Israeli agtech sector seeks Australian investors

ASX funds and ag opportunities lure Israeli agtech players


Agribusiness
Roots Sustainable Agricultural Technologies executive chairman, Sharon Devir, and his co-founding partner, Boaz Wachtel, in covered cropping areas trialing the company's root zone climate optimisation technology in Israeli.

Roots Sustainable Agricultural Technologies executive chairman, Sharon Devir, and his co-founding partner, Boaz Wachtel, in covered cropping areas trialing the company's root zone climate optimisation technology in Israeli.

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Investor interest in agriculture and agtech services for the industry in Australia is hotting up

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Agriculture’s rising appeal to Australian share market investors is luring fledgling Israeli agricultural technology companies to launch their operations here.

Common climatic challenges and an advanced farm sector culture in both countries are also making Australia an attractive base for Israeli start-ups.

The latest, Roots Sustainable Agriculture Technologies, is in the early stages of releasing a root zone heating and cooling system which has lifted trial horticulture crop yields as much 50 per cent while also reducing protected cropping energy costs by 80pc.

Roots has also developed a crop irrigation method which uses moisture drawn from the atmosphere overnight.

There’s a lot of interest in agriculture and related agtech opportunities to service the industry in Australia, and agtech is a hot subject globally - Boaz Wachtel, Roots Sustainable Agricultural Technologies

The company will list on the Australian Securities Exchange (ASX) later this month.

It has just raised $5 million from an (over-subscribed) initial public offering of 25m shares at 20 cents each.

In February Israeli medicinal cannabis start-up, eSense-Lab also chose the ASX to list its business, following the lead of another Israeli cannabis-related outfit, Creso Pharma, which floated a year ago.

“There’s a lot of interest in agriculture and related agtech opportunities to service the industry in Australia, and agtech is a hot subject globally,” said Roots executive director and co-founder, Boaz Wachtel.

Common farm sector goals

“Agriculture’s challenges in Israel, in particular access to water and sustainable production in difficult environments, are key issues for farmers in Australia too.”

Mr Wachtel said Australia’s appeal as an agribusiness base was also fuelled by the ASX actively encouraging farm sector investment.

He said, of late, retail investors had shown increasing interest in agriculture and the ASX was keen to diversify its business mix away from its a heavy 40pc reliance on resources companies.

Taking his company public on the ASX – the world’s 10th largest stock market – was also easier than a listing through the Tel Aviv Stock Exchange’s more restrictive and “overly regulated” environment.

Agtech investment boom

Demand for investment in agtech has surged in Israel.

Last year Israeli companies ranked as the second biggest players in the agtech investment space, behind US startups and just ahead of China and India.

Just five years ago total global investment in agtech ventures totalled only about $500m, but is now worth about $6.5 billion annually, with Israeli investment alone worth at least $700m.

Mr Wachtel’s enthusiasm for Australia is partly based on his successful ties to Creso’s ASX listing in 2016 and another European-based cannabis research group MMJ Phytotech listed here (he was also a co-founder of both companies).

The Roots business, born eight years ago and a graduate of Israel’s technology incubator program, has focused on managing crop micro climate conditions to accelerate growth in otherwise extreme temperatures.

The two-in-one root zone heating and cooling system uses subsurface coil technology to cool the soil deep under the plant to 12 degrees Celsius in summer and warm it to 29C in winter.

Farmers using our system can sell their crop at a premium at times like this - Dr Sharon Devir

In summer the ground-sourced cooling exchange process promotes cool air around the crop without needing the entire greenhouse or covered area to be cooled to optimal plant-friendly temperatures.

The reverse applies in winter, pushg the growth zone micro climate to about 24C.  

Warm productivity response

Roots executive chairman, Dr Sharon Devir, said the technology ensured growth and nutritional uptake were accelerated in extreme hot or cold temperature periods when crops would otherwise fail to perform.

It had already been installed by covered crop producers in Spain and Israel, and even delicate herb crops had responded well to the artificial climate conditions at the height of an Israeli summer when production would not normally be possible.

“Farmers using our system can sell their crop at a premium at times like this,” Dr Devir said.

“Air temperatures in protected cropping environments in Israel can be up to 50C, but we’ve cooled the root zone down to less than 12C and increased yields by 20pc to 50pc.”

He said about 17 early commercial operations and pilot projects in four different climatic zones had installed Roots’ temperature optimisation technology to trial the system on about 10 different crops.

Installations costs range between $13 a square metre and $20.

“We are not stopping with heating and cooling the plant environment – we’re focused on smart energy use,” Mr Wachtel said

Roots is also trialing its low energy humidity extraction technology to draw moisture from the night air to help irrigate crops during the day.

“We feel there’s a great hunger from investors for this sort of problem solving technology.”

Roots’ Australian board of directors includes Victorian agricultural consultant and specialist in greenhouse production, Graeme Smith, and Sydney-based financial backer and EverBlu Capital chairman, Adam Blumenthal, a director of several ASX-listed firms.

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