“Top in Asia in just three years” – Space venture raises 1 billion in the fiercely competitive agriculture and decarbonization market

Sagri, a space venture that develops agricultural services using satellite data and AI, announced on August 8 that it has raised approximately 1 billion yen in a Series A round through a third-party allotment of new shares.

The company has raised funds from a wide range of investors, including independent VCs such as Chiba Dojo and Global Brain, financial VCs such as SMBC Venture Capital and Ikeda Senshu Capital, and individual investors such as Mercari founder Ryo Ishizuka and SmartHR founder and Nstock CEO Noboru Miyata. Global Brain’s fund includes four major CVCs: Shimadzu Corporation, Kirin Holdings, Yamato Transport, and Canon Marketing Japan.

Sagri has beenIntroduced and tested in over 100 municipalitiesWith this funding, the company plans to strengthen its “agriculture x decarbonization” solutions and actively recruit engineers globally, mainly in the field of AI.

“Aiming to become Asia’s leader in agriculture and decarbonization within the next three years”

We spoke to the company’s CEO, Shunsuke Tsuboi, about his fundraising goals and strategy.

Synergies expected by major CVCs such as Kirin, Shimazu, and Yamato

——Please tell us about the outline of this fundraising.

The ticket size for Series A is usually around 50 million yen, so we ended up with a large number of investors, but of the 1 billion yen, Chiba Dojo and Global Brain have invested more than half.

The four CVCs have invested in Global Brain’s fund. In the case of CVCs, they place emphasis on whether there is synergy with the business of the parent company.

For example, Kirin Holdings is very interested in making farmland visible in order to advance Scope 3 decarbonization. They hope that we will be able to make visible where and how the barley used to make beer is grown.

Additionally, there is the possibility of business collaboration with Shimadzu Corporation regarding soil analysis, and since Yamato Transport was founded as a company shipping agricultural products, they have a strong desire to improve agricultural practices, so we believe they have high expectations of us.

–Please tell us more about Sagri’s business, which is the source of this expectation.

We offer four solutions broadly divided into two industries: one is for government, software that streamlines the work of organizations that manage farmers, and the other is software for farmers and agricultural instructors.

Specifically for government use, there is “Akutaba,” which uses satellite data and AI to detect abandoned farmland at an early stage, and “Detaba,” which visualizes crop types.

Every year, the government needs to inspect and record the status of all farmland, but this places a huge burden on staff, from preparation work to on-site inspections and data entry into computers. Akutaba and Detaba can help streamline this process.

However, this alone will only enable us to grasp the actual state of farmland, so we will also need solutions to consolidate farmland.

Precise soil analysis makes it possible to reduce “risingly expensive” fertilizer use

Why is centralization necessary?

There are currently over 1.6 million farms in Japan, but it is said that this number will decrease by half in 10 years and to a quarter in 20 years. In addition, 10% of farmland is currently abandoned.

From the perspective of food self-sufficiency and food security, the existence of large-scale production corporations that can utilize farmland, including abandoned farmland, is essential, and the government is also supporting this. However, Japan has many small-scale farmers and farmland is scattered, so consolidation has not progressed very well.

To improve this situation, we are digitizing the data using software called “Ninataba” and formulating regional plans for efficient farmland matching and farmland consolidation. In some cases, we may even invite farmers from outside the area. Through such consolidation, we are creating an environment in which the next generation of farmers can secure a solid profit from agriculture.

–What about Sagri, the service for farmers?

This is a soil analysis solution that utilizes satellite data and has been deployed since the company’s founding. Soil analysis of agricultural land usually requires time-consuming, analog work of collecting soil, drying it for about two weeks, and then analyzing it using reagents for each item. Sagri makes this possible, but it is now possible to analyze it efficiently.

The reason why we are focusing on soil analysis in the first place is because it is directly related to the appropriate use of fertilizer. Accurate soil analysis allows us to determine the amount and use of fertilizer that is appropriate for the land, which allows us to achieve both cost reduction and environmental load reduction.

–Since the COVID-19 pandemic, the price of fertilizer has skyrocketed, causing prices of all food items to rise.

Japan is not a resource-rich country, so we have to import fertilizer from overseas. This means that we have no choice but to use fertilizer from overseas, which has become very expensive.

In fact, soil analysis has been performed on only about 1% of all farmland in Japan. For the remaining 99%, fertilizer is applied based on past experience without understanding the soil condition. This means that fertilizer costs cannot be reduced, and the environmental impact cannot be reduced.

Japan imports a little over 400 billion yen worth of fertilizer every year, but there is great potential to reduce fertilizer use through soil analysis. If we could reduce costs by 20%, we could reduce costs by 80 billion yen.

Valuable at 4.5 billion yen, already in a “pursued position” in Japan

–There are probably a lot of competitors in the field of satellite data utilization, but what are Sagri’s strengths?

I think our strengths lie in the combination of three things. The first is our ability to handle remote sensing data (measuring the shape and quality of an object without touching it). The second is data science, that is, the ability to process data using AI and other tools. And the third is our agricultural knowledge.

Knowledge of agriculture is especially important, and in order to improve the accuracy of soil analysis, you can’t create a good model without understanding what soil is. We use satellite data released by the European Space Agency (ESA), but we also use actual data from ground sites and build algorithms from that. Our strength is that we combine the three elements of “space data x AI x agriculture.”

With this latest round of funding, Sagri’s valuation has risen to 4.5 billion yen. It is one of the top startups in Japan that is developing a satellite data analysis business, and is in high demand in the country.

–What about globally?

There are several startups overseas that are bigger than us, but that’s because they focus on providing services to large corporations.

On the other hand, we provide services that can be used on small farms as well, because there are more small-scale farmers in the emerging markets we target, such as Southeast Asia.

Models learned on small farms can be applied to large farms, but the reverse is difficult. This is where our strength lies, and we believe that by providing services specialized for emerging markets, we can establish a unique position.