Our Research and Delivery Lead Steve Collins recently sat down with Connecterra's CEO and Co Founder Yasir Khokhar.
Yasir tells us all about where the idea for Connecterra came from, including his move from the desert to a dairy farm, his top tips for other leaders going through the start up process as well as his advice for those entering fundraising stages (his top one being never try to fundraise during a global pandemic!).
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Hello and welcome to the Cultivating Conversations podcast. Today we’re joined by Yasir Khokhar from Connecterra. Yasir is the Co-Founder and CEO of Connecterra, and today he has joined us to share his insights from the AgTech sector, the journey that he’s been on and his advice for AgTech start-ups right now. So Yasir thanks for joining us let’s jump straight into it.
First off can you tell me a little more about yourself and your background?
Sure, and thank you for the interest Steve! First up, I’m Yasir co-founder and CEO of Connecterra. We are a start up based out of the Netherlands. There’s around 34 people here, operating in 14 countries now.
Well the story of Connecterra and my personal background is interesting I guess. I don’t come from the agriculture industry, I spent 11 years at Microsoft, although technically this is the third company I’ve founded. I started my first company when I was 16, in the mid-late nineties, capitalising on what eventually became the internet bubble. I guess I like building things, I’m a software engineer by education. My first company was ecommerce based, the second one was working in computer vision – we did sentiment analysis for television stations. That was my first introduction into machine learning, AI didn’t really exist back then.
I did this for a few years during college and learnt some great life lessons then joined Microsoft based out of Dubai where I lived for 9-10 years. I was eventually brought out of the desert and, for a change of scenery, moved to the Netherlands (still with Microsoft) where I ended up living on a dairy farm (long story!).
This is where the two ideas that I had had for a while came together to form Connecterra. In my career at Microsoft I had done quite a lot of work around technology, I’d worked on the company strategy for smart cities. This was my first introduction into IOT and smart sensors. This crazy idea was knocking around in my head, that if you could put sensors everywhere in the real world, well then you could use machine learning to understand what the interaction was between different physical objects – would you then be able to make a model of the real world and understand or predict what is happening in our physical world?
This was really looking at whether we could use this technology to solve problems of consequence. At this point I had a hammer but I was looking for a nail. I had been talking a lot to my friend and neighbour at this point, the farmer, who kept saying to look into agriculture. When I did take a look at the industry I was utterly blown away by the scale of the problem – what we now call ‘The Agriculture Problem’. Essentially it’s an optimisation problem, you need more food, you have less people coming into agricultural careers and therefore we needed to change the way we farm. That was a really ideal problem to solve with this concept of data and sensors. And that’s how Connecterra came to be and that’s how I got into Connecterra – or at least the genesis story.
I guess that’s the only kind of concept that you can trade the desert for a farm and find the nail you were looking for. Obviously Saad is the co-founder there, so how did you meet each other?
Saad and I have known each other for 24 years, we were in college together and had done a lot of our senior projects together, and worked at Microsoft together. We had been good friends ever since then. When I had this idea I called him and said ‘Listen Saad, I’ve had this crazy idea, we could start working on this on the weekends...?’ and he was totally game. Initially it just started as something we were tinkering with, way back in 2013.
As you know, we at Chaseman love Connecterra, we have the cow with the collar on our wall. Can you share with the listeners a little about the product and the problem you’re solving?
Sure, well I’ll go back to the problem statement which is fairly well known now. Firstly world population is growing and that’s a fact. By 2050-60 we’re going to hit peak population of the planet and there are some predictions that say we’re going to start tapering off after that. In order to sustain that population and food demand we need a 60% increase in food production. However at the same time we’re losing labour depending on which area you’re in – dairy farming farms are steadily closing down, while cattle farming are remaining fairly steady. Less and less people, and less and less knowledge, is staying within the industry. Then there is climate change, which is not only affecting our growing plans but agriculture is impacting climate change itself – it's a fairly climate intensive activity.
What our product IDA does is look at how do you optimise the farm for efficiency and sustainability, not just the farm but the entire value chain. In order to do this you need high-quality data which is where the sensor story comes in. We built the sensor because we needed a high-quality data source and one of the key sources for the dairy and protein industry is dairy cows – so you need to instrument the dairy cows. But that’s not the only data source, we integrate with other third-party data sources too.
IDA is an intelligence, she’s learning how to operate sustainable and efficient farms by using data from several different sources. The beauty of the product is in the impact that we’ve had already. With Wageningen University we’ve completed a three-year study on the impact of our technology on farms and we’ve decreased anti-biotic usage by 50%, we’ve improved efficiency by 20%, we’ve reduced labour by 20%. These are big numbers for technology that’s only around 3 years old.
