Toowoomba agtech startup Direct Injection Technologies (DIT) has secured $600,000 in federal grant funding, after seeing its valuation triple to $30 million in the space of six months.
The grant funding, issued through the National Entrepreneurs’ Program, will be used to fast track commercialisation of its animal supplements technology in the live export industry.
It is met dollar-for-dollar by DIT, meaning a total of $1.2 million is committed to the initiative.
The startup uses an algorithm to dispense the right amount of supplements to farm animals in a more efficient way, directly via their water source.
The tech is designed to increase animal welfare and therefore productivity, while also saving farmers money. According to Peart, the solution can reduce the cost of getting supplements to livestock from $0.40 per animal, per day, to $0.08.
In February this year, DIT raised a total of $656,500 in equity crowdfunding — more than 160% of its minimum target.
Since then, the startup has acquired two competitors, and increased its value from $10 million to $30 million, founder Mark Peart tells StartupSmart.
He has also been working on building the team. The business now has a headcount of about 20 people, which Peart expects to increase to 30 or more by the end of the year.
By 2023, he projects DIT will be seeing annual revenues upwards of $217 million.
“It’s been very busy,” Peart says.
“I had a clear vision for the business. I knew exactly what we had to do, and I knew how to execute, so there are no surprises.”
“The right product at the right time”
DIT is also gearing up for another equity crowdfunding round, which he expects to launch in the next 90 days.
All of this capital will help the business capitalise on the “first-mover advantage”, the founder says.
“We’ve seen the opportunity to grow a little bit faster than what we had first imagined,” he explains.
“We’ve got the right product at the right time for the right market, so speed is quite important for us.”
Peart is planning an expansion into Southeast Asia within the next few months, and having boots on the ground there is an important part of ensuring success, he says.
However, the startup also has people in “the most remote areas of Australia”, where there are no competitors in this space.
“It is a frontier for us,” Peart says.
“And we want to own that frontier.”
“The hard part”
Securing this grant funding followed a 12-month application process, and significant due diligence on the government’s part, Peart says.
Part of the application process involves getting endorsement from other players in the sector — in this case, farmers, live exporters, shippers, graziers, farmers and politicians — to prove the business will bring value to the industry as a whole.
In addition, the startup had to match the grant dollar-for-dollar, and has had the ability to do that “with our crowdfunding and revenues to date”.
When founders are looking for industry support, it’s important not to go with your hand out, Peart says.
“We’re putting our skin in the game. We’re putting our money and the federal government’s money into something we think we could innovate and change and make more sustainable and productive,” he explains.
“That’s a big selling point when you go to your customers.”
And, this kind of endorsement is crucial for securing grant funding, Peart adds. It’s important to show that you know your industry, and the people in it, better than anyone else.
“There’s no sense in having a great idea if you don’t know your target market and you don’t know your customers,” the founder says.
“Everyone’s got great ideas … the trick is how you commercialise these things and turn them into businesses,” he adds.
“That’s the hard part.”