Supporting Startups Key in the Province’s Plan for Creating Agri-Food and Agtech Hubs
Saskatchewan is doubling down its support on agriculture, one of its key economic strengths, as it positions itself as a world-class agricultural hub.
By drawing on venture capital and public–private partnerships, the province hopes to boost the agriculture ecosystem by supporting agtech startup companies in Regina and agri-food entrepreneurs in Saskatoon.
“We export 70 per cent of what we make in this province. We are much more outwardly focused than I think people sometimes realize. We pay a lot of attention to what’s going on globally because we have to—that’s how our economy functions,” says Tina Beaudry-Mellor, the chief economic growth officer at Economic Development Regina (EDR).
An ongoing challenge for producers has been finding ways to produce crops more efficiently while also adding value before export. But producers in the province have improved their farming practices with the innovation of agtech for higher yields while decreasing inputs, including Regina-based start-up Precision.AI which uses software to map the placement of crops so only a fraction of chemical spray is needed for the plants.
Regina’s agtech hub
While agtech is adding value to producers, it is also a lucrative market that the province is hoping to capitalize on. Conexus Credit Union has launched an agtech accelerator program in Regina, Sask., and companies are backed by an equity investment through the credit union’s Emmertech venture capital fund.
Jordan McFarlen, the business incubator manager of Cultivator, says that they’re connecting founders to one million acres of farmland across Canada to gain the perspective of producers.
“We know that it’s very high risk for a farmer to adopt a new technology and we really want to ensure that there’s high quality products, companies are very well-funded and that they’re very well connected to potential users or customers,” says McFarlen.
The new accelerator is one of the only agtech startup incubators supported directly by producers and companies in the agricultural industry. The accelerator is a partnership with EDR is supporting agtech and foodtech startups in the province by taking potential ideas and getting them market ready. It’s first cohort of 10 agtech startup companies will begin in January 2022 with three months of programming.
Sean O’Connor, the managing director of Conexus Venture Capital Inc., says that the leap from a tech accelerator to one specifically for agtech meant they had to consider what the key differences were in creating a successful agtech ecosystem across Canada because “it behaves completely differently” than other asset classes.
“We looked at the ecosystem itself,” says O’Connor. “If we want to create successful agtech company, and more importantly, if we wanted to help create a successful agtech ecosystem across Canada, what are the key differences that we needed to take compared to go a lot of other iterations in the past?”
“The only way you can create that reliability for the startup spaces is if you give them more capital at the earlier stages so they can build commercially viable product from day one.”
O’Connor says that Cultivator isn’t just looking to innovate exclusively for Western Canada, but they’re setting their sights on founders who can create technology to sell globally.
Saskatoon’s agri-food hub
Saskatchewan is already an agricultural hub as the province has a fully integrated supply chain when it comes to agri-food. It’s also well-placed to leverage the research and expertise of food scientists, producers and entrepreneurs as Saskatoon has the largest cluster of agri-food organizations in Canada.
The Global Agri-Food Partnership (GAAP) is a collaboration between Ag-West Bio, the Global Institute of Food Security, the Agri-Food Innovation Centre, Innovation Place and private-sector partners. This incubator program will support founders with becoming market-ready and ultimately strengthen the agriculture ecosystem in Saskatoon with the emergence of value-adding agri-food companies.
The GAAP is looking to support early-stage technology companies which have a promising disruptive technology in development with an application in agriculture, food or food processing as well as rapid-growth-stage companies that have already demonstrated a large-scale commercial application for their technology.
“Being in food, in agri-food, is challenging. Your margins are low and it’s an important source of economic activity. But it’s also important because everybody eats and so food plays such a big role in everybody’s lives,” says Dr. Shannon Hood-Niefer, vice president, innovation and technology for the Saskatchewan Food Development Centre, who works directly with founders.
The agri-food startup accelerator is open to companies located and operating outside of Canada which have found success in overseas markets that will then have support in expediting their entry into the North American marketplace with lower entry costs and reduced capital expenditure.
“I think that economically that we will see some economic impact by having those small and medium enterprises be here,” says Hood-Niefer. “So having those companies start here and being able to grow and launch their businesses and hire people to help them, rather run their businesses, will positively economically impact the province and Western Canada.”
Through the GAAP, companies can benefit from a long-term incubation of up to three years, investment capital and save between six months to a year in research and development.
Three Farmers Foods is a Saskatchewan company that started from a family farm, and their success in producing camelina oil and roasted pulse snacks is a testament to how entrepreneurs can make the leap into the agri-food market.
“Early on it was just trying to learn quickly enough about the space and understand retailer expectations and getting that traction early on with those key retailers in Canada. That was the challenge,” says Natasha Vandenhurk, chief executive officer and director of Three Farmers.
“As a consumer package goods company … you will need investment, external investment, and now you’re on this whole learning curve of how to bring on investors how to create align with new shareholders, how
to build a board. So, I think honestly, at every given phase, there’s just a different challenge that goes with that.”
Natasha Vandenhurk and Elysia Vandenhurk, two of the founders behind the company, relied on early partnerships with government, food scientists and with other businesses for commercial kitchen space.
“Innovation does not need to be complicated. It does not need to be highly technical all the time,” says Elysia Vandenhurk, the chief revenue officer, reflecting on the company’s success since launching in 2009.
“In food, sometimes it’s just a very simple, convenient thing—one change that you’ve made to a product that makes it really innovative, and so I think, just for me, sometimes don’t over complicate it.”