The harvesting robots designed by 4AG Robotics can help alleviate labour shortages in the mushroom sector, Cibus Capital’s investment director tells Impact Investor.
Cibus Capital, a specialist investment advisory firm focused on sustainable food and agriculture, and impact venture capitalist Astanor have led a $40m (€35m) financing round for 4AG Robotics, a Canadian manufacturer of agricultural harvesting robotics which has focused on fully autonomous mushroom harvesting.
Driven by rising demand for plant-based diets, the global mushroom market may jump from $66.4bn last year to more than $116bn by 2030, according to a TechSci Research report. But growers in Western markets, where labour accounts for 40% of production costs, are struggling to keep up with demand due to staff shortages.
Harvesting robotics
Although Cibus Capital has made six investments in agricultural robotics, 4AG Robotics is its first in harvesting robotics, according to Archie Burgess, investment director at Cibus Capital. He went on to say that labour currently costs mushroom farmers worldwide around $15bn a year.
“There are huge problems in finding the labour, training it, and then keeping that labour force. Part of the reason it’s difficult is because the dark, cold, smelly and damp environment mushrooms are grown in is just not good for people. That’s driving low retention rates,” Burgess told Impact Investor.
Mushroom farming presents “an enormous opportunity” to use robotics and artificial intelligence not only to lower labour costs, but also to boost yields and product quality, Burgess said.
“A robot can go for 24 hours a day, every day of the year, continuously picking and scanning the bed. If you tell the robot to pick 55 millimetre mushrooms, it will know exactly when each mushroom is 55 millimetres and pick it. Mushrooms grow 4% per hour so if a human picks a mushroom even an hour too early, that is essentially a 4% loss in yield. So it optimises the yield as well,” Burgess said.
Scaling up
The Series B round was also backed by existing investors InBC, Emmertech, BDC Industrial Innovation Fund, the Jim Richardson Family Office and Stray Dog Capital, while Voyager Capital joined as a new investor. 4AG Robotics has raised $58.5m in total to date, including its most recent financing round.
The firm plans to use the money to grow its manufacturing footprint, expand its field service and speed up the development of features like punnet packing, disease detection and AI-driven yield optimisation.
“This funding helps us leap from a startup proving our product works to a scale-up manufacturer trying to keep pace with demand. In just two and a half years, we’ve gone from asking farms to trial our technology to having deposits for over 40 additional robots. As one of the first companies to fully automate the human hand in produce harvesting, we’re ushering in a new era for mushroom farming,” said Sean O’Connor, CEO of 4AG Robotics.
Portfolio companies
When it comes to investing in portfolio companies, Cibus Capital looks at management quality, market size, and product-market fit and typically stays invested for a period of between six and eight years, according to Burgess.
Cibus Capital has previously invested in companies including ISO Group, which makes robotic and AI-driven machines for vegetable and flower producers, soil data measurement company EarthOptics and BeeHero, a precision pollination service provider.
“We are big believers that over time AI is going to be more transformative for the physical world than anything else, especially in agriculture and food, where all the value capture on a farm is through hardware,” Burgess said.
