So in life sciences, you've got everything from biologicals to gene editing to new age ingredients on, you know, more of the. Really biology focused technologies. And on the other side of spectrum information technology that software, hardware, logistics, supply chain, things of that nature that requires, or data, or, you know, any type of mechanical operation.

And that piece rolls up under me upon effects ag tech I've historically led that area. Give them my back Brown, which as you had mentioned is in software hardware coming from, Qualcomm ventures down in San Diego.

Minnie: , so yeah, you're coming from Qualcomm. So things like internet of things, sensors would make a lot of sense.

Gil: That's right. That definitely falls within my purview. So, .  You've got SAS software, 

so you can be talking about an ERP platform, farmers to utilize to better manage the profit loss within their farm on an acre by acre basis. Ingredient by ingredient basis covers everything from harvest inventory too, , much more upstream. You know, we have another company in our portfolio called food logic, which is focused on traceability and transparency within the food supply chain.

And they're catering to big CPG companies, big restaurants, but groceries.  Large guys looking for transparency and trying to mitigate any risks that they have with. Foodborne illness, health, and managing the big supplier networks that they have, 

so, you know, those are some of the areas under SAS and software. There's also robotics. We'd invested in an RA ex exited a company in the robotic farming space. How many called blue river, which was acquired by John Deere couple of years ago. And they were basically identifying weeds in real-time on the front of our tractor and zapping them using artificial intelligence and robotic sprayers to do it millisecond by millisecond.

So the massive savings of.   Crop chemical inputs so that you didn't have to spray across the entire field. You can just literally identify a small weed, a small encroaching plant and zap in real real-time numerous per millisecond. And you didn't have to employ as many laborers, which, you know, in the United States, you're not familiar with.

We have a huge labor problem. 

So, you know, that continues to be an interest area for us, robotics, then you've got, , sensors, as you said, right? So you can do that for, , irrigation. You can do it , within, uh, grocery stores.

Minnie: , I could ask questions at any of these. Let's let me stick with sensors. , when you're evaluating potential use of sensors or companies selling sensors, like,  what have you seen that works?

What have you seen with the deployment that maybe doesn't work.

Gil: Yeah.  It's a good question.  Over time.  In a good and bad way, sensors have become relatively commoditized and continue to do so. You know, when I was at Qualcomm ventures are a lot more expensive to put, , either a baseband or, or,  uh, 3g chip in any sort of situation or any sort of chip set where you want to deploy it.

these days you can put, you know, a much lower cost,   Peace into any area and deploy it. So again, on the one hand, you know, that's, that's beneficial from the standpoint of right. You can deploy these all across a farm, can deploy them in volume, across, you know, maybe indoor farming, but at the same time, it becomes less special because you know, there's less technology on the chip.

I think for us, what we look for now, as opposed to, you know, there's this unique chip set. Um, given that, you know, the costs are coming down and, you're able to sell it for less effectively is what is the data network that you can build around that? So in the case of blue river, as a great example of something that we believe was successful was, you did, of course have, CPU, chips and GPU chips and.

And networking chips on these tractors, but there wasn't in volume. Um, you know, you only needed a few to do the certain amount of processing that you need on that tractor, but it had, uh, a wide, wide applicability. So it's not going to be necessarily a volume. You're not selling the chips. If you sold that, you know, come out to, you know, a couple of hundred dollars in actual revenue.

Instead, what you're selling is actually the machine learning component. So what we look for. Is that combination. What can you layer on top of those to build a platform? And what they built was the learning mechanism behind that, that they then deployed this machine learning aspect onto the tractor set, comply to all other machines that they utilize.

And basically they add.  This computer learning in the background, also powered by humans in many ways, um, to help these robotics learn what was a weed and what was a plant and identify in real time in milliseconds  , how to, you know, get rid of the approaching plant.

So it's all about the network that you built behind it and whether that's AI, whether it's machine learning, 

Minnie: , what is the state of, farming and growing today and how sophisticated are these organizations in terms of having that data and having sort of the it staff to. Sort through all the data and what's their appetite for new tech.

