In May, machine vision technology developer Prospera Technologies announced it had been acquired by Valmont, a global leader in designing and manufacturing products and services for infrastructure development and agricultural productivity. For Prospera Co-Founder and CEO Daniel Koppel, the $300 million acquisition marked a major milestone in a journey that started with the dream of revolutionizing the agriculture industry.
“I got into agriculture by accident,” says Koppel. “I come from a tech background, but I found this big gap in the agriculture industry and said let’s go build something to change the world.”
On March 16, 2022 Koppel shared his journey at a Founders Network keynote presentation. As part of the event he’ll detail what makes Prospera’s startup journey unique, the company’s go-to-market strategy, and how the lessons he’s learned can benefit other startup founders.Most investors at the time didn’t really understand our approach. Click To Tweet
A unique approach
Founded in 2014, Prospera set out to use the power of artificial intelligence to make agriculture more predictable. In order to test their technology, Prospera first applied AI to greenhouse growing environments before testing in open fields.
“Growing crops is more complex than one might think. It’s complicated because there are biological and chemical systems involved,” Koppel says. “Seeing this complexity, we knew it would be a huge challenge. We saw the greenhouse as a great candidate to be our lab because the greenhouse environment is more controlled than an open field environment. We thought, we’re tackling a big challenge, let’s start where it’s a bit easier.”
While the decision to start with greenhouses made sense for the agriculture industry, the go-to-market strategy wasn’t an approach that initially aligned with traditional startup journeys involving venture capital funding.
“Most investors at the time didn’t really understand our approach. It was counter to classical VC which is all about showing a huge market,” Koppel says. “When you ran the numbers, the market wasn’t really big enough. But for us it was about proving it works for ourselves before we go to another market that is more complex. If it wasn’t going to work here, it wasn’t going to work anywhere.”
However, Prospera’s decision paid off. Today, the company uses artificial intelligence to provide actionable, easy-to-read insights to growers via real-time crop analysis and anomaly detection solutions.
“As we got validation on the tech side and traction on the business side, that’s when we raised more capital and hired a larger team,” Koppel says. “Once we were more confident we said lets target the bigger challenge of open fields. We used a lot of the tech stack we already built in greenhouses and that helped us a lot when we went to open fields.”As we got validation on the tech side and traction on the business side, that’s when we raised more capital and hired a larger team. Click To Tweet
Understanding your market
While Prospera’s trajectory might not have aligned with traditional venture-backed startup journeys, it made sense for the agriculture industry. That’s why Koppel says startup founders should develop a deep understanding of the industry they’re operating in and tailor their go-to-market strategy accordingly.
“The fact that agriculture is so different from other industries was the biggest challenge and is still the biggest challenge that you can have trying to build a tech business,” Koppel says. “The agriculture industry is extremely different from some other industries. The value chain is very complex. It’s very much relationship based. The industry is seasonal because growers grow by season so the sales cycle is seasonal. So that’s very difficult for a company that is working towards a SaaS sort of model.”
The uniqueness and complexity of the market informed much of Koppel and the Prospera team’s go-to-market strategy. Ultimately, it also led to their decision to partner with Valmont.
“We realized we weren’t going to be able to build our own brand in agriculture because agriculture is a very traditional, relationship based industry with not many brands,” Koppel says. “Based on that, we decided to go with more of an OEM style go-to-market as opposed to going direct. So it was more like a B2B2C sort of thing. As we grew that business, our relationship with Valmont, which was one of the OEMs, strengthened. We saw a path where instead of going towards an IPO, we could keep our independence within this company and go through scaling the business and growing the company through an M&A transaction.
“Today we have even bigger plans than before. The team has grown, the business has grown and so far the M&A has been extremely successful.”Be smart about financing the company and valuations. Click To Tweet
Recipe for success
Koppel attributes Prospera’s success to the company’s team. He founded Prospera alongside Raviv itzhaky and Simeon Shpiz and since then the trio has brought together a team of like minded professionals committed to Prospera’s mission.
“The fact we are trying to do good for the world, and that the technology of the company is aiming to feed the world, has been a driver for getting incredible talent,” Koppel says. “We’re able to have the smartest and most passionate people in the world join us and I think that’s the strongest thing we have. I’ve learned throughout the years that the team is more important than anything else.”
Koppel also attributes Prospera’s success to guidance he received along the way. Financing can be one of the biggest challenges a startup faces, but thanks to advice Koppel received, his team was able to make smart funding decisions throughout their journey. He says a lot of tech startups today are valued extremely high, which can lead to challenges later on.
“Be smart about financing the company and valuations. Finance the company in the right way,” Koppel says. “We raised at the right time. When we were in doubt, we got debt. Ultimately when we look at the history of the company, we didn’t get greedy in valuations. That helped us a lot I think.”
In his keynote presentation Koppel will cover:
- His personal background and why he founded Prospera along with Raviv itzhaky and Simeon Shpiz
- Prospera’s journey from applying AI in greenhouses to open fields. Successful applications and learnings
- The partnership with Valmont – how it came to be and it’s progression to the recent M&A
- Vision for the future of the company
- Advice for others building a startup regardless of industry