Salmon Arm, BC-based mushroom-picking technology startup TechBrew Robotics has changed its name to 4AG Robotics and secured $17.5 million CAD in Series A funding.
The moves come shortly after the AgTech startup hired Sean O’Connor (former managing director of Conexus Venture Capital and Emmertech) as CEO and Chris Payne (previously O’Connor’s colleague at Grow Technologies) as chief financial and operating officer.
“We’re impressed by the traction the company is getting to date, with strong interest from some of the largest mushroom growers in the world.”
– Joseph Regan, BDC Capital
4AG, pronounced “forage,” plans to use this capital to speed up the development and deployment of the company’s solution, which uses patented suction-cup tech and proprietary mechanical robots to harvest mushrooms quicker than a human without damaging them.
Payne told BetaKit that 4AG is gearing up to bring its latest robot to a farm in Abbotsford, BC next month, and another farm in the Netherlands in April 2024. The company is also currently in discussions and nearing deals with two more international farms.
4AG intends to ramp up the production of its robots and grow its 37-person team to 60 with hires in mechatronics, research and development, artificial intelligence, computer vision, and manufacturing.
“Building and scaling manufacturing is a capital-intensive task, so we needed to bring on financing to help us do this, along with increasing our headcount as we look to add new features to help our customers increase their yields,” said Payne.
4AG’s all-equity, all-primary financing closed in late October and was co-led by BDC Capital’s Industrial Innovation Venture Fund and InBC, with support from the Jim Richardson Family Office, Lex Capital, and undisclosed angel investors. Existing AgTech investor Emmertech, which led 4AG’s $2-million seed round in 2020, also took part in the startup’s latest round.
“We’re excited to have the combination of BDC’s great experience in building robotics [and] hardware companies, along with the fresh approach that will come from InBC’s brand new fund,” O’Connor told BetaKit, noting that 4AG also marks InBC’s first direct investment.
This Series A capital brings 4AG’s total funding to over $20 million. O’Connor described the terms of the deal as “typical” for a Series A but declined to disclose what valuation the financing gives 4AG or whether it marks an up, down, or flat round.
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4AG has been around for some time. Founded by longtime CEO Mike Boudreau in 1999, the company has largely operated as a contract engineering firm building one-off robotics solutions for a variety of industries, including food, medical devices, and transportation. About four years ago, 4AG focused its attention on tackling growing labour issues in the mushroom industry.
While Boudreau recently stepped back from the day-to-day leadership of 4AG this summer for personal reasons, he remains the startup’s president while on leave.
Employee turnover in the mushroom industry is high, partly because harvesting mushrooms is a particularly challenging job: they are fragile, double in size every 24 hours, and grow on tall racks in cold, dark, humid industrial facilities, requiring pickers to work in uncomfortable positions for long durations. According to O’Connor, these conditions make the gig ripe for automation.
4AG has developed fully autonomous, vision-guided robots designed to squeeze into mushroom-growing racks and gently pick, trim, clean, and pack them all hours of the day, enabling farmers to offset labour shortages, boost yields, and harvest mushrooms at the most optimal time, while also reducing energy waste. With multiple pilots under its belt, 4AG is now ready to take its robots to farms.
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“4AG Robotics has been successful at building a market-driven solution to respond to one of the mushroom harvesting industry’s main pain points, labour shortages, an issue that has been increasingly problematic over the last decade and further heightened post-pandemic,” Joseph Regan, managing partner at BDC Capital’s Industrial Innovation Venture Fund, told BetaKit. Regan is joining 4AG’s board as part of the round, alongside InBC investment principal Scott Wong and Emmertech managing director Kyle Scott.
Payne acknowledged that securing capital amid current market conditions proved challenging, “especially so for a capital-intensive robotics company from a small town in BC.”
O’Connor described the fundraising as “a dogfight,” adding that, “every single day you can take a small step forward, or completely fall off a cliff.”
“The days of lightning-fast rounds with little diligence are over, so CEOs need to be ready for a level of diligence that’s mostly been absent in the market over the past few years.”
– Sean O’Connor
“The days of lightning-fast rounds with little diligence are over, so CEOs need to be ready for a level of diligence that’s mostly been absent in the market over the past few years,” he added. “There was a lot of luck and good fortune involved, but the one piece that allowed us to get this over the line was having BDC as our initial lead investor.”
“We’re impressed by the traction the company is getting to date, with strong interest from some of the largest mushroom growers in the world,” said Regan.
O’Connor advised other tech startup leaders seeking capital in the present economic environment to “scrap the frequently-used playbook of spewing BS to create FOMO amongst investors and default to transparency.”
“While you give up leverage through the discussions, it allows you to build trust with each other to navigate trying to close a deal while the world is falling apart around you,” said O’Connor.
Feature image courtesy 4AG Robotics.