With several different business experiences Matija Žulj, CEO of Agrivi, has woven his entrepreneurial path. Initially, he worked as an electrical engineer in various companies, some as a manager, then he was a grower cultivating blueberries, before turning to the development of new technologies in agriculture and founding Agrivi, whose software is used by several of the world’s largest companies.
As an agritech expert, the European Innovation Council has engaged Žulj as an ambassador to promote the use of technology in agriculture.
What are your obligations as an ambassador in the European Innovation Council (EIC)?
– I represent the agritech sector. The European Innovation Council, besides investments, wants to strongly encourage innovations in technology in agriculture. According to the number of applications and innovations, agritech is a less represented area, and it is very important for them to strengthen it, and Agrivi is among the few agritech companies that have received funding and they asked us to represent the EIC in the agritech sector as ambassadors. Our role is promotional: we talk about the benefits of the EIC, access to funding, what companies can gain from it, and we motivate them to apply.
What is the technological potential of Croatian agritech?
– Until recently, Agrivi was the only one in that niche, along with perhaps two or three other companies that were trying in digital technologies in agriculture, but in the last few years, more and more such companies are emerging. For now, they are still in early stages.
Can they compete for money from the EIC?
– The funding mechanism covers everything from early ideas, prototypes, market prototype research to scaling and acceleration. We received funding from that last phase since we submitted a project that passed the first two phases.
What benefits does agriculture gain from digitalization?
– Agriculture and the entire food chain are currently broken. Climate change significantly reduces yields for farmers, and its cause is also the way agriculture produces today. The entire food industry contributes 30 percent of greenhouse gases. If we continue today’s practices, a yield decline of 10 to 28 percent is expected due to climate change. Agriculture today uses 70 percent of all fresh water, and due to climate change, even more irrigation will be needed. California has sunk half a meter because the underground water reserves have been depleted… Agriculture must change because we will not have anything to eat. Statistics show that from 2000 to 2016, the number of farmers in the European Union decreased from 15 to 10 million, and the projection is that by 2042 there will be only 3.9 million. At this moment, input prices in agriculture in the EU have drastically risen: 70 percent of fuel prices, over 30 percent of pesticide prices, and over 20 percent of labor costs. Food has automatically become more expensive, but this price increase has not followed the input, meaning that profit margins have decreased, and the majority of inquiries we currently receive from the global market are about how producers can protect themselves to remain profitable and what can be optimized. Technology helps identify early risks so that farmers can protect themselves, make decisions earlier, and ensure yields. On the other hand, automation and technology are necessary as a substitute for the labor shortage.
How does Agrivi’s software help in this?
– Our software helps farmers control costs, the optimization of input usage is significant, and they can save between 20 to 40 percent. Looking at the total costs they have, the savings are between 10 to 30 percent. The profit margin in agriculture is only a few percent, and such savings are important to ensure profitability.
Who are your clients and what is your competition like?
– The competition is very strong, we operate globally, and our niche is large producers like Driscoll’s, the largest berry producer in the world, which uses our solutions in eight countries across four continents. Another major client is Tequila Sauza, the largest tequila producer in the world.
Various investors have invested around 6.5 million euros in Agrivi. What was the criterion for their selection?
– We talked to many investors, and if we look at investors who invest in this region, there are not many. On one hand, there is selection, and on the other hand, what is available. It is not always about selection; you look at what funding sources are available to you and choose.
Do you regret involving several investors?
– No, not at all. Working with investors is like a marriage – you have good days and bad ones.
What is the ‘divorce’ like with them, have you reached that stage?
– No, we haven’t. All investors are on a mandate; they must eventually exit and make a return on investment, which means their share must be sold. This usually happens through the sale of the company. I hope that one day when the time comes, we will part ways happily with our investors.
Read the entire interview in the new printed and digital edition of Lider.
