Writer: Perry Beeman
For several years, the talk among Central Iowa leaders was about forming two accelerators. The first would work to mold insurance startups in Des Moines, a city that is known as home to some of the giants of that industry.
Once the insurance accelerator was up and running, attention would focus on another leading Iowa industry—agriculture technology. Sometimes confused with incubators, which seek to get a business idea launched, accelerators concentrate on products that are already moving along and need a boost to get to the next level.
Today, the Global Insurance Accelerator, which began its first class in February 2015, can boast about the 18 startups it has helped, seven of them from other countries.
And as you read this, the first training class of the Iowa AgriTech Accelerator, which named former Workiva media worker Megan Vollstedt as its first executive director, is wrapping up.
Driven by the Greater Des Moines Partnership and the Cultivation Corridor, the effort stems from an unusual partnership among seven agriculture giants that have formed an investment fund. Each company pitched in $100,000 for the first year of the accelerator, and together they’ll have 6 percent equity of the companies that enroll in the 100-day program.
“The chance to be involved in the accelerator was exciting,” says Emily Schmitt, counsel for Sheffield-based Sukup Manufacturing Co., one of the corporate partners. “We get unsolicited inquiries from people in the industry [who have] new ideas, and this can steer them. The technology side of ag is going to be taking off. Instead of one company, we have seven focusing on accelerating the technology.”
Companies from across the country, from Florida to Alaska, applied for the inaugural class. The participants chosen include:
- WISRAN (Sunnyvale, California), a software company seeking to improve agricultural productivity and logistics.
- Pyur Solutions (Los Angeles), which makes plant-based agricultural chemicals.
- Rabbit Tractors (Ann Arbor, Michigan), which makes semiautonomous miniature farm machinery.
- Hintech (St. Joseph, Missouri), which makes a corn-stalk remover and crusher.
- Phenomics Labs (Burnsville, Minnesota), which makes portable labs with data collectors to facilitate experiments.
The class started in July, with participants working toward graduation during World Food Prize week in October. Sixty mentors are involved in the effort, and each participating company also has several advisers who work more closely with the firm, according to Cultivation Corridor Executive Director Brent Willett.
Serial entrepreneur and investor Tej Dhawan, who served as interim director of the accelerator, says the mentors are trying to fit several years of advice—the usual time it takes to get to the product launch stage—into a few months. They cover marketing, legal issues, startup logistics and government requirements, for example. Accelerator class members are touring successful startups and other companies, too.
Greater Des Moines Partnership CEO Jay Byers, Dhawan and Willett spent 18 months putting together the ag accelerator. They approached 25 companies to invest, and signed seven: Farmers Mutual Hail Insurance Co. of Iowa, Grinnell Mutual Reinsurance Co., John Deere, Kent Corp., Peoples Co., DuPont Pioneer and Sukup Manufacturing Co.
Byers says the accelerator idea wasn’t always an easy sell among the old guard: “It’s a new concept. An accelerator isn’t what a traditional company does. And you are funding an accelerator with the competition.”
Dhawan says the investors didn’t sign a contract, but the hope is they will commit to at least three years of support.
Success will come in strong sales, return on investment and good buzz, accelerator backers say.
Vollstedt joined the accelerator this past June. “My role is to further ag tech, increase innovation and support startups,” says Vollstedt, who was born on an acreage near Manilla and graduated from Iowa State University in 2012.
The class will benefit from working in offices next to the operations of the Partnership’s Square One DSM accelerator and the insurance accelerator, which will be around to offer advice, too, Vollstedt says.
Byers adds that the companies “are very much focused on the future of agriculture. [It’s] interesting to see how they work together.”
The accelerator staff hopes the budding companies stay in Iowa, Dhawan says: “The real outcome we are working for is a cadre of startups that find success by being part of the community.”