As Israel finalizes an agreement to normalize relations with the United Arab Emirates, Netanya-based agriculture technology startup CropX Technologies is already fielding numerous calls and emails from the Gulf country, which only a few months ago was off limits to Israelis.
“CropX has started receiving many inquiries from interested agricultural companies and investors,” said Tomer Tzach, CEO of CropX, which makes simple to install underground sensors that track moisture and other soil properties. “The UAE market is very relevant to CropX and has the potential of becoming CropX’s third largest market.”
The company’s sensors store and analyze the data in the cloud and notify farmers via phone alerts when to water their fields, saving large amounts of water – a potential game-changer for the parched Gulf landscape.
The experience of CropX highlights how the US-brokered agreement with the UAE is opening up opportunities for Israeli tech companies that focus on water and agriculture. The water-starved and fast-developing Gulf region is eager to find investment opportunities and to improve its own agriculture sector.
CropX CEO Tomer Tzach explains how the company’s technology enables fields to talk to farmers (OurCrowd)
“Dry-climate agriculture is a field in which Israel excels, and we see a very bright future for Israeli companies in the region,” said Dorian Barak, founder of the UAE-Israel Business Council, which promotes trade and economic cooperation. “In general, the UAE represents an enormous opportunity for the Israeli business community, and export-oriented companies in particular.”
Israel’s economy ministry estimates that exports to the UAE could total between $300 million and $500 million a year, and business leaders in both countries say they complement each other well in many fields.
In the oil-rich Emirates, “financial capital has far outstripped human capital,” explained Sabah Al-Binali, newly-appointed head of Gulf Region for OurCrowd, ab equity investment platform based in Jerusalem. But Israel has the opposite situation, he said. “Each one of these markets wants what the other has,” he said. “You actually have a natural fit.”
As for CropX, Tzach cites the UAE’s climate, with very little rain and a landscape dominated by desert, as conditions where the company’s technology can make a difference.
The UAE is trying to modernize its agricultural system and decrease its reliance on imports, which account for about 80% of its food. The CropX system, which allows many users to reduce their water use by up to 50% while also increasing yields, could help the UAE, and other countries in the region, meet such goals, Tzach said.
“CropX’s product is highly relevant to the current needs and challenges” of the Gulf countries, “and to the UAE in particular, as it helps farmers become more efficient and save significant amounts of water, agrochemicals, energy and manual labor,” Tzach said. The UAE’s agricultural sector has shown signs of modernization in recent years, with about 90% of farmers now using modern irrigation systems rather than flooding rows of crops with water — long a traditional, although more wasteful, practice.
The UAE is also developing its own AgTech sector, with the government last year committing $272 million in funding and tax benefits for research and development.
“We live in a very harsh climate,” said Motaz Abu-Hijleh, co-founder and CEO of World of Farming, a Dubai-based vertical- and indoor-farming technology company, at a recent online conference organized by OurCrowd and the Emirates Angels Investors Association introducing Emirati startups to Israeli investors and entrepreneurs. “We always have to look at modernizing the agriculture scene.”
The coronavirus pandemic has made the UAE’s goal of increased self-sufficiency in agriculture more urgent, Abu-Hijleh said, with lockdowns and reduced air traffic disrupting supply chains and raising fears of shortages and price jumps, something the region has experienced in the past.
“This crisis is a wakeup call for the whole world,” said Mariam bint Mohammed Almaheiri, minister of state for food and water security in the UAE, who has emphasized the role of technology and reducing waste.
Despite the near-halt in global travel, CropX was able to supply customers because farmers can order the system online and install it themselves.
As the company expands globally, recently acquiring other precision irrigation companies like New Zealand-based Regen and Nebraska-based CropMetrics, more of the world is facing a future like the UAE, with scientists predicting more frequent and severe droughts globally, resulting in water shortages even as more food is needed for a growing population. Tzach says the company’s technology, which can save millions of gallons of water daily on a single farm, makes solving this crisis “easy.”
Gaining a foothold in a global business center like Dubai could also help CropX bring its water-saving technology to other markets in the Gulf region, as well as those farther east in Asia, another area trying to meet food needs for a growing population.
“Israeli companies can for the first time use the UAE as a base of operations from which to expand into markets that haven’t seen much Israeli technology and products in the past,” Barak said. “This is an unprecedented opportunity.”
Join OurCrowd to hear CropX’s Tomer Tzach and other Israeli entrepreneurs discuss “How AgTech Protects Our Food Supply in a Pandemic,” on Tuesday, October 20, online HERE.
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