"Data competency is crucial for KWS"
Interview with Dr. Alexander Wiegelmann, KWS SAAT SE
As vice president of M&A / Head of Transactions, one of Dr. Alexander Wiegelmann's responsibilities at KWS SAAT SE is engaging with startups - from promoting collaborations through to proposing and commencing acquisitions.
By what criteria does KWS SAAT select which startups they would like to partner with? What are the dos and don'ts when it comes to these types of collaborations? We took the opportunity to discuss these points with Dr. Alexander Wiegelmann in the run-up to Farm & Food 4.0, which will be taking place in January 2019 in Berlin.
What role does data competency play in your company's choices when it comes to potential candidates for takeover or collaboration?
Dr. Alexander Wiegelmann: "Data competency undoubtedly plays an increasingly important role, specifically in the start-ups space, where clear distinctions must be made between the existing business models in the agricultural sector.
In the field of alternative- or biological crop protection, one comes across both non-digitised and highly digitised companies, with both models having proven to be successful. In the selection of micro-organic consortia, for example, the highly digitised group relies on big data analyses mediated by artificial intelligence.
On the other side of the spectrum, business models in precision farming sectors and online platforms, as well as those in the areas of synthetic biology and smart breeding, are based on pure data competency. Artificial intelligence, therefore finds a perfect application, specifically in the agricultural industry: enormous amounts of data exist, and the barriers to market entry are lower than they are in the healthcare industry.
Providers of investment funds can however, also differentiate themselves with data competency, thereby qualifying themselves as collaboration partners. To summarise: the issue of data competency is, with few exceptions, a decisive selection criterion. It also enables a traditional corporation like KWS to open up new areas of activity, making economies of scale possible".
Which sectors do the startups that you currently judge to be the most interesting for your company come from? Which trends are important for you?
"Of particular interest are companies working in the sectors of alternative crop protection - as mentioned, breeding and also niche crops are naturally of interest - i.e. crops with relatively scarce worldwide cultivation. These areas also reflect the overriding trends that are strongly driven by increasing regulation regarding crop protection on the one hand, and by the effects of climate change on the other. In addition, global population growth means greater diversification and breeding solutions are required.
The development of additional agricultural land could also broaden the portfolio of useful crops. After all, consumers in developed countries demand not only a balanced diet, but also a varied one, which makes niche crops more relevant."
How would you describe the dos and don'ts when it comes to working with startups?
"Most dos and don'ts vary depending on the partnership. Fundamentally, we want to be a partner for startups and grow together. In this sense, we understand the "dos" to be: the development of useful communication channels between respective experts, the development of reliable framework conditions for the active fulfilment of obligations regarding inspection and supervision, the best possible support for corporate development and business initiation, and the focus on contractual conditions that sustainably strengthen the incentives for cooperation.
At the same time, we consider a "don't" to be defining the expectations and guidelines for start-ups too precisely, to the point that entrepreneurship may be impaired and partners may be forced to make unpredictable decisions. Of course, the chosen startups should also share our principles of partnership."
Why is Pioneering AgTech an exciting and relevant format, and what do you expect to gain from taking part?
"Pioneering AgTech is an innovative concept that targets the underrepresented areas of seed financing and start-up collaborations in German-speaking countries. This demand is particularly significant for companies and corporations in the agricultural sector.
At the same time, the variety of AgTech concepts for promising business models has never been greater. As an innovative platform, Pioneering AgTech can help close this gap. The fact that start-ups can come here and meet established companies face-to-face in a moderated setting will provide valuable inspiration, new ideas and diverse forms of value creation."