New Brunswick data processing company announces $11-million Series B funding round; locates a U.S. office near Silicon Valley
A Fredericton company that uses image processing algorithms to help farmers protect their crops is announcing an $11-million (U.S.) Series B funding round Wednesday.
Backed by a number of venture-capital firms and strategic corporate partners – including New Brunswick's own McCain Foods Ltd. – Resson Aerospace Corp. will rev up research and development, build sales operations, and open an office in San Jose, Calif., hoping both to partner with Californian agricultural universities and to leverage its technology to assist with the state's drought problems.
"This is truly global," said Jeff Grammer, Resson's executive chairman and an early investor through his firm Rho Canada Ventures. "If you look at McCain, they basically have potato acreage worldwide. They're looking at this as a much wider program than just New Brunswick."
The $11-million figure, worth about $14-million Canadian, would make the deal one of the biggest early-stage funding rounds in the Atlantic region since the financial crisis, according to data provided by Thomson Reuters. Contributing to this round are Rho Canada, McCain, Halifax's Build Ventures, Saint John's East Valley Ventures, the New Brunswick Innovation Foundation, BDC Capital, and lead investor Monsanto Growth Ventures, the venture-capital arm of seed company Monsanto.
"We were quite impressed by the drive that they have, the uniqueness of what they're trying to do, and the level of sophistication they're trying to get to," McCain chief executive officer Dirk Van de Put told The Globe and Mail.
Resson raised $3-million in 2014 in a round led by Rho Canada and Build. The company, based in a National Research Council complex on the University of New Brunswick's Fredericton campus, was the brainchild of two UNB students – Peter Goggin, its CEO, and Rishin Behl, president and chief technology officer – and launched in 2013.
Using photos of crops – from tractor cameras, drones or satellite imagery – the company has developed image-processing technology that, combined with ground-sensor data, uses large-scale cloud-based data processing to help farmers assess crop production and field conditions. "Using their algorithms on the imaging side and what's happening in the dirt itself, they're able to do predictive analytics," Mr. Grammer said. "It helps a farmer understand what diseases could be coming to their farms."
Eventually, he said, the technology could be harvested to help farmers achieve maximum return on investment for their businesses, such as by helping farmers figure out how much water or herbicide they should use on a given field.
This, Mr. Van de Put says, is crucial for the future of farming, starting with potatoes, McCain's specialty. "We are trying to optimize agriculture as it relates to potatoes – meaning using as few inputs as possible, like [not overusing] water, pesticides, fertilizers and so on, and their technology will help with that," he said.
At the moment, Resson plans to work with large-scale farmers – such as McCain, which was Resson's first client. McCain will test the technology on its farms this year, and will try to refine it to optimize potato yields and lower costs. Wider implementation across McCain-affiliated farms will happen after that. Going forward, Resson's leadership hopes to expand to small and mid-sized farms.
Resson has about 15 employees and plans to double that over the next couple years. As the company expands, its research and development will stay headquartered in Fredericton, but the San Jose business office will allow it to expand potential partnerships. "We hope to work with universities, as we've done in Canada, to work on solving some of the problems California has in agriculture," Mr. Grammer said.
Most of the region's venture deals are in the ICT sector, with agribusiness rarely accounting for more than one or two a year. Atlantic Canada saw $66-million in venture investments in 2015, that number having more than doubled since 2013, according to the Canadian Venture Capital and Private Equity Association (CVCA).
The East Coast region is a drop in the bucket of Canada's venture-capital ecosystem – worth nearly $2.3-billion last year – but it is growing, said CVCA chief executive Mike Woollatt. "When you talk about doubling in the last couple years, obviously it's headed in the right direction," he said.
Mr. Grammer, who cut his teeth in Silicon Valley and – while commuting each week to Canada – lives in San Jose, said he sees some parallels between his home and where he is sending his dollars. "What makes Silicon Valley so successful is the fact you have a lot of infrastructure in big IT segments," he said. "You have a knowledge base, a funding base, and strong university ties. For me, I believe there's no reason why Atlantic Canada can't do the same thing."