Investing in agritech to fuel Canada’s growing food potential

“You think about impact to people, impact to environment and impact to the economic well-being of everyone in the world, nothing touches everybody quite like agriculture,” Emmertech Managing Partner Kyle Scott said. “The economic benefit that you can get from things like value-added processing or creating new and novel products here is immense … maybe one of the biggest ones that we have as a country, to be honest.”

Emmertech was founded with the focus of investing in agritech, particularly robotics and automation, next-generation inputs, and insights-driven technology. This focus allows it to help companies bring increased benefits to customers starting at the beginning of the value chain, allowing those benefits to ripple out from farmer through to consumer.

“When we invest in a company, we generally become one of the largest non-founder shareholders in the business. We generally take a board seat, so play a governance role with the company, and then the biggest elements that we usually support our portfolio companies with is our network within the agriculture ecosystem, so facilitating introductions both to potential customers and other investors,” Scott explained. “What we want to see in our investments outside of just economic returns for us in our investors is our company continuing to improve the value they bring to their end-users, because we believe that's the best way for them to increase the economic value of the business.”

In addition to the board seat, Emmertech also provides its companies with financial advice and strategy objectives, ensuring it can not only reach those goals around customer benefits, but also other growth objectives.

It’s a way of working together that both Emmertech and its companies have found effective. Emmertech has invested in a number of companies across Canada since its launch, including several under Protein Industries Canada’s portfolio of projects. Most have seen significant growth since the initial investment, such as Ontario’s Ukko Agro.

“What Emmertech and others see is that … there’s a story of sustainability that’s unfolding along a story of a viable business model,” Ukko Agro Co-Founder and CEO Avi Bhargava said. “I think that’s what Emmertech is funding and seeing, that there’s a benefit that compounds over time and starts to unfold.”

This ability to help investors see their story, and the benefit their technology can bring the sector, has been an important factor in Ukko Agro’s ability to attract funding. Bhargava added, however, that he’s seeing a shift in how best to share this story with investors; capital efficiency and a more backward-facing lens, he explained, are becoming more important.

“We’re working backwards now, in that sense, and we’re identifying what is it that people have a willingness, and what is a big enough problem. And then we’re taking it back to either investors or funding ourselves or bringing it to Protein Industries Canada and we’re showcasing that if we invest here, well here’s someone who’s very much interested in commercializing and paying for it once a finished product is ready,” he explained.

Combining the interests of both Protein Industries Canada and investors like Emmertech was a tactic that both Bhargava and Scott stressed. Not only does it help ensure companies across the ecosystem are receiving the support they need to succeed, they said, it also provides connection opportunities.

“Protein Industries Canada has been an awesome partner across a couple of different areas. One is just opportunity and company identification, so potential companies for us to be able to invest in,” Scott said. “Second aspect is Protein Industries Canada’s technologically diligence capabilities is something that we highly, highly trust … And then the third one is Protein Industries Canada, and I've actually seen this grow over the last five years, has significantly increased its competing power. And so the events that Protein Industries Canada is able to put on brings a lot of fantastic ecosystem stakeholders where we've been able to build better relationships.”

As Emmertech and other investors continue to take note of companies across Canada’s agrifood ecosystem, the potential of the sector will continue to grow. Together, these investors and companies will build the foundation for a more prosperous Canada, helping the country reach its $25 billion agrifood opportunity.