Silicon Valley startups go farming

Agriculture tech is a hot space for venture capitalists and entrepreneurs.

Silicon Valley, often accused of following the herd, is doing that quite literally when it comes to startups building technology for farmers. Some of the most well known venture capitalists and entrepreneurs are now focused on bringing the latest computing technologies — data analytics, cloud computing, mobile apps — to farms.

On Wednesday, farming software startup Granular said that it has raised a new round of $18.7 million in funding from investors Andreessen Horowitz, Google Ventures, and Khosla Ventures. New investors in the round, which is Granular’s second, included Tao Capital Partners, Emory Investment Management, Fall Line Capital, and H. Barton Asset Management.

Granular debuted last year from the split of another startup called Solum that was founded in 2009. Agriculture giant Monsanto acquired the half of Solum’s business that sold soil testing and data tech to farmers and folded it into the data team it acquired in 2013 from data startup Climate Corp.

Solum’s remaining technology, which is software, cloud-services, mobile apps and collaboration tools for farmers, was spun out into Granular. Now Granular’s software is helping a handful of farmers manage their farms more efficiently, using less water and less fertilizer. The tech enables them to tap into detailed data about how their farms operate in real time and, presumably, make better decisions.

For example, Ohio farmer Mark Bryant has been using Granular’s software to manage his farm’s operations, budget, and inventory tracking. Granular introduced its software last year with seven Midwestern farmers who also helped the company design the original software.

Granular is just one of dozens of startups trying to sell tech to farmers. The company is focused on the thousands of big farm owners that account for a third of U.S. farmland. These large farmers are increasingly buying up land from smaller farming operations and are looking for new tools to manage it all.

Not only has the agriculture industry been slow to adopt tech, but farmers are increasingly looking to use tech to reduce their use of water and fertilizer to save money. Water shortages from droughts are expected to become more common. As the world population hits 9 billion in 2050, farmers will have to produce more food, with less resources.

Extreme weather aggravated by climate change is also making farming more risky. Farmers are looking to use more tech to better deal with the potential weather problems.

Between 2013 and 2014, Silicon Valley’s interest in backing agriculture and food-related startups doubled in terms of deal size, according to data from the Cleantech Group. In 2014, 151 startups focused on agriculture and food (not including biofuels, but including some of the on-demand food startups) were funded to the tune of $976 million.

That funding FAST-PACE looks like it will continue this year. In May farming data startup Farmers Business Network raised $15 million from Google Ventures, Kleiner Perkins and DBL Investors. Other farming tech startups include FarmLink, Adapt-N, Farmers Edge, FarmLogs,aWhere, Granular, Farmeron, OnFarm, Agralogics, Blue River Technology and Precision Hawk.

Citation from Fortune : http://goo.gl/BmQ1QB

PAYPAL TO BUY MONEY-TRANSFER STARTUP XOOM FOR $890 MILLION

Wiring money home (especially as cash) can be an awkward, expensive and time-consuming ordeal -- but it's about to get a whole lot easier. PayPal announced on Wednesday that it is acquiring San Francisco-based digital money transfer startup Xoom (no, not the tablet maker) to make "international remittances simpler, safer and more affordable," according to the company's blog. Xoom transferred more than $7 billion for its 1.3 million customers over the 12 months preceding last April, primarily on mobile devices between family and friends. PayPal (which has up to now focused on business payments) hopes to leverage this platform in its planned expansion into markets like Mexico, India, the Philippines, China and Brazil. The acquisition is expected to be complete by the end of the year, assuming it passes muster with regulators and Xoom's investors.

 Citation from Engadget :  http://goo.gl/SjqPZn

VENTURE CAPITAL FUNDS TOTAL TO RS 15,600 CRORE INTO INDIAN STARTUPS THIS YEAR; SURPASSES INFLOW IN ALL OF 2014

MUMBAI: Risk capital investments in India in the first half of this year have surpassed the money inflow in all of 2014, setting the stage for another record funding year as global interest in domestic technology startups peaks.

But the frenetic pace of dealmaking, on the back of increasing smartphone adoption and Internet penetration, is also dragging down funding benchmarks as investors jostle to place bets on the next potential UnicornBSE 0.00 % — industry jargon for a billion-dollar valuation firm.

 Venture capital investors funnelled Rs 15,600 crore, or $2.46 billion, into Indian startups this year till June 26, compared with Rs 14,850 crore, or $2.34 billion, in 2014. They closed 197 deals between January and now, as against 297 last year, at significantly higher average deal sizes, show data from financial research firm VCCEdge.

