I met Steve Booher at this year’s Innovation Showcase, where his company, Smart Guided Systems, took second place in a strong field of Hoosier startups. Smart Guided was one of the most mature of the presenting companies with nearly $2 million in sales projected for 2021 and an expanding global presence in a very clearly defined agriculture segment: tree nuts and fruits. I was really impressed with Smart Guide System’s traction and how they are honed in on the global demand for more sustainable farming practices. I invited Steve to meet with VisionTech’s Screening Committee, and we all agreed he and Smart Guided Systems should present at our October pitch events. Here’s a preview.
BP: Smart Guided is not your first startup. Tell me a little about your career.
SB: Even as a kid, I wanted to be an entrepreneur. I started my career with a Fortune 500 company and after four years, knew I didn’t want to work there forever so I left. My first company, CAD Design, grew to 25 employees and when it was acquired by a public company, I became a multi-millionaire at age 32. I founded and sold two more companies before getting back in the engineering services industry, eventually exiting with a 10x EBITDA, all-cash deal. I’ve been honored to receive the Growth 100 Award from the Johnson Center for Entrepreneurship and Innovation, part of Indiana University’s Kelly School of Business, an unprecedented 11 times for four different companies.
BP: How did Smart Guided Systems come to be?
SB: Smart Guided Systems was founded in 2014 here in Indianapolis. Prior to that I’d been working on a project with Kubota using GPS to develop a steering path for tractors. At the time, I didn’t know what agtech was. Kubota said, “If you can develop it, we’ll buy it.” The project took two years to complete, but we got it done. That put us on the map as an agtech company. We next developed a golf course sprayer technology that could be retrofitted onto existing sprayers. After that, we got involved with Ohio State University and the USDA. They had a CRADA grant to develop a spray system to reduce pesticide use. What was great is we didn’t have to pay licensing fees or royalties on any of the tech we developed as part of this project, and we had exclusive rights. The technology we developed during this time became the foundation of our Intelligent Spray Control System™ and the Permanent Crop Analyzer™ that are now on the market and ready to scale.
BP: What pain points did you see in the agriculture market and how are you solving them?
SB: The core problem is growers are spraying their orchards with the same equipment and processes they’ve used for 30 years. Pesticides are applied in a shotgun approach so there’s a lot of drift of chemicals beyond the trees and into other fields and potentially into groundwater. Pesticides are closely regulated, and regulations will likely increase. These old methods of spraying just aren’t going to cut it. With our Intelligent Spray Control System™, we deliver the pesticides with laser accuracy based on actual density to the trees, or in the case of vineyards, to the vines. Not only does this dramatically decrease drift, but it can also reduce pesticide usage by 50% on average. We also reduce water usage by 50%, which is a significant benefit particularly in states like California that have limited water or drought situations.
What’s interesting is our process also makes organic pesticides more attractive to growers. Organic pesticides are expensive. However, by reducing the amount of pesticides required to treat an orchard, the spend is cut, too, making organic pesticides more affordable to growers.
Lastly – and this is a major point – Europe is requiring a 50% reduction in pesticide use by 2030. We think our solution will help European growers achieve this benchmark immediately. We’re currently working with a company in Switzerland to validate our technology.
BP: What makes Smart Guided System’s solutions unique?
SB: Both the Intelligent Spray Control System™ and the Permanent Crop Analyzer™ are on trend with the growing demand across the world for more sustainable farming practices. What’s truly transformative is the data collection, analytics, and insights we can provide that help growers track the growth and health of their trees and vines, base their spray cycles on this data, and even identify trees that aren’t producing as they should. Our solution, which will continue to be enhanced, really puts fingers on the pulse of orchards and fields using data, something growers have not had. You should check out our videos.
BP: How has the market responded?
SB: John Deere loves what we’re doing and has signed an Allied Distribution Agreement in December 2021, which opens up relationships with John Deere dealerships around the world. We’ve signed up most of their dealer locations in Australia and a number of dealerships in the U.S. and Canada are onboard. We’ve got traction with distributors in Australia, Chile, India, New Zealand, Peru, and just signed a 20-location dealer in South Africa. We’re also in discussions with a number of OEMs. The market definitely likes what we’re doing and wants to be involved.
BP: How big is the market?
SB: We worked with an agriculture research group and were able to get a deep understanding of the market in terms of major fruit producing countries, what they’re growing and volumes. The U.S. fruit and tree nut growers represent a $1 billion retail market for our Intelligent Spray Control System™. We’ll be concentrating our efforts in 15 key states in the U.S. that have the largest concentrations of growers and sprayers. California is half of the market so a lot of attention will be placed there.
BP: What’s your revenue model?
SB: There are two parts to the equation, one-time equipment purchases and the recurring revenue from our data solution.
BP: Any competitors?
SB: Not at this time. We are the only company with a real-time LiDAR density-based spray system that adapts to new or existing sprayers to replace 30-year-old processes. We are first to market with major, major benefits, which is why we want to move as fast as we can and gain as much market share as possible.
BP: What’s your exit potential?
SB: Our immediate focus is growing global market share, but think we’ll be positioned for an exit in two to five years. Potential acquirers include the major agriculture equipment companies or an agtech company.
BP: How much are you planning to raise and what will the proceeds be used for?
SB: We are looking to raise between $3 million to $10 million to rapidly scale the company and grow as much market share as we can in the U.S. as well as globally, starting with Europe. That’s going to take a lot of cash. First, we need working capital to support growth. We’ll be making key hires such as field sales, engineering and customer service. We plan to strengthen our international IP and secure the CE mark in Europe, which affirms our conformity with European health, safety, and environmental protection standards. This will expedite our expansion in Europe. Finally, we are upgrading our businesses systems and marketing efforts.
BP: Why should VisionTech Angels invest in Smart Guided Systems?
SB: Obviously, I believe in what we’re doing. Here are three reasons. Our early traction is strong; we’ve sold 140 systems in eight countries and having John Deere’s stamp of approval gives us global clout. People know who we are and are interested in what we can do for them. Second, I’m a big believer in people and we have an excellent team. We recently brought on Jerry Johnson as our president and CEO. Jerry has extensive experience in the ag industry, including ten years as president of Blount International’s Farm, Ranch and Agriculture division. Jerry had 11 plants domestic and international plants, 600 employees, plus startups in Brazil, Europe and Australia under his control. Our chief engineer, Gary Vandenbark, has been with me 25 years through a number of successful companies and exits. Our CTO Mike Hilligos is one of the best and brightest. Finally, we have a lot of OEM and strategic partnership opportunities, which is where I am directing my energy.
To learn more about Smart Guided Systems, visit their website. VisionTech Angels’ October Pitch Events will be virtual on Thursday, October 28 at Noon ET and at 6 p.m. ET. Pitch events are open to our members and accredited investors interested in joining our group. To register, check your email for an invitation, go to our Events page or email Ben Pidgeon at bpidgeon@visiontech-partners.com.