Fantastic, so fast forward a few years. You’ve won awards for innovation, achieved your funding milestones, hired some great people, what does the future hold for Connecterra?
So, the ultimate vision for Connecterra is to empower farmers, and the agriculture industry, to make farming efficient. We’re making steps starting with dairy and expanding into other subsectors. We are exceptionally mission driven and empowering the farmer is really at the top of our list. As you see farms getting bigger and you’re seeing demand from consumers for more insight into how food is grown. Alongside this you’ll see us working more and more towards adding sustainability angles into IDA and how we can help transition the industry by using data to find angles that can help make farming more sustainable and more efficient.
OK, so that brings us nicely onto my next question. Agriculture in general and, of course livestock, has seen huge pressure from an environmental perspective. What are your thoughts on the relationship between agriculture and climate change?
Well agriculture is the most impacted industry from climate change. It’s a serious problem the impact of climate change on agriculture, but there’s also a serious question about how much agriculture contributes itself to climate change. They are two different problems and I think we need to box them separately.
One is how are food growing patterns changing because of climate change (big problem impacting food safety and food security for governments) and the second one is whether the food production process itself is impacting climate change. This latter one is an interesting one, it’s very interesting to ignore a four-cylinder, gas guzzling car and point a finger at a cow and go “Well the cow is the problem”. Where as if you look at the data, the real problem is energy. Yes, agriculture does contribute and yes, livestock is about 14% of global greenhouse gas emissions according to recent reports. Yes, there is space to improve, but what you see in livestock farming specifically is that the emissions are methane. Methane lasts for around 10 years in the atmosphere, and if you keep livestock population constant then the methane levels remain constant, because of the natural life cycle of cows. Over ten years you end up with a net zero effect. What we need to do is not add to the livestock population but make our current processes more efficient so we can do more with what we currently have to meet the production demands.
The second thing is a new concept called ‘Regenerative Agriculture’, while it is still new it’s already being adopted by a lot of the big companies in this space like Danon, Arla and Nestle. Livestock actually helps make your soil and land better, it also helps you to sequent your carbon from the atmosphere and store it into the ground. These are new concepts, they are still be studied and tested but they are very promising. It’s technology like this that will enable livestock to be a part of the climate solution.
Finally, there are companies that are doing some amazing work looking at the diet going to livestock that will help reduce the methane emissions you get from livestock. You also need to draw a distinction between beef and dairy. There are 1.3 billion cows in total for livestock but from this dairy is about 300 million cows.
It’s fair to say that you’ve started Connecterra at a time when climate change is at the top of everyone's agenda, how has that influenced your decision making? How does that impact you now while you raised funds?
So the first thing to say here is that we’ve had this in our mission since day one, it’s not been a development since the raised interest in climate change, we’ve been on this for a couple of years now. In terms of funding, obviously we’ve attracted impact investors with a strong focus on sustainability and climate change. From a funding point of view, I think it’s a little too early to say because the time horizon to see results on climate change, and the fact that a lot of the work being done is still in it’s early stages, I’m not sure how that works with the lifecycle of a lot of funds. We’ve been fortunate that we’re one of the earlier companies that’s looking at this space, and we already have some results to show.
That brings me nicely onto my next question again, it’s almost like you read my mind on it, as the CEO of a successful startup in the AgTech space, what’s been the key or keys to your success would you say?
Ah, that’s a good one. So I think the team makes a big difference. We have a very strong team at Connecterra. I think that every time that we’ve gone through funding rounds we’ve had great feedback on the team. Tech in Agriculture is not new, AgTech is new. I think a lot of the tech that has existed in this space has been developed from within the industry and we came from outside of the industry. With that we looked at the problem and thought very differently. The team and our unique perspective has been a huge success factor.
Another thing that ties in with this is that we had no notion of what was difficult or easy was in the ag space. For example: The industry talks about data, everybody is talking about data, they have been talking about it for a long time and there is this idea of more being better. We came into it and thought, actually more is not better. In fact, no data is great! So when we built IDA we took away all of the data for the end-user, we crunch a lot ofcourse we are an AI company but there is no data in the product. Simplifying it for the end-user so that it becomes usable is a tenant that we brought in from the technology industry. Marrying the lessons we learnt from tech with ag have also been key success factors.
We have also been fortunate to get our key customers in the early stages, for example we’ve been working with Danone for three to three and a half years and that has been a great validation of what we do which helps when we come to successfully raising funds.
Well, it’s obviously all been paying off because earlier this year you had a successful fundraising round. I know that’s no mean feat and it can be an incredibly stressful time so what was it like for you and advice can you give to other leaders going through a fundraising process right now?