 "We have just seen a cycle where people are very excited to invest in India Internet, especially mobile, which has unprecedented availability of capital," said Shailendra Singh, managing director at venture capital firm Sequoia Capital India.

"Even for most parts of the world, so much capital has never been available, where a $50-million round is impressive but not surprising. Five years ago, it was a rare event."The expanding deal sizes are driven by the increasing competition in emerging high-demand segments such as local services, online budget stays, food technology and express delivery, where at least half-a-dozen startups are getting venture funded in hopes of becoming market leaders.

"The biggest hope is that you raise so much money that the competition goes out of business, but then you need to grow at a higher pace of over 100% to raise these rounds," said a venture capital investor on condition of anonymity. Entrepreneurs say their aggressive capital raise is a function of the scale they are chasing. For online food delivery application Swiggy, its number of orders has grown 25 times between January and May, reaching more than 2,000 orders a day earlier this month. It plans to expand to 12 cities by the end of this year.

 "Hyper-local deliveries are largely a city-centric concept and no one has expanded beyond 5-10 neighbourhoods or a city, let alone go across double-digit number of cities in one year. In order not to slow down and continue to scale, fundraising continues to be necessary," said Swiggy's CEO Sriharsha Majety. The Bengaluru-based company raised two successive funding rounds in less than seven months, Rs 12 crore and then Rs 105 crore earlier this month.

 Entry valuations have surged

 Overall, 60 technology startups have raised VC funds twice or more in the past 12 months, according to startup research firm Tracxn. With these segments becoming essential components of an investor's checklist, the entry valuations of early-stage consumer Internet and mobile companies have surged 2-4 times in the past two years. Companies offering software-as-a-service solutions have seen relatively moderate valuation increases of 30-50%.At later stages, this is being driven by the rising valuation of US and Chinese companies such as Uber ($41 billion — online cabs), Instacart ($2 billion — grocery delivery) and Blue Apron ($2 billion — ready-to-cook meals).

 "What has changed is that the valuation of global comparables of Indian startups have increased significantly over the last year," said Mohan Kumar, executive director of Norwest Venture Partners India. As a result, the size of the first major institutional investment in a startup, a series-A deal, has increased from $2-3 million to $5-10 million, even as revenue and growth targets a startup needs to achieve to reach this stage have dropped. "Even companies which have 15,000 (mobile application) downloads are getting series A, and 100,000 downloads are getting series B. Earlier, 100,000 was the bare minimum benchmark for a series A," said a venture capitalist with a seed-stage investment firm.

Citation from Economic Times : http://goo.gl/hjLMbK

Several renewable energy power plants in Oman under construction

STAY FOCUSED WITH VENTURE ART

A number of solar power projects are in various stages of construction in Oman. Following the success of solar energy projects in Petroleum Development Oman ( PDO ), Rural Areas Electricity Co (RAECO) and Knowledge Oasis Oman (KOM), now the Public Authority for Electricity and Water (PAEW) is all set to use renewable energy (RE) for various purposes. The solar energy holds the potential to provide sufficient electricity to meet all of Oman's domestic electricity requirements and provide some electricity for export. PAEW, in conjunction with the International Renewable Energy Agency (IRENA), is considering what policy instruments would best help accelerate and support the economic and efficient deployment of RE technologies in the Sultanate. 

According to Dr Mustapha Taoumi, a representative of International Renewable Energy Agency (IRENA), "This region has the world's greatest technical potential for solar power generation." The RE industry could drive economic diversification and create jobs thereby help create wealth and added value to local economies. In order to facilitate the transition to a RE systems, IRENA has been working closely with Oman on a range of projects. RAECO proposes to set up four solar power plants -- in Ibri, Sharqiyah, Mudhaibi and Dhofar -- as pilot projects with a view to efficiently utilise renewable energy and thus reduce use of fossil fuels. Except for the Dhofar plant (500 kilowatts), other will be of 2,000 kilowatts each, according to Khaleel al Mandhari, who heads RAECO Renewable Energy Department. 

Similarly, a solar power project with a maximum authorised capacity of 303 kilowatts, is coming up at Al Mazyunah in the Dhofar Governorate. The PDO is already using solar energy to produce a daily average of over 50 tonnes of emission-free steam that feeds directly into existing thermal Enhanced Oil Recovery (EOR) operations at its Amal West field. There are several plans by PAEW and other organisations to capitalise on the abundance of sunshine. According to the recent '7-Year Statement (2015-2021)' of Oman Power and Water Procurement Company (OPWP), work on one or more solar-based power plants with an aggregate capacity of up to 200 megawatts (MW), may be initiated this year. 

