Australian farmers have launched a world-first venture capital fund to back startup tech companies to tackle horticulture’s biggest challenges.

Research and development body Hort Innovation has partnered with investment firm Artesian to deliver the $60 million fund, which will seek out products and services that could improve the sustainability and productivity of fruit, vegetable, and nut growers.

It is believed to be the first horticulture-specific venture capital fund in the world, which chief executive Brett Fifield said he hoped would attract domestic and international developers on the cusp of commercialising their ideas.

Farming smarter

Under pressure from rising costs and falling consumption, farmers like Great Barrier Reef banana grower Gavin Devaney are turning to technology to secure the future of their farms.

Nestled between the range that is home to Queensland’s highest mountain, Mount Bartle Frere, and the Great Barrier Reef, Mr Devaney’s 101-hectare property is a tech hotspot that produces 250,000 15-kilogram boxes of bananas each year.

Water run-off and fertiliser use in the world heritage-listed area is tightly regulated and closely monitored to prevent sediment and nutrients from damaging the unique coastline.

But in what is considered the wettest climate in Australia, where the average annual rainfall is upwards of 3,500 millimetres, controlling water during a deluge is particularly challenging.

“We don’t have a problem with trying to irrigate — we have a problem with trying to get rid of the water,” Mr Delaney said.

In 2019, when he bought a neighbouring cane farm to convert to bananas, Mr Devaney turned to reef extension officer William Darveniza to implement best-management practices to control sediment and nutrient run-off.

“It started out with us seeing how we could get the water into an industrial-style developed drain and seeing whether the water could denitrify [remove nitrogen] itself,” he said.

“We worked out that the water plants and everything in [the drain] were able to do that — we nearly got it down to zero [nitrogen in the water].”

It kickstarted a three-year smart-farming project funded by several organisations that monitors everything from the water and fertiliser applied to the weather on spraying and which rows workers or machinery have been in to reduce double-handling and soil compaction.

“The project is definitely ongoing — it’s not something that can stop,” Mr Devaney said.

“I’ve worked better angles around how I can actually innovate more and hopefully create changes that make it easier on farmers to farm.”

Growing frustration

Mr Devaney is among a growing cohort of farmers looking to use technology to tackle a perfect storm of pressure — rising costs, falling consumption, and increased environmental regulation.

But while projects and trials like the one on his farm were common, Hort Innovation chief executive Brett Fifield said the outcomes did not always reach other producers.

“One of the challenges and I guess frustrations, to be honest, is it takes quite an amount of time in some areas of science to get a result,” he said. 

While continuing to invest Commonwealth and grower funds into traditional research and development areas like marketing, data, trade, and biosecurity, Mr Fifield said the new fund would look beyond horticulture for solutions that could be adapted quickly.

“Not only in agriculture, but are there medical innovations that we could apply to Australian horticulture? Are there innovations in other parts of the world that we can fast-track?” he said.

Venture capital is a form of funding popular with technology startups, where a group of investors provides finance to early-stage or high-risk companies to bring their ideas to commercialisation, often in exchange for a share of ownership.

Swing big

The fund will be managed by Artesian, an investment firm that has worked on a similar fund in the grains industry, through an investment committee that includes growers.

Artesian chief executive Jeremy Colless said the world-first fund was a “significant milestone”.

“The approach the Hort Innovation Venture Fund is taking is proven and well suited to address the needs of Australia’s horticulture production industry,” he said.

While it might never rival the venture capital on offer in Silicon Valley, Mr Fifield said the fund had the potential to attract tech companies from around the world to bring their products to Australia.

“We’re already in conversations with some international providers of robotics when it comes to harvesting and field preparation,” he said.

The fund will consider its first potential investments early in 2025.

“I’d be disappointed if growers didn’t see initiatives flowing out of the Hort Innovation Venture fund within the next 12 to 18 months,” Mr Fifield said.