Small Robot Company’s lead investor has pulled its funding, leaving the UK company with no runway to continue operations.
According to SRC, a lead venture capitalist investor has pulled out of the company’s planned funding round. “They like our tech and our team, but find agriculture too risky”, SRC makes clear in a statement. “They can’t see the big picture. We can and we know our community does too. With no runway, our farmer led mission is at risk of ending.”
The company is now pursuing bridging finance, among other options, to continue its operations. Following a call with its investor community to gauge interest in supporting an equity crowdfund, SRC has received more than half a million pounds in investment pledges.
“This is hugely heartening, and SRC is therefore urgently pursuing this option”, CMO Sarra Mander of SRC says. “Without this bridge, it’s possible that our farmer-led mission to make farming sustainable is at risk of ending. It is likely that without direct support from our community, we will enter administration at the end of the month.”
SRC points out that £1.5m (US $1.9m) will stabilise the situation and keep the business open long enough to confirm investment, grant funding or an acquisition. Raising £3m (US $3.8m) will help to launch the first franchises, and will result in a second season of proof points with new capabilities. Raising £4m (US $5.06m) will help SRC to launch 8 franchises and achieve all revenue projections. This can also lead to a Series B funding round or an Initial Public Offering.
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Entering administration will be a huge blow to the farmers that work with SRC, Ms Mander points out. “We have created something remarkable in the last 6 years. This is still a strong investment opportunity. We have recently completed multiple technological milestones which have proved the value and reliability of our hardware and software. Service this season has demonstrated up to 90% herbicide and 24% fertiliser savings.”
SRC has also completed grass weed detection at field scale, which is ready to go commercially live in September, she emphasises. “In short, our technology works, we’ve shown value, our customers are waiting – but we do not have the runway to raise institutional investment in the current market conditions. Our team is pursuing all possible avenues, including other potential leads, financing or acquisition, however they may not be able to act within our compressed timeframe.”
The alternative is that all investors lose everything
Crowdfunding £1.5 million is currently SRC’s most viable option, Ms Mander says. “The alternative is that all investors lose everything and the tech does not benefit farmers or the planet. It’s also a huge hit to the UK fledgling agtech ecosystem: SRC crashing will significantly dent investor confidence – both institutional venture capitalists and farmer seed-funders – and the confidence of other farming startups to follow our lead.”
SRC launched version 4 of its crop scouting robot Tom at the end of 2022. The new modular design of Tom V4 was planned to be the basis for the Dick and Harry robots, that were expected as a commercial product in 2024 and 2025.
SRC expected the modular platform to allow it to scale internationally, to build more robots and cover much larger farms. It also provided the company with a configurable platform to deploy multiple technologies and applications.
SRC announced a £2.1 million (US $2.66m) funding in February 2020 for a Crowdcube equity crowdfunding campaign. Venture capitalist firm 7percent Ventures was confirmed as lead investor. The VC firm also invested in a funding round in August 2021, when SRC raised nearly £4m (US $5.06m). According to Crunchbase, Small Robot Company has raised a total of £8.4M (US $10.26m) in funding over 5 rounds.