Gil: Yeah, that's a great question. you'd be surprised. Farmers are actually pretty sophisticated  when it comes to new tech. I mean, you know, on average, they're utilizing 20 plus different pieces of software already, and they run these more like organizations like a company, if you will, this is on the farm.

, growers, I would say don't necessarily have the whole institution backed up to analyze this.

And that's where a lot of startups come in. But what we're finding is. Sometimes it's just enough to be dangerous. They don't need necessarily. And this is where, kind of a pitfall of a lot of the startups that are in this space. You know, they don't need this big analytics piece in the background. It's really all about ROI and what the grower thinks is good enough or not.

So if a startup could come in and provide that value from a data perspective, That's fantastic. They really, really have to prove, you know, if you use this software, if you use this sensor paired with this software, as we describe it will equate to exactly. I don't know, three to one return on your investment, but you're finding that's very blurry.

It's hard to quantify that. And I think that's where a lot of growers hesitate and there's been a lot of guys who were coming in and saying, Hey, we can offer. 10% yield improvement, but it's so hard to prove that. So that's really the trick nowadays. they don't necessarily have guys to process processes, but at the same time, they don't necessarily want to buy it unless it's immediately obvious.

Minnie: Hmm.   What percent of the market is sort of really big, uh, growers and, you know, what are their operations like?

Gil: Yeah. So, there's, there's a wide range of grower size, there's over a million farms in the United States alone.  And the growers can range anywhere from, you know, a couple of hundred acres to, over a hundred thousand acres at a time.  If you're talking about specialty crops, No vegetables, things of that nature in California, you know, Salinas Valley, et cetera, they're smaller acreage, but higher value crops, which is also what they're typically known as.

But if you're talking about. Corn soy was known as what are known as row crops. Typically larger acreage, lower, more commoditized crops, but they make money on volume versus necessarily margin. So there's a pretty wide range. And that also dictates it does dictate the sophisticated nature of the farmer.

It's a small family operation where you've got a big grower operation, which can be very technologically advanced.

Minnie: is there better tech opportunity in the sort of row farms as you say?

Gil: I I've seen both. I've seen both. It's definitely on both because you have that mix equivalent one is much higher volume that you get to work with. If you're a startup, one is much higher value and guys are willing to pay for it because they can, they get afford it because they have the margin on a smaller amount of land.

It just depends on what you're targeting and what the value prop of your tech is.

Minnie: And so do they, a lot of times  come out of, agriculture or are they more, you know, I'm building a satellite company and, Oh, it has applicability to farms.

Gil: You know, I've seen both, I would say predominantly it's agriculture companies that are focused on that. That was the original. thought process when they created the company and other ones that try to pivot into it. I will say from my experience have much less success because agriculture is a unique area.

It's difficult to understand, you know, growers buying habits, um, the different corporates in the space that utilize technology, et cetera. So you don't have that expertise beforehand. You're already coming from behind. I think, you know, there are definitely areas where guys try to move into the sector.

Like. You know, satellite and envision companies, you know, and try to make it applicable, but it is, it is once it start out with spoke to ag or an our ag tech companies from the start are typically what we have seen to be more successful.

Minnie: Hmm. Do you have any tips,  Maybe that's hard to summarize in a short podcast. Um, but are there things that you've seen that people may be coming from inside? No. And people coming from the outside don't know.

Gil: Yeah, sure. I think one thing that you'll definitely see is the direct to grower approach is very difficult. And I think a lot of guys coming from the outside underestimate that in ag, you really need what we have seen at least over the last five years  is you really need a sophisticated channel approach from the start because it's a lot less scalable when you're trying to send a direct Salesforce out.

As say a SAS company, you know, it's costly, it's geographically expansive. If you're approaching row crop guys, for instance, you're sending them all across the U S and your costs, your operating costs, at least for something like a SAS company or any sales organization do, does incorporate travel. You know, it's.

