This week, a jury met at Station F to select the startups for season 7 ofaccelerator Hectar. Exciting exchanges between the startups and the juries, made up of farmers, investors andaccelerator partner companies. As a member of the jury for season 6, we met Dominic Roth, VC at Foodlabs, who shared with us his experience as a member of the jury and, above all, his vision of the Franco-German agritech market.
Why did you agree to take part in the Hectar juries?
I think it’s great for us as Foodlabs to work with Hectar. There is a natural synergy between the acceleration program and us interacting early with the startups. There are a lot of overlapping interests between us and I think for me personally, being exposed to companies that early on and helping founders with all kinds of questions they might have when launching their company is a great experience, especially in the agricultural sector. I founded a company myself, so for me it’s also giving and sharing expertise with startups that apply to the accelerator. I’m always happy to help founders on their journey !
What are the trends in agritech investment in Germany?
That’s actually a very tricky question ! I launched my company in Germany, focussed on sensors and software for fertilizer application optimization in agriculture, and I think there’s still a tendency towards precision agriculture topics within Germany, but I believe that there’s also a shift towards marketplaces and innovative solutions for inputs. We look for solutions to decarbonize agriculture while making it more efficient.
More and more people are being interested in AgTech itself, which is great. The big wave of AgTech is still yet to come !
What do you see as the main differences between the French and German markets?
From my perspective and based on market studies, France is actually more advanced in terms of adoption of AgTech solutions. France is probably the biggest market within Europe and is very structured with strong cooperatives like InVivo.
We are very bullish on the market and are looking heavily into making more deals in France besides the 1 portfolio company we already have.
The similarities reside in the problem of inheritance of farms, many of them need to be taken over in the next few years because farmers retire and the need to have a business buyer. It’s pretty much the same in Germany, because farmers are aging and there is a need for a younger generation to acquire farms. So there is a natural shift towards younger farmers and a new generation which might be even more open to innovative solutions.
What advice would you give an entrepreneur about entering the German/European market?
You need to understand the pain point of your customer. Ask yourself « What pain point is my solution addressing ? ». I come across a lot of founders who develop their solution and then they speak with a customer for the first time, but they should do the other way round. Before you even develop anything, you should have a clear understanding of your customer : what size is their farm ? What are they growing ? How does their specific work week looks like ? Is your solution tying into their work ? What is the development effort you will have to put into the solution to get to upscale potential ?
I would also advise to research what other markets could this be relevant for and try to understand the nuances and differences between markets. Can you just sell it in France ? Europe ? Do I want to launch a global player in AgTech or is it more like a local champion ? I think it’s still possible to build a company that has a global impact but you also have to reinvent yourself for each region that you’re in : is it North America, South America, Europe, Asia ? Think about how your product has to be different to adapt to each region.
After creating your startup, how did you make the transition from entrepreneur to investor?
It was very useful to have founded a company myself before becoming a VC. The fact that the company is successful or not is not relevant, it is more about being in the shoes of an entrepreneur and launching something from scratch. You have a different level of understanding when you are on the investor’s side if you have gone down this path yourself before. It’s very helpful in my communications with the founders now, because I know exactly what situation they’re in, with the fundraising and the stress that comes with it. My experience of building a team and a whole company itself helps me to understand at what state the startup is at the moment, and it gives me a much better comprehension of how realistic their forecast is in terms of costs, timelines for hiring or for reaching certain milestones… That’s something hard to learn from a book !
Many founders enjoy talking to people on the investment side who have already founded their own companies. It gives me credibility and puts the conversation on a different level. Most of the time I try to help people who I talk to even if we don’t end up investing but I think our thesis here is to provide value with our knowledge, our learnings, even if it’s just feedback. We need founders as much as founders need us ! It’s important to stay humble regarding what we do and be very appreciative of both sides.
