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It’s not easy for a startup to snare seed funding from an iconic entrepreneur like Mark Benioff, the founder and CEO of Salesforce, the software-as-a-service giant. But sometimes the stars align when a new venture aims to address a sustainability problem facing the world for decades to come. It’s a mission many investors—including the Salesforce CEO—care about.
Ofir Schlam, the president and co-founder of Taranis Inc., can attest to that. His company, based in Westfield, Indiana, was able to attract Benioff’s attention once he learned how it was tackling one of the biggest concerns facing humanity: a dwindling food supply as the global population continues to explode.
Taranis uses AI, computer vision technology and the world’s largest fleet of drones to survey farmland and analyze crops. It also uses weather data and satellite imagery to help detect micro weather conditions and anomalies for farmers so they can preemptively address problems they face.
A software engineer and fourth-generation Israeli farmer, Schlam believes the technology his company has created is mission critical to the planet. “Farmers are facing huge challenges,” he notes. “The agricultural industry is racking up $500 billion in losses each year due to climate change, crop disease, pest infestations and the loss of arable land. It is a global crisis.”
Schlam explains that if scientific projections are correct, we will need to double the world’s food supply by 2050 when the worldwide population is expected to reach 9.8 billion people.
Taranis’s aerial imaging captures high resolution leaf-level imagery that can see submillimeter objects as small as a ladybug. The data can then be analyzed by artificial intelligence so farmers can make informed decisions about pest control, plant health, fertilizer deficiencies and water management. This is known as “crop intelligence” and it’s a growing field in the AgTech industry that has caught the attention of venture capitalists worldwide. VCs are pouring billions into the sector; by 2025 investment in the AgTech is expected to reach $22.5 billion, according to Statista.
That’s because traditional crop monitoring is labor-intensive and not always accurate, even with the use of sensors, to track soil quality, fertilizer levels, insects, and other issues.
But building an AgTech company with audacious ambitions is not easy. For Schlam, however, no challenge is too great. A computer scientist, he served in an elite technology unit in the Israeli Army and was then recruited by Prime Minister Ariel Sharon to do work on Israel’snational communication systems, as well as cryptography and cybersecurity projects.
A Grassroot Effort to Launch a Venture
The Taranis story began in 2014 in Israel when Schlam and three of his friends—Asaf Horvitz, Ayal Karmi, Eli Bukchin who were software engineers specializing in AI and meteorological systems—got together to brainstorm entrepreneurial ideas.
“We all wanted to work together on a tech startup that would utilize our backgrounds and make a difference in the world,” he recalls. “The light bulb went off when we realized that we could combine computer vision and AI with agronomy to help farmers better understand how to boost yield production,” he adds.
But before even writing a business plan, Schlam did market research to validate the concept. He asked his family, who ran a 2,000-acre cotton and banana farm in a kibbutz on Sea of Galilee, for introductions to agronomists in Israel. After discussing his idea with these agronomists, Schlam had a better understanding of what crop data growers need to make better decisions that ultimately increase production. It also helped him pinpoint two big agricultural markets that use technology to boost ROI – Brazil and the U.S. These were great launchpads for the new venture.
Recognizing a lucrative business opportunity, in January 2015 the four founders quit their jobs and bootstrapped their fledgling startup with $200,000 in combined personal savings. During the first year, still in Israel, they wrote software, filed patents, trained the AI to identify objects in pictures, and licensed data from satellites. They also developed an operational plan.
Nine months later the Taranis team snared their first two customers: an 80,000-acre cotton and soybean farm in Bahia, Brazil and an 80,000-acre wheat, canola, corn and sunflower farm in Stavaropol, Russia. Both needed crop threat analysis to mitigate problems with pests, disease and weeds. At that point, the Taranis quartet met with potential investors including Vertex Ventures and Finistere Ventures in hopes of raising venture capital. “They were all fascinated with our technology but decided to wait until we were ready for the next funding round,” says Schlam.
Raising Money from a Celebrity CEO
But the founders hit paydirt in March 2016 raising a total of $2 million from a group of investors who included two Israeli angel investors Eyal Gura and Gal Yarden, who were successful AgTech entrepreneurs and in addition, OurCrowd First, an Israeli seed VC firm. The connections they provided were invaluable. Gura introduced the company to Benioff, who is also an investor in satellite technology through Planet Labs. He immediately became interested in the company’s technology and invested in the funding round.
The infusion of capital helped to establish the R&D and AI teams. Just as important, the investors introduced the Taranis founders to another Israeli startup called Agra that developed a patented camera system providing leaf-level imagery using computer vision. The Taranis team joined forces with Agra’s founder, Amihay Gornik, who is now the fifth founder and Taranis’s VP of software engineering.
A year later, with the camera technology and more customers in hand Schlam and his co-founders were able to secure $7.5 million in follow-on Series A financing from Vertex Ventures and Finistere Ventures. The money was used to grow its AI platform via data acquisition, hire drone operators and expand operations in the U.S. and Latin America.
Using AI to Boost Crop Production
Taranis has since been able to raise $100 million in venture capital and grow its business to over $10 million in annual revenue. It now has 120 employees and offers a subscription service where customers can get crop insights on everything from nutrient deficiencies and insect damage to field health through a mobile app, accessing data in real-time. The cost ranges from $10 to $18 an acre depending on how often the drones are used for monitoring.
In 2020 Taranis moved its headquarters from Tel Aviv, Israel, to Westfield, Indiana, to better service its customer base in the U.S. and Latin America. It has also built a nationwide network of drone service providers by partnering with DroneNerds and DJI in the U.S.
“Growing the business from the startup phase took a lot of hard work,” says Schlam. “The founders had to grow a customer base from ground zero,” he explains, they decided to target agricultural retailers and co-ops that have relationships with thousands of farmers.
This approach has helped fast-track growth. Taranis now has over 100 customers in Brazil, Europe and the United States. Agricultural retail companies like Nutrien AG Solutions, one of the world’s largest fertilizer producers, and co-ops like AG Partners, use Taranis’ services from planting to harvesting season (May through November). “Our service helps customers increase crop yields by 2% to 5%. That in turn boosts their profit margins by 20% to 30%,” says Schlam.
Taranis’s differentiator in the crop intelligence field is the company’s library of leaf-level images gleaned from its aerial surveys and reviewed by a network of 120 agronomists worldwide. It includes 200 million data points its AI has been trained to identify, and annotate emerging crops and their potential threats, including signs of diseases, nutrient deficiency, insects, and defoliation.
“We are always updating the library and prioritizing actionable data. Our goal is to help farmers all over the world that are faced with so many challenges,” says Schlam. That dream is slowly becoming a reality. Today, 3 million acres have subscribed to Taranis’ service and that acreage is expected to double annually.
Favorite quote: “The best way to predict the future is to create it.”
No. 1 Lesson learned: Only hire A players, no matter how hard it is to find them and get them to work in a small company.
Advice for aspiring entrepreneurs: A team of co-founders is like a marriage, finding the right ones is paramount to success.
Mentor: Eyal Gura, a successful Israeli serial entrepreneur and angel investor, was one of Taranis’ first investors. As a board member he advised me on how to run the company, build a management team, set milestones, raise additional capital, and develop partnership and distribution models and so much more.
This story and others on Times of E are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.