Oman holds a huge potential for harnessing renewable energy and is keen to benefit from its several advantages such as reduction in use of fossil fuel, enhanced energy supply security and reduction in pollution. IRENA is extending cooperation in developing a business model to introduce Renewable Energy in all the sectors of the Omani economy particularly in the electricity sector, manufacturing sector and SMEs to accelerate jobs creation and added value to the local economy; desalination through Renewables (remote areas); and capacity building programme. Dr Mustapha says all GCC countries are embarking on a transformation, by turning to renewable energy for it can help meet rising domestic demand, economically and sustainably. 

Four years of successful real time continuous technical monitoring of the 6MW/year concentrator photo voltaic (CPV) demonstrator at KOM has given positive results such as cost-effectiveness, high yield energy production, and minimal water and maintenance requirements. Since May 2010, when the PEIE initiated this pilot project for R&D to test the validity of the CPV solar technology, the project has generated important data which has been assembled and integrated to create valuable knowledge about this application, a PEIE expert affirms. PEIE has also performed financial studies for CPV and PV applications on larger scales and the price has been between 70-80 baisa per kWh which is highly feasible and competitive and can even be lower than the cost of fossil fuel specifically for remote and rural areas when the subsidies are included in cost calculation. 

At a workshop involving several stakeholders from ministries, SQU, PEIE, and electricity distribution companies, it was revealed that the real price of electricity production per kWh and distribution to the customer, excluding subsidies, would be between 80 and 120 baisa per kWh for gas-based plants in Muscat governorate, and that for remote rural areas the cost of electricity production from diesel can exceed 150 baisa per kWh. "If the calculations generated from the workshop are appropriate the cost of utilising solar energy will be equal or even cheaper than gas-based plants and for sure much cheaper for remote and rural areas", said a PEIE official.

Citation - Taken From ZAWYA :  https://goo.gl/wdDvsf

Saudi Arabia Opening for Investment

Infrastructure Projects in Saudi Arabia: Getting qualified

By Daniel Goodwin - d.goodwin@tamimi.com

With the Kingdom of Saudi Arabia (KSA) rolling out a succession of major public infrastructure projects in recent years, KSA's foreign investment policy makers have made it clear that they are keen to see more foreign participation in those projects. As the economic powerhouse of the GCC with a strong pipeline of work in the years ahead, KSA is on the radar for foreign contractors looking to expand in the Middle East. Often, to be eligible to bid for these larger projects, a contractor must be pre-qualified.

Pre-qualification for government contracts in Saudi Arabia

Pre-qualification is used to identify contractors who have the necessary experience, know-how and resources to successfully carry out a particular scope of work or project.

Looking to Opportunities in GCC

In KSA the pre-qualification process, where utilised, is itself a competitive tender process and is governed by the Government Tender and Procurement Law ("GTPL") and its implementing regulations ("GTPR").

The specific requirements for pre-qualification for government tenders vary between different government agencies and also from project to project. Generally for government projects the GTPR mandates that contractors must:

• Have a Commercial Registration in KSA. For foreign contractors this first requires a licence from the Saudi Arabian General Investment Authority ("SAGIA").
• Be registered with the General Organisation for Social Insurance.
• Have a tax or zakat certificate.
• Have a Saudization certificate.
• Have a certificate of membership of the Chamber of Commerce.
• Be registered with the Ministry of Labour.
• Have a requisite Contractor Classification issued by the Ministry of Municipal and Rural Affairs ("MOMRA") to carry out the work required. This will depend on the type of work specified and the value of the contract.

Generally, though it may vary between various government entities, other pre-qualification requirements may require the contractor to:

• Have no conflict of interest (including for any proposed subcontractors).
• Have no recent instances of contractual non-performance (which could be within say the past five years).
• Meet required financial levels, provide audited financial statements, and be solvent with no recent history of liquidation, bankruptcy or defaults (say within the past five years).
• Have certain annual turnovers (depending on the project requirements).
• Meet specific experience requirements depending on the precise nature of the project.
• Declare any fees, gratuities, payments or inducements paid to any party in respect of pre-qualification or the bidding or tender process.

Streamlined processes for foreign contractors
A foreign contractor that does not have a commercial presence / registration in KSA may still qualify to bid for a government contract.

