October 9, 2023

By Michelle Pelletier Marshall, Global AgInvesting Media

Living roots and soil coverage, integrating livestock, reducing inputs, diverse crop rotations, and minimal tillage – all common practices that define regenerative agriculture. But how to identify the practices that make sense in a given context and implement them successfully? Austin-based startup Vayda just may have figured out how to answer those questions and, better yet, in a way that ensures farmer buy-in.

Established in 2020, Vayda’s approach begins with field-testing a mix of regenerative practices that consider local conditions and risk factors, available markets, and farm-specific challenges and opportunities to maximize value and impact out in the field – all through the lens of the farmer’s pocketbook. Using precision agriculture technology – in-field sensors, satellite imagery, drones, yield monitors, and custom software and data science – the interdisciplinary team at Vayda is advancing regenerative agriculture with ground-truth data and creating more resilient farming and ecological systems.

The firm is focused on partnering with institutional landowners (the firm is already backed by Ontario Teachers’ Pension Plan) and introducing Vayda’s regen transition solution to their portfolio farmland properties. And with the objective of maintaining yield and driving up profits, success is being realized in their pilot project in the Mississippi Delta.

GAI News spoke to Vayda CEO Michael Shoemaker to understand the strategy more completely as well the opportunities that exist therein. Shoemaker has roughly two decades of experience with startup companies as a business leader and board member. He held the position of chief operating officer for Roofstock, a leading residential real estate investment platform backed by Softbank, Bain Capital, Khosla, Lightspeed, Canvas Ventures, and others. Additionally, Shoemaker led Uber’s initial launch and rapid growth across Central and South America, before leading Uber’s product planning and go-to-market team based in San Francisco.

Attendees at the Global Ag Investing conferences in London, December 4-5, 2023, and New York City, April 15-17, 2024, can learn more by connecting with Shoemaker and Vayda as they will be in attendance as sponsors of these events.

1). Vayda works with farmers to successfully introduce climate-smart agriculture practices. How is your model of optimizing for yield and profit during the transition to regenerative ag practices different from others out there and what is the benefit?

We have observed that the broad regen ag trend is being led top-down by large companies across the supply chain who are striving to reach their climate-related commitments. These corporations are backing regen ag programs and offering farmers small incentives to undergo big changes and ultimately take a lot of risk. While this is all well-intended, we simply don’t think that the current “carbon farming” approach will achieve the speed and degree of adoption that we all need and want to see.

Instead of top-down, Vayda is coming at it from the dirt up and building an offering for farmers and landowners that prioritizes what they seek – better returns and more resilient farms – and what they acutely need – expert support executing regen practices in a de-risked way that avoids the notorious J-curve. Our R&D is performed on large commercial farms that are expected to be profitable, so we necessarily optimize for sustaining or improving yields while growing profitability through input reduction from day 1. That is a much more compelling adoption proposition for regen, and, as far as we can tell, nobody else is coming at the problem in this way. As we continue to productize our work and build technology and data science around our unique approach, the gap between what Vayda and others are doing will continue to grow.

2). Please tell us more about the pilot project in the Mississippi Delta where you are working with 10+ farming partners.

We are really proud of our Delta pilot and the receptivity of the growers we have spoken with in the region. The pilot represents the end-to-end productization of our unique approach and regen agronomic IP. For each partner farmer, we are conducting a thorough baselining that includes extensive testing and data analysis, an in-depth understanding of historical practices and on-farm infrastructure and equipment, review of historical crop rotations and yield data, etc. We run that through our agronomic models to produce a regen conversion plan for the entire farm and each field that is fully customized to that operation. The ongoing transition support includes monitoring and in-season adjustments to ensure the plan continues to be relevant and actionable, even as market, climate, and on-farm conditions may change. We believe we will achieve around 40,000 total acres enrolled in our pilot by the end of this year, and I am challenging us to build a growth plan that gets us to a couple hundred thousand acres in total by the end of next year. Of course, that means graduating from a pilot to perhaps the biggest regen transition initiative out there, supported by a very heavy dose of technology.