Relatively long sales cycles to break into it. You have to get to know the growers. There's not like a central database of every grower. You can reach out to them. it's definitely difficult to have a direct sales approach from what we have seen. You know, other things that we have seen is from an acquire standpoint, there's not a massive amount of acquirers, but they're, they're definitely inquisitive.

Which is very good for our space and they're becoming more and more acquisitive as they haven't spent R and D dollars, you know, over the last couple of years, they've kind of waned on that and now they're acquiring to make up for it. So you're seeing a lot more acquisitions, a lot more space for innovation.

 I think that's a very good thing, but you need to know which acquirers very specifically what they're looking for, because. They can be very fickle. I'd say that's another thing. So you definitely have to have knowledge of the space, the relationships for the different types of strategics around the area.

Minnie: Hmm.  What are the priorities now like, , is the labor shortage a big priority right now? And how do you see that playing out?

  Gil: Whenever you talk to a grower, the primary. Difficulties or distributor or other guys within the ecosystem of ag, , going up to, to restaurants, groceries, et cetera.  they always name labor and water as probably the two biggest issues facing them today.

, so it's definitely bottlenecks, but I would say there have not been fantastic solutions to address this. Robotics is definitely getting there.

You're seeing everything from robotic harvesters, drone harvesters. You're seeing different guys for robotic pollination, all different types of areas on the farm, and then, you know, into a supply chain and then up to, you know, warehouses. .

. You just have to find the right value proposition and make sure.

The capital expenditure associated with that, which is a lot, it takes a lot to grow a robotics company, not cheap is worth it. That's the big trade off. And so, you know, you have these jumps, it's kind of like put a lot of money into R and D money into R and D there's this gap in between then in commercial execution and then great.

  Is a little bit of a fine line. Do you invest before they get that? Do you invest after? And we continue to toe that line and look for the right amount of traction relative to funding to get them to what we feel is less R and D or of commercial growth.

Minnie: , so you're coming from Qualcomm, you've got sensors and robotics and data. , you know, are there people who are more on  the,  life sciences, biotech side of, the shop?

Gil:  Look at our pipeline,  it's a nice mix, 50, 50, maybe 40, 60, you know, it depends on everybody's pipeline of life sciences to information technology right now, to give you a sense for that. You know, it was you'll 11 portfolio companies in our fund one, which was a $100 million fund.

, we had close to, you know, half of our companies on one end and half on the other side. And, you know, I'd say the pipeline reflects that as well. So you're definitely seeing a ton of stuff in life sciences to match the amount of stuff that you're seeing in Infotech.

, gene editing is huge.  And trying to innovate on, natural, usually organic solutions  to spur growth in crops without having to put more inputs or war chemicals or more. expensive seed into it to yield a better result.

That's basically the, the concept behind new innovative inputs that are happening within agriculture. And ingredients. So everything that's supplying, you know, the beyond meets of the world possible foods, you know, they have to come up with non-meat ingredients, you know, how are they going to do that? At scale there's companies that are building technology to build pea proteins, to build, you know, all types of stuff that are alternatives to a traditional, you know, areas that people are a little bit shying away from now on the consumer end.

Minnie: So my husband won't let me eat apples unless they're organic.  What's the hype, what's the reality 

um, what should I be thinking about.

Gil: You know, it's a little bit of a marketing tool. I would say the closest comparable to saying something as organic is that it's simply didn't have chemicals sprayed on it on the field. You know, that's not to say that there weren't, I don't know this or that preservative preservatives that came in later on, so on and so forth.

Um, and in a lot of cases, it's what is. Generally an accepted amount, maybe that it didn't reach a threshold such that they could say that is organic. So it's a little bit of a misnomer it's, it's, that's part of the issue in food and ag, right? There's not as much transparency. I don't think the normal consumer has any idea what really, really is the difference between this or that blueberry in terms of meaning organic or not.

Minnie: It just the sticker. You just look for the

sticker Gill,

Gil: sticker. And then you automatically pay more and that's like

Minnie: That's how it works.