The recent Council of Ministers Resolution No. 405, released in August 2014, applies to contractors in the areas of: construction; roads; water and sewage works; implementation of works for water conveyance; desalination plants and electric power; electrical, mechanical, electronic, industrial and marine works; and communications technology.

This resolution allows contractors that are licensed as first class in their home country, or certain 'well known' contractors, to obtain a temporary certificate from SAGIA allowing the contractor to bid on government projects (but only one at a time). The contractor may then fulfil the other requirements (set out above) after it is awarded a government contract.

If successful in being awarded a government contract, the foreign contractor must establish an entity in KSA and obtain a temporary commercial registration. A temporary commercial registration licence must be applied for within 30 days of the date the contract is awarded and a copy of the award letter or the project execution contract signed by the government authority must be submitted to SAGIA.

A temporary commercial registration licence from SAGIA:

• Will be limited to the activities necessary to carry out the project awarded by the KSA government authority.
• Will be limited to a time period linked to the expected duration of the project awarded by the KSA government authority.
• Will be linked to the KSA government authority that awarded the project.
• Must be renewed every 12 months and the consent of the KSA government authority that awarded the project is required.

As a further refinement, a foreign contractor classified in the first class in its country, or which has implemented a project with a value of not less than SAR500 million, has not less than 2,000 employees and total assets of not less than SAR50 million, can apply for a SAGIA licence using the recently introduced Fast Track process. SAGIA states that the Fast Track system allows a licence to be issued in as few as five days from acknowledgement of a completed application.

Joining a consortium to bid for contracts in KSA

A consortium is essentially an agreement between a number of parties to undertake a joint venture. If a foreign entity is a joint venture partner it must hold a SAGIA foreign investment licence and a Commercial Registration issued by the Ministry of Commerce and Industry. Usually (but not always) the consortium will establish a KSA limited liability company to execute the contract. A consortium intending to bid for a government contract will be required to submit a copy of the consortium agreement.

For a foreign contractor bidding for KSA government contracts as part of a consortium, there may be a need for the foreign contractor to have a KSA SAGIA licence, depending on the terms of the Request for Proposal or Tender. Some may require KSA registration first, others may not. The SAGIA licence will need to be obtained by the new JV company (if there is one) otherwise it must be obtained by the foreign company setting up an entity in KSA as part of an unincorporated consortium.

Pre-qualifying for private sector contracts

Tender and pre-qualification processes for private sector contracts in KSA are not governed by specific laws.

Requirements for pre-qualification issued by private companies in KSA (other than government procurement) vary depending on the level of sophistication of the company, whether the company has experience in carrying out similar past projects, and the value and complexity of the work. However, most of the information required for government pre-qualification is generally also requested in private sector tenders.

Other pre-qualification requirements may include:

• Past occupational health and safety record.
• Any ISO or similar compliance.
• References from past employers, head-contractors or sub-contractors.
• A requirement to provide a financial guarantee / bond.

It may be a pre-qualification requirement that all bidders already have a KSA established entity.

Inducement of government officials

KSA has laws that keep the tender process transparent, fair and free from impropriety.

The Anti-Bribery Law 1992 makes it clear that the receipt of any benefit or advantage (financial or non-financial) concerning any government official would be considered a bribe and includes a promise, gift, bounty, favour or recommendation.

Prohibited circumstances include not only when officials demand a bribe for themselves or another person for performing their normal duties (or abstaining from performing such duties) but also receiving what is deemed to be a bribe without demand by the official concerned.

There are severe penalties for bribery, which vary according to the severity of the circumstances. The most severe penalties are 10 years imprisonment and/or a SAR1 million fine. The lesser crimes still carry imprisonment penalties of up to 3 years and/or a fine of up to SAR100,000.

Bribes or inducements in the private sector are illegal under Shari'ah principles.

Conclusion

Qualifying as an approved bidder is the first part of the tender process and contractors now have a more streamlined way to qualify as a bidder in KSA.

The willingness of the government to bring in more streamlined processes for contractors entering KSA is a reflection of the significant amount of work being carried out and the need for experienced foreign contractors to bring their know-how and resources to implement projects in the Kingdom of Saudi Arabia.

With the continued rollout of world class infrastructure projects across the Kingdom, the demand for foreign contractors and suppliers will remain strong in the years ahead. Knowing how to pre-qualify to tender on those projects is an essential first step for any contractor looking to win tenders in KSA.

© Al Tamimi & Company 2015

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