3). You employ a diverse interdisciplinary team of leaders. How does the specific curation and composition of your team advance product development and outcomes for Vayda and its clients?

It’s unbelievably powerful. Everyone is aligned around a common vision and mission, and the wide range of backgrounds and expertise on the team allows us to borrow ideas from a range of industries and companies as we think about the best way to solve any particular problem. The team dynamic is innovation personified. More specifically to your question, the farm operations and agronomy teams are the foundation for everything. We can’t bring value to farmers and landowners if we don’t ground our work in real-world operational, agronomic, and market realities and challenges. The addition of seasoned tech startup leaders from companies like Google and Microsoft is allowing us to envision how world-class technology and data science will unlock even better customer outcomes over time and ensure the scalability and differentiation of our model. Our product and engineering team is extremely passionate about our mission and hungry to build something that will have a huge impact on agriculture, farming communities, and our planet.

4). While you help farmers transition to regenerative ag solutions, the objective is that yield is maintained, and profits are seen in the first year. Please explain how this avoids the “J curve” and provides advantages to keen investors.

We are also in the business of myth-busting, and one of the biggest myths about regen ag is that it operates according to the same logic as an organic transition. Surprise! It doesn’t. Or at least it doesn’t have to. One of regen ag’s greatest strengths is the lack of a rigid standard that forces farmers to do awkward things in pursuit of a label. We are targeting financial and environmental outcomes, not rigidly defined practices, and that allows us to use our unique approach to design transitions that introduce regenerative practices while weaning farms off the conventional practices that can increase input dependence and be harmful to soil health and the environment. This is a 12-step program, not a cold turkey approach. We have been extremely excited to see how quickly the soil health, environmental, and financial benefits can accrue even with a more incremental approach to change. Yields are resilient and the input savings stack up rapidly and in non-intuitive ways.

5). You’ve talked of supporting U.S. asset managers who have ESG-motivated capital partners through regenerative ag. Please explain this exciting opportunity further.

We love to partner with institutional farmland managers. Not only are they among the most forward-thinking when it comes to protecting asset values amid the long-term risks presented by a more volatile climate and increasing water scarcity, but they also want to see farmers and rural communities thrive, and they are deeply motivated to help their LPs achieve financial and important environmental and social objectives. The strong alignment with Vayda’s mission makes them a natural partner. I believe that institutional investors will ultimately lead the transition to a more climate-smart agriculture, because they are so much closer to agricultural production and the incentives to drive meaningful change at-scale are so strong.

6). What’s on the horizon for fundraising and growth plans for Vayda?

We are in full business-building mode and aspire to impact a couple hundred thousand acres by the end of 2024. Our number one priority is to drive adoption among the grower community and develop long-standing partnerships with farmland owners, with a current focus on the Mississippi Delta. Priority number two is to continue to build the agronomic IP and technology that will allow us to support successful regen transitions on a very large scale, across a wide range of regions and production systems. All of this will take more capital, and we plan to be out raising additional funds later next year. For now, the only things that matter are making our partners successful, building the company, and demonstrating real impact.

ABOUT MICHAEL SHOEMAKER

Michael Shoemaker is the CEO of Vayda and a serial technology startup executive. Prior to Vayda, Shoemaker was the chief operating officer at Roofstock, a leading residential real estate investment technology platform backed by several tier 1 venture firms. He also was an early leader at Uber, where he launched and grew the company’s business across Central and South America before leading product planning and go-to-market for Uber’s ridesharing business, based in San Francisco. He co-founded Latin American e-commerce company, Linio.com, and worked with several Bay Area-based software-as-a-service companies during the early days of cloud computing. Shoemaker has an MBA from INSEAD business school in France and was a U.S. Fulbright Scholar to Colombia.

– Michelle Pelletier Marshall is contributing editor and author for HighQuest Partners’ GAI News and Unconventional Ag, and managing editor for its WIA Today blog. Additionally, she is the company’ senior PR/media manager. She can be reached at mmarshall@highquestpartners.com.

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