Gil:  I definitely fall for that. Whatever. I see the two and I'm feeling I'm trying to be healthier, but I think. From from, from a genetically modified standpoint, that is maybe a little bit easier to explain, which is 

there is a difference between genetically modified, which means inserting a foreign gene and gene editing, which is removing . A gene that is dysfunctional or, you know, uh, is susceptible to disease. So, you know, an example might be genetically modified, might be something to increase the size or girth of a certain fruit, you know, and that's to many people considered unnatural for gene editing.

It might be. You know, an example might be one of our companies called Tropic bio-science, which is focused on gene editing for tropical plants and the problem with one of their, their target areas, plants, uh, which has bananas is that the crop is actually technically going extinct. You know, this is readily available.

Not many people are cognizant of this, but the banana has is 99% of the. Strings of banana in the world. And that is a result of distribution out of genetic diversity. You know, in the early 19 hundreds, when they were trying to get rid of disease and left them with one strain of banana, basically throughout the world.

And as with anything, when there's one strain, it's extremely susceptible to different diseases and that's a problem. So there's different diseases now attacking those possess bananas that there is no natural. Protecting against example might be black sick Atoka, which is disease that affects it turns on black, you know, Tropic biocides is using gene editing and a form of CRISPR gene editing to edit out the gene that is susceptible to plaque sick Atoka and make it.

You know, perfectly normal. Otherwise there's no way you would be able to tell different Sweden one or the other. Um, except that this one simply doesn't have that gene, which could destroy the plant. So theoretically, there's no difference between that. It just doesn't happen to be, have a bad gene that exists from its genome in it.

, in many, many ways, Gene editing is improving upon life. It does have to take a careful approach. And this is something that is very, very, very highly regulated , these are types of things that are being worked on. Now

 Minnie:  What are the main complaint? Why does everyone freak out about, um, about this? 

Gil: It's a branding standpoint. It's very unnatural. I mean, you know, it's the same thing as if you saw, you know, a nine foot human walking around, you know, , if somebody, inserted a genetically modified trait, all of a sudden make people giants, just like they do a, a tomato yeah.

You would do. Of course you'd be freaked out. Right. Um, it doesn't necessarily mean it's bad. , if you saw tomato, the size of your head, I, you know, you might be a little bit skeptical, they eat it.

, but really the only difference between genetically modified and what frankly we've already done through,  planting and diversifying traits over time is, is, is exactly that time.

One can be done on a very quick level and one takes,  , 30, 40 years to develop a giant tomato, but you're ending up with the same result, . , 

Minnie: okay.  Let me just stay on Pontifex for a little bit. Can you tell me a little bit more  how you guys came together and then, , how you went from, uh, well, your first one was a hundred million to a $300 million fund.  

Gil: About six years ago. Now, a little bit more, the two partners with artifacts, ag tech came together.

One of them is named Phil Erlinger and one of them is named Ben Belldegrun to, invest in this space,  phil came from more of a traditional finance background, investment banking is that Lehman brothers, a senior executive for 25 plus years.

Ben ratchet ran a natural resource fund for Reverend Howard, the largest allocator in Europe. And they were both, you know, principal investors. And decided that this space, all the value capture was in the technology. You know, there was a ton of innovation coming out. It's a huge market and ag, you know, have one of the top industries in the world, trillions of dollars there, and barely any of innovation puts a technology and just huge, huge gap in terms of capital.

They came together, created upon facts and I joined them to help build the franchise about five years ago. So the three of us set out to build a farm. We raised that first fund and it took some time, you know, the way that we did it was we built a portfolio of assets, portfolio of companies, five companies to start where, you know, we needed to fund it through.

At first, we had vehicles that we siloed these into to prove out the basis of, we think these can be successful. , so we had, we had five companies that we put together that we showed as a portfolio.  Here's where we had a number of upper rounds. You know, we have very good traction, nice commercial success. And we were able to demonstrate these are early stage startups, you know, and that's what these institutional investors were looking for, that we were fundraising from.

They want a growth capital investor in this space. So we carved out and said, look, we're only focused on late stage. There's a number of fantastic VC firms in this area that we collaborate with. But they're more focused on the earlier say side sometimes. So go up upstream a little bit later, but they're not deploying 20, 25 million per deal.