"Don’t fundraise in a pandemic! That’s my first piece of advice, if there’s a global pandemic I mean just find another time. "
Don’t fundraise in a pandemic! That’s my first piece of advice, if there’s a global pandemic I mean just find another time. That said, often you don’t have a choice and we found ourselves in that space as well. We were fundraising and then the corona crisis hit. That said, the first wave which hit us in March was the worst because nobody knew what was going to happen, nobody knew how it was going to be so it was a tough time for everybody and I’m proud of my team that we were able to successfully fundraising despite apparent global meltdown.
Fundraising in the AgTech space is not easy because there’s not a whole lot of specialist funds. Depending on what industry and sector you’re in then your funding strategy changes. If you’re a marketplace in the AgTech space then it’s slightly easier for example, sure you’re working in the AgTech space but VCs and investors can relate to the marketplace concept. The more specific you get towards farming the avenues for fundraising then become slightly more specialist because there is less and less options. Your best friend will be your execution, if your numbers can speak for themselves then this will help a lot. We’re pretty execution focused as a business and I think that was one of the key drivers for us landing successful fundraising during a pandemic of the successful path we were on.
I could go on forever about fundraising and how it’s different over different stages, and how it’s different across the UK and Europe but yes, you’ll have to stop me at some point.
Of course, I guess the simple advice “Don’t Fundraise During A Pandemic” is good advice for anybody. On the flip side of that, what advice would you give to other leaders and founders about what hard lessons you have learnt so far?
Umm, I guess I’ll start with the top three that come to my mind.
The first one is to raise a bigger seed round, don’t leave money off the table in the early stages. It will always take longer and you will always need more money. I wouldn’t worry too much about dilution in your early rounds. In your seed round your investor is making a bet on the team and the idea, that is where you have the most freedom to express your vision of the product, you don’t want to compress that because you’re going to be short on cash. As soon as you get customers the ball game completely changes. At this point you’re looking at revenues and multiples and so on and so forth, so I would say bigger seed rounds so you can build a good product is the first thing I would say. We had a pretty good seed round but if I look back I probably would have done a little bit more.
The second thing I would give advice on is everything takes longer in agriculture, simply because of the industry. The target customer is not bound to, what a lot of other markets are, the market, quarterly results and competition. If you’re farmer focused then the sense of urgency is seasonal, and you have to go through the different seasons and types of environments and this will take a long time. Get in for a long ride. If you’re getting into this space, you like agriculture you better really like it because you’re going to be here for a long time. It’s not a get rich quick scheme by any means.
The third thing I would say, which has really worked for us, is being mission driven. Being authentic about your mission, while this sounds a bit fluffy has had huge benefits for us, not just in attracting talent but as I mentioned earlier guiding our decision making and attract he right type of investors. We truly believe in what we are doing and we see the results in what we are doing and that is a very gratifying feeling. That’s really worked for us. It doesn’t mean every mission has to be noble, sustainable etc but it will be the future of companies in the era’s to come and you can’t understate the importance of that.
Absolutely, so if we were to take a step back from Connecterra where do you see the future of agriculture?
Agriculture isn’t going away anywhere, it’s never going to go away. As long as humans exist you’re going to need food.
If we take the mechanisation of agriculture in a historical context, so post WW2 you saw a huge boom in agriculture efficiency not just from fertilisers but also mechanisation. We’re now going from a macro-mechanization of agriculture (massive combines and machinery that automated a lot of the labour problems) more towards a precision and data-driven agriculture.
If you look at what Google has been working in with their Moonshot labs at Google X they call it computational agriculture, if you look at what we’re up to it’s a form of computational agriculture. I think the sector will become data driven but I think it will be more than that. I think we will be using data to drive action, using those insights to fundamentally change the way we operate.
Robotics is the on the rise, I think it will take some time but robotics combined with closed environments like vertical farms is really interesting upcoming tech. At the same time we’re also seeing a lot of innovation within biology, we’ve had GMOs but now we’re looking at feed for cattle which is less severe for the climate. I think agriculture will intrinsically be linked with climate controls and a lot more tech will be used to support this.
"It’s an industry that hasn’t been digitized or automated yet and its time has come."
Finally, we’re going to get farms that will get bigger, which may not be a good thing depending on your perspective. Farm labour will be full of managers who will be more tech savvy than they have ever been before, it’s an industry that hasn’t been digitized and automated yet and its time has come.
I totally agree, it’s a pattern we see across the different verticals in agriculture and I think it’ll only be a positive for agriculture and the climate really. Thank you from me for your time Yasir and thank you so much to everyone who has listened. If you could rate, review and subscribe to the podcast that would be brilliant. Please do listen to episode 1 and 2 for more insights.