Auckland-Waikato smart cow start-up Halter has defied the venture capital drought - made worse by the recent implosion of Silicon Valley Bank - by raising $85 million in a Series C round.
Halter’s collars are wireless, solar-powered and GPS-enabled, and can be controlled via a smartphone app or PC. They are billed as a way for a farm to go fenceless, instead using audio cues to herd cattle, or train them to stay within a defined area.
Sensors mean a farmer can remotely monitor a herd’s movement and temperature, and identify which animals have health issues or are on their reproductive cycle.
The firm, founded by ex-Rocket Lab engineer Craig Piggott and originally bankrolled, in part, by his former boss Peter Beck, was already the pacesetter on the local start-up scene, with $39m already in the bag.
The $85m round was led by Bessemer Venture Partners, one of the largest American VC firms.
Piggott told the Herald he was first introduced to Bessemer - one of Rocket Lab’s first major offshore backers - through Beck several years ago. It was Halter’s breakthrough performance in 2022 that made the US firm keen to invest.
“Last year alone, we added or trained 100,000 cows. It was that momentum that laid the foundation for the raise.”
New Zealand has a total dairy herd of just under six million, with around four million for beef across just under 50,000 farms, according to Stats NZ figures.
And Piggott also revealed that Halter has recently made its first offshore sales, with a small number of customers in Australia and Ireland. The San Francisco-based Bessemer probably won’t see a lot of Halter’s cow-guiding tech in its home market, given the US propensity for feedlots and dairy barns.
While the capital raising landscape has turned grim overall, Piggott said: “Good companies can still raise money. It was a competitive round.”
Halter was able to pick from a number of suitors. And while Piggott would not give a post-valuation, he said it was more than Halter’s Series B (not a given at a time when there is suddenly a slew of “down-rounds”, or start-ups raising funds at a lower valuation as VCs drive harder bargains for shares).
The Series C round is the latest in a string of successful funding rounds.
Halter’s Series A raise in 2018 brought in $7m from backers including Beck, Peter Thiel’s Founders Fund, Sir Stephen Tindall’s K1W1 and the Chicago-based Promus Ventures (one of Rocket Lab’s early backers).
A $32m Series B round in 2021 was used to boost staff numbers from 60 to 115, and to start piloting Halter’s product on a clutch of Waikato farms.
The company now has 180 employees and has widened the rollout of its smart collars from the Waikato to nationwide, with plans to push overseas.
“Being around Peter was inspiring, he showed you can reinvent an entire industry - and in dairy farming, there are a lot of problems and a lot of opportunities,” Piggott told the Herald after his firm’s last raise. He said Beck still acted as a mentor.
Now, there’s more Rocket Lab crossover, at least in terms of shareholders, with Bessemer leading the Series C round. The US firm is also known for its early investments in LinkedIn (later bought by Microsoft for US$26 billion) and Pinterest (still private) and Twitch (bought by Amazon for US$970m).
The Series C round was led by Bessemer Venture Partners, a Silicon Valley VC best known here as one of the first major overseas investors in Rocket Lab, and in its home market as an early backer of Pinterest and LinkedIn. The raise was supported by existing shareholders including DCVC (another US VC that was an early backer of Rocket Lab), Promus Ventures (ditto) Australasian player Blackbird Ventures (which lead the Series B round) and New Zealand’s Icehouse Ventures.
Icehouse Ventures CEO Robbie Paul recently revealed that Halter is his company’s single biggest punt in its 10-year history, with an investment of “more than $25m”.
“The cows don’t care,” Paul said, when asked about the “big chill” not facing the venture capital sector amid high interest rates, the economic slowdown and now a bout of banking blues.
“They want to be milked. They want to eat good grass. They want to be treated well. As you’re building a product that solves a real problem, in a large and durable market, the day-to-day flow or year-to-year flow of macro conditions don’t matter as much.”
Southland farmer Peter Templeton says Halter saves him more than 2.5 hours a day just getting cows to the milking shed and has “significantly reduced the amount of nitrogen we use”.
Halter is keeping its financials close to its chest. The firm provides its collars to farmers at no cost but charges a monthly fee - which it says varies by herd size - for its software. But its numbers have been sufficiently compelling for Bessemer to write a big cheque.
The smart cow start-up is one of a clutch of firms that have received early financial backing and mentoring from Beck. Others include Partly, which recently staged a record-breaking $37m Series A raise at a $180m valuation and “microwaving metal” 3D printing startup Foundry Lab, which raised $12m in its Series A round.