 And that's what we became. So first we had that a hundred million, you know, first it was 50. Then we attracted more institutional capital by proving out, Hey, here's the later stage growth portfolio.

We built the two 11 companies, boom, we had a hundred million. Then we use that on the success of our first bond.  To grow that to a fun, to and attract real solid institutional scalable capital. 300 million for fund two. And you aggregate that with fund one.

And we like to do co-investments with our fund to investors. That's another thing a lot of these guys like to do big call investment dollars. They want you to lead it, that lean on you for the diligence and the expertise for this industry.   

Minnie: Is it  SPV before you've fully raised the fund

Gil: That's exactly right. Or at least that's how we started. we put those into five SPVs that were individually funded 

Minnie: . . And you guys are, you, you are based in,  Santa Monica 

Gil: that is correct.

Minnie: is the fund. Is everyone based in LA?

Gil: We're all based in Los Angeles,

Minnie: Great. Let me just let me change topics entirely. Is 

qualcomm ventures?  I haven't had anyone on the show to talk about Qualcomm , you know, what's the right sort of company for Qualcomm.

Gil: Yeah. So, you know, when I was at Qualcomm ventures, it was, it was for, as you mentioned a little over six years. And when I came there, just to give you a sense where we were at iPhone two,   at that time apps didn't exist.

You know, there was no ecosystem for apps. There were no apps. , but they were just, you know, on platform on device. 

. But at the time when I first came, it was very focused on hardware technologies, chip sets, things of that nature batteries that could really improve the mobile phone and then smart phones blew up, you know, and Qualcomm ventures invested in everything.

Within that space that touched the foam. And that could basically, the purview was, uh, accelerate the adoption of smartphones, accelerate the adoption of Qualcomm chip sets 

, but the purview's still fairly wide there. So no, we invested in zoo we invested in Fitbit, we invested in. Ways, , they don't like to think of themselves as a pure strategic we're only going to invest in, you know, something that's really that we can acquire later this and that part of the whole mantra behind Qualcomm ventures, why it was so unique.

And Y you know, number one investor in mobile over the last 20 years was because it took the position of we're not going to be an invasive strategic, .

Minnie:  When I searched for your name on the internet, it said that you were teaching at general assembly. Is that true?

Gil: You know, I did a couple seminars. I wish I could say teaching. That sounds way cooler.

Minnie: did you do? I teach though? I'm always interested. Like, what were you trying to get across to your students?

Gil: Yeah. At th at that time , I was just trying to. Get people to understand , how to build a thesis in a specific area, and then execute on that. Especially if it's not a core area that you would expect for venture capital firm.

Minnie: Yeah. I mean, I actually hadn't thought about how much overlap there was with agriculture and tech. 

Gil: Neither had I.

Minnie: well now you've been doing it for the past. What five, six years.

Gil: Whoa, and that, you know what that's, how,  my partners,  attracted me to the firm. I saw the opportunity in it. It was way larger than I ever expected.  And food tech in the last five years is absolutely blown up. Everyone's focused on health tech. Now we overlap with, with food and diet, 

Minnie: hmm. That's great. Well, anything else I missed today? Cause this was, I got a lot of great stuff.

Gil: No very wide reaching, but you know, if you, if you feel like, um, you know, contacting me, I actually recently set up a new Instagram account. That's work-focused that's, you know, for people who are entrepreneurs, people who are. You know, potential angel investors, people who want this, this advice in general, I've realized that it's really hard to get exposure directly to a VC, . So I recently just started this apologies for being new and kind of weak sauce right now. But. If you want to contact me , feel free to contact me there.

The handle is at the young VC

Minnie: Awesome. I love it. Great. We'll look for you on Instagram. I'll share it in the show notes. Great. Well, Gil, thanks so much for answering all my questions today. It sounds like so much interesting overlap in agriculture and tech.   I look forward to staying in touch in the community.

Gil: Great. So do I

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