Tuesday, July 07, 2015

CropX Using Software to Save Water

Israel-based CropX Ltd. (private) has developed a software program to help farmers grow more with less water.  The program delivers data to guide how much irrigation water should be applied to each section of a field in order to optimize crop growth for the least amount of water.  CropX calls their solution ‘adaptive irrigation.’ 

Farmers can download CropX’s mobile app for free.  CropX sends registered farmers a kit of sensors and instructions by mail.  Once installed around a field, the sensors measure moisture and temperature levels in the soil.  Farmers can then make decisions about whether to apply water at the needed level.  There are other analytical tools to help farmers use irrigation water more efficiently.  However, the CropX system is the only one to deliver data on a daily basis, resulting in maximum water efficiency. 

Water supplies are increasingly critical.  Shortages can be found on every continent and around 2.8 billion people around the world at least one month out of every year.  More than 1.2 billion people lack access to clean drinking water.  According to the International Water Management Institute (IWMI), agriculture accounts for about 70% of global water demand for finite water supplies.    

Growing concerns about the adequacy of water is why I believe water efficiency has to be an element of the alternative energy discussion.  Water conservation solutions have long been included in the Efficiency Group in Crystal Equity Research’s Mothers of Invention Index. CropX is now included in the group.

CropX could offer investors exposure to growth in the demand for water conservation.  Unfortunately as a private company, CropX is beyond the reach of all but professional and accredited investors.  The company recently raised $9 million through a Series A financing round, which was led by Finistere Ventures.  Early angel investors, including OurCrowd, also participated.  It is possible that a subsequent capital raise will be needed and this would open the door for more investors qualified as ‘sophisticated.’  Agriculture companies are notoriously late bloomers  -  slow to achieve scale and reticent to issue publicly traded stock.

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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