Blue River Technology has been acquired by John Deere* for $305 million. The acquisition of the Silicon Valley artificial intelligence and farm equipment making startup by farming’s largest equipment manufacturer (Deere), is a great success story with a bit of a twist.
The Story
Two Stanford graduate students, Jorge Heraud (the former head of precision agriculture at Trimble*) and Lee Redden (a PhD student and roboticist), met while taking a 2011 Lean LaunchPad course during which they decided to partner to make farming more sustainable through robotics, machine learning and computer vision. They built and tested their idea in California’s Central Valley with support from friends and family and a grant from the National Science Foundation (NSF) and founded Blue River Technology.
Since then Blue River raised an additional $30 million from a variety of venture funds including Stanford Angels and Entrepreneurs and Steve Blank, the person that taught the Lean LaunchPad course at Stanford. Heraud and Redden’s startup has grown to 60 persons and is thinning and weeding more than 10% of U.S. lettuce production which they are providing for farmers as a pay-per-acre service.
Blue River has honed their See & Spray and Sense & Decide devices to analyze every plant in a field and apply herbicides only to weeds and overly crowded plants needing thinning thereby dramatically reducing the amount of chemicals used. Their robots are towed behind a tractor similar to conventional spraying equipment but Blue River’s towed implements have onboard cameras that use machine-learning software to distinguish between crops and weeds, and automated sprayers to target and spray the unwanted plants. They use special lighting enabling 24-hour operations. Further, Blue River devices have a second set of cameras to automatically check its work as it operates and to gather data on the tens of thousands of plants in each field so that its analytics software can continue improving the devices and the process.
Quoting from a recent Inc magazine article:
Like many other companies faced with spending time, energy and money on manufacturing their products as they scale up to the demand for their services, Blue River decided to focus on their expertise in AI, vision and phenotyping rather than building the equipment… a job better suited to John Deere.
Deere, with 2016 revenue of $26.6 billion, makes and sells tractors and farm implements, plus mining, forestry and construction equipment globally. 78% of their revenue is farm and forestry related according to their 2016 Annual Report.
Most of their Deere’s farm tractors are fitted with self-steering kits that enable sub-inch accuracy. But equipment sales have steadily declined for Deere: $32bn in 2014, $26bn in 2015 and $23bn in 2016. This acquisition underscores the immense value placed on the new AI and vision systems companies such as Blue River.
Daniel Theobald, Founder and Chief Innovation Officer at Vecna, a Cambridge, MA provider of mobile robots, platforms and remote presence devices, said:
“It’s a smart move by Deere. They realize the time window in which ag industry execs will continue to buy dumb equipment is rapidly coming to a close. The race to automate is on and traditional equipment manufacturers who don’t embrace automation will face extinction. Agriculture is ripe for the benefits that robotics has to offer. Automation allows farmers to decrease water use, reduce the use of pesticides and other methods that are no longer sustainable, and helps solve ever worsening labor shortages.”
Other examples of high-tech AI startups being acquired or joint venturing with a hardware manufacturing partner include:
- FastBrick, the Australian startup developing a brick-laying robot, needs a crane arm to reach where the bricks are to be laid. Rather than making that mobile crane themselves, FastBrick has joint-ventured with Caterpillar.
- Seegrid, the Pittsburgh-based provider of vision-guided systems (VGVs) for forklifts, initially built their own forklifts but nowadays provides the vision systems hardware and software for off-the-shelf electric-powered forklifts. Once transformed, the VGVs perform warehouse tasks such as Put Away, Replenishment, Long Haul, and End of Line (where the finished product is taken to a shipping dock).
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- John Deere and Trimble are two of 83 members of the ROBO-Global Robotics & Automation Index of which I am a co-founder. The index is designed to leverage advances in technology and macro economic drivers to capture growth opportunity from robotics and automation.
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