbound than those: an autonomous, all-electric crop-spraying aircraft — with wings! This is a much different challenge from the more stable farming and spraying drones like those of DroneSeed and SkyX, but the choice gives the craft more power and range, hugely important for today’s vast fields. Co-founder Michael Norcia can speak to that scale and his company’s methods of meeting it.
These three companies and founders are at the very frontier of what’s possible at the intersection of agriculture and technology, so expect a fruitful conversation.
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