It just might be the most appropriate label ever: Ground Truth Agriculture has raised a $4 million CAD ‘seed round’ to develop technology that will provide farmers with lab-quality grain analysis from their combines in real-time and with location precision.
Ground Truth wants to combine conventional lab techniques with advanced machine vision tools. These are meant to provide farmers with grain analysis during harvest to help make earlier decisions on marketing, soil management, and crop production practices.
“We believe that Ground Truth is the missing piece in helping give meaningful clarity to the farmer on the outcomes of their precision agriculture practices.”
-Sean O’Connor, Conexus
“During harvest on my family’s farm, I would think about the effort that went into optimizing that year’s yield,” Ground Truth CEO Kyle Folk said. “And then we would send a grain sample to a lab with a volume equivalent to what comes off a four-foot square piece of land to judge the quality of a harvested area of at least 75 football fields. Where is the precision in that?”
Ground Truth claims that by using real-time analysis, its platform can instead be used at each stage of the grain handling supply chain to help farmers make better decisions and optimize value from the farm gate to the consumer.
The Regina-based startup closed the all-new equity funding round on November 4, bringing the company’s total funding to just under $5 million CAD. Conexus Venture Capital led the round, which includes $2 million from its AgTech-focused Emmertech fund. Additional investors include SaskWorks Venture Fund, Tall Grass Ventures, Golden Opportunities Fund, WTC Investments LP, private investors, and new commitments from undisclosed, existing shareholders.
Since beginning operations in January, the Ground Truth team has grown to include 15 employees, creating new jobs in computer vision, mechanical and electrical engineering, software development and analytical chemistry. Folk noted he hired for the positions before the round, so, he said, “that was putting the cart before the horse a little bit.”
Ground Truth will use the funds to build out its product. Folk said the startup has some development work to do before it can reach commercialization. Ground Truth has five different streams of hardware and software development that need to take place before the product is ready.
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Ultimately, farmers will be able to scan the grain using a near-infrared spectrometer while a machine vision camera takes photographs. The images will not only provide information on such baselines as the grain’s protein and moisture content, but also on roughly 25 other different characteristics.
Initially, the technology will be piloted on Canadian Western Red Spring wheat at the Folk family’s farm in Holdfast, located between Regina and Saskatoon. Folk said the farm is doing trials with that particular wheat because it is the hardest grain to grade. “If we can achieve everything within wheat, the rest of it will be much easier,” he said.
The technology promises to turn the entire grading process for farmers on its head. Currently, farmers take a small sample of the grain they’re loading into a bin, and send that off to prospective buyers. They then wait to hear back as to what grade the grain has been assigned, and will most often sign a contract based on that grade.
Several months later, when they reach the processing facility, they’ll pour the grain from the truck to test it again. At that point, the processor may assign the grain a completely different grade different from the initial assessment.
“Sometimes the farmer has driven hundreds of kilometres to deliver that,” Folk said. “But this is a known and accepted thing in the industry right now, and we’re saying it doesn’t have to be that way. Our goal is to make sure we’re aligned with what the farmers need and to provide them with a strong ROI [return on investment].”
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The grading process is also subjective, according to Folk, noting that two different people could arrive at a completely different opinion of the grade of the grain. He opined that Ground Truth’s technology will give farmers more information to enable them to make better decisions. “They already have enough risks to deal with,” he said. “They don’t need any more. But at the end of the day, from a commercial buyer’s standpoint, it’s also advantageous to have something that would be standardized.”
Sean O’Connor, the managing director of Conexus Venture Capital and Emmertech, said that finding an experienced team led by a repeat founder in the AgTech space is extremely rare in Canada. “We are excited to be working with Kyle given his experience in scaling and exiting an AgTech company,” O’Connor added. “We believe that Ground Truth is the missing piece in helping give meaningful clarity to the farmer on the outcomes of their precision agriculture practices.”
Emmertech closed $60 million for its AgTech fund in January. The fund, which wants to make Canada a dominant player in the global AgTech industry, has invested in crop management startup Ukko Agro and fertilizer-focused Lucent Biosciences. Ground Truth fits squarely into Emmertech’s investment thesis of seed-stage investments of $1 million to $5 million.
Folk founded his previous startup, IntraGrain Technologies, in 2011, at a time when “AgTech wasn’t even a word.”
It’s worth noting that Emmertech’s fund is a step in the right direction; an upcoming RBC report on AgTech noted that in terms of attracting private investment Canadian agricultural startups and private companies are far behind their international peers. Of the roughly $36 billion USD in global venture capital and private equity investments in AgTech since 2017, Canada received just 3 percent, or $1 billion USD, according to the report.
Folk founded his previous startup, IntraGrain Technologies, in 2011, at a time when “AgTech wasn’t even a word,” he said. The startup combined Internet of Things connectivity with bin sensors to protect grain quality and eliminate the risk of stored grain spoilage. Folk sold IntraGrain to Ottawa-based Calian Group in 2018 for an undisclosed amount.
Folk comes by his interest in agriculture and grain naturally. He was two years old when his father arrived to take over running his grandfather’s roughly 4,000-acre farm. His father retired this year, renting out the land.
Before Folk raised his seed round for Ground Truth, he secured another $750,000 CAD from family and friends in a pre-seed round in February. However, while Folk noted that he’s ecstatic to have new shareholders on board, he added, “that’s not the end game. That’s a fantastic achievement, but the real journey is to create a change in agriculture that will forever leave it in a better place.”
Feature image courtesy Ground Truth Agriculture.