Almost all innovations, be they simple engineering solutions or technologies that change the world, are born out of a simple idea in someone’s head.
When we read about successful innovations or new products we only see the finished version that is market ready.
For established companies, the process of bringing a new product to market is quite straightforward.
Established companies will generally have the capital to finance R&D and new product development. They will also be developing new innovations with customers or markets in mind, meaning sales will come relatively quickly once the new product is market ready.
Established companies also have an advantage in that they know the routes to market and have built up a network of distributors over a number of years.
For startup companies or entrepreneurs, the opposite is the case. All the challenges of starting out for the first time are stacked against startup innovators and bringing a new idea to life is not straightforward.
These barriers include access to seed funding, lack of market knowledge, limited technical or engineering skills or even something as simple as a workshop to design and build a new product. However, with the right help, all of these barriers can be overcome.
As locations go, Ireland offers many advantages for startup companies that will help them bring a new innovation to life. Here, we look at two key areas where startup companies in agritech will find plenty of support and help in Ireland.
Without doubt, one of the biggest hurdles facing any new company or entrepreneur is access to capital. While established companies can access R&D grants and use profits to fund new innovations, many startups are often reliant on the company founder to inject cash for early stage projects and research.
However, there are quite a lot of options out there for startup companies to access early-stage financial support and seed funding right through to a sizeable investment from a venture capital entity. Think of it as a ladder of investment depending on what stage your company is at.
Local Enterprise Office (LEO)
For any entrepreneur or startup company, the first port of call should be to their local enterprise office (LEO). With over 30 offices around Ireland, LEO is a branch network that offers advice, information and support to anyone seeking to start or grow their own business.
LEO can provide startups with a range of financial supports and grants to get them started including feasibility study grants, expansion grants, Brexit supports, innovation vouchers and exporter assistance.
To be eligible for LEO supports, the company cannot employ over 10 people and must be able to demonstrate a product or service that has the potential for growth.
Competitive Startup Fund
The next step on the ladder of investment for any startup business should be the Competitive Startup Fund (CSF), which is run by Enterprise Ireland. The aim of the CSF is to accelerate the growth of startup companies that have the capacity to succeed in global markets.
Startup companies can apply for up to €50,000 in funding from the CSF in return for 10% of the ordinary shares in the company.
High Potential Startup Fund
Ambitious startups that believe they have potential for rapid growth can also apply to Enterprise Ireland for High Potential Startup (HPSU) funding. HPSUs are startup businesses with the potential to develop an innovative product or service for sale on international markets and the potential to create 10 jobs and €1m in sales within three years of starting up.
Startups accepted by Enterprise Ireland under this funding stream will be able to access innovation vouchers to pay for R&D work, mentor training and an entrepreneur development programme, known as the New Frontiers programme.
Women in business fund
Female entrepreneurs or leaders of companies should also be aware that Enterprise Ireland launched a new €150,000 fund in early 2020 that is specifically targeted at supporting female-led businesses and entrepreneurs.
The primary aim of this specialised fund is to increase the number of women becoming entrepreneurs and grow the number of women-led startups in Ireland.
Venture capital funding
The final rung of the investment ladder for any startup business is venture capital funding. Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential.
In the agtech space, there are a number of venture capital players that invest significant sums in startup businesses every year. Two of the best known in agtech circles are Yield Lab Europe and Finistere Ventures.
Back in July, Yield Lab Europe opened a €21m venture capital fund targeted at early stage agtech companies and startups. Yield Lab said it is targeting companies with new technologies to improve the carbon footprint and the broader environmental footprint of the agri-food industry.
The venture capital fund said it is offering companies that are accepted into the accelerator programme an initial €100,000 investment, with the opportunity to secure up to €2m in equity investment for the best three companies.
Yield Lab Europe currently has nine companies in its portfolio, four of which are Irish. These include Cork-based Apis Protect, insect protein startup Hexafly, Carlow company Microgen Biotech and animal health startup MicroSynbiotiX.
Separately, Finistere Ventures has partnered with the Ireland Strategic Investment Fund (ISIF) since 2017 to offer investment opportunities to agtech startups. In September 2017, Finistere and ISIF launched a €20m Ireland AgTech fund.
After finance, access to technical and engineering expertise is crucial for most entrepreneurs or startups seeking to bring their idea to life.
Many company founders or start-ups have a good idea or innovation in their head but they can often lack the engineering, scientific, computer science or technical skills to develop a beta version of the new product or service.
However, there are a number of centres of excellence throughout Irish third level institutions and research bodies where startups can go for advice and support in the early stages of product development.
Enterprise Ireland has developed what it calls its Technology Gateway Programme, which aims to partner industry and startups with research centres in Ireland.
For agtech start-ups, some of the below institutions are among the most prominent when it comes to technical expertise in the agtech sector.
Dublin-based NovaUCD is a specialised research centre for entrepreneurs and startups located within UCD. First established in 2003, the centre aims to help commercialise research projects from the university.
NovaUCD has a strong grounding in agtech. Earlier this year, the centre was awarded €3m in funding from the Regional Enterprise Development Fund to develop an agtech innovation hub at the UCD research farm on the Lyons Estate in Co Kildare.
The hub is designed to help starups test their innovations and provide opportunities for on-farm research of new technologies.
Irish agtech company MagGrow was also spun out of Nova UCD and has since gone on to raise €18m in venture capital funding.
In Co Kerry, IT Tralee operates the Ag-tech Centre of Excellence (ACE), which operates as a public-private partnership.
Established in 2017, ACE is a collaboration between Dairymaster, McHale Engineering, Abbey Machinery, Kerry County Council and IT Tralee to develop cutting-edge learning and development solutions for the agtech sector in the region.
The centre of excellence for agritech R&D and training was co-funded by Enterprise Ireland to the tune of €5m under the regional development fund and positions Kerry as a regional leader in agtech R&D and talent development.
TU Dublin Hothouse
TU Dublin Hothouse is the innovation hub within the Technological University of Dublin (TU Dublin) where startup businesses can work hand in hand with researchers in the university.
Since it was first established in 2007, more than 400 startup businesses have emerged from the centre and attracted over €200m in investment, many of which are food or agtech related.
Teagasc, the semi-state research body for food and farming, can also be a really strong research institution for entrepreneurs and startups to work with.
Teagasc’s food research centre in Ashtown, Co Dublin, offers some of the most advanced technologies for companies to trial new product ideas, while its range of research farms for beef, dairy and sheep dotted all over Ireland make Teagasc an ideal partner for on-farm research trials of any new agtech innovation.