Founders Fund has made a name for itself by backing what Peter Thiel calls “zero-to-one” companies: businesses that don’t just improve on existing ideas, but create something entirely new. Its portfolio includes Facebook, SpaceX, and Palantir. Its latest bet is a New Zealand startup equipping cows with solar-powered smart collars.
Holter, which closed a $220 million Series E at a $2 billion valuation last month with Founders Fund leading the round, isn’t the kind of company that tends to dominate technology headlines. No agent AI or humanoid robots are involved. However, there is a very large and largely unresolved problem. How do you manage cattle spread across some of the most remote terrain on earth without dogs, horses, bikes or helicopters?
Craig Piggott, 30, Holter’s founder and CEO, has spent nine years searching for answers. “When you run a pasture-based farm, whether it’s dairy or beef, the most important variable is how you manage the productivity of the land,” Piggott told TechCrunch in a recent interview. “Fences are like levers, controlling where animals can graze and how they can rest the land. It makes a lot of sense to be able to do that virtually.”
The system Holter built combines solar-powered collars, a network of low-frequency towers, and a smartphone app that allows farmers to create a virtual fence, monitor all animals 24 hours a day, and move their herd without leaving the farm. Cows are trained to respond to audio and vibration cues from the collar. This process of Piggott is similar to when a car beeps when it approaches a wall while parked. He said most animals learn within three interactions with the virtual fence. “Then you can guide them and move them using just sound and vibration.”
Collars do more than just protect the herd. Because it’s always on and collecting behavioral data, it can track an animal’s health, monitor its reproductive cycle, and even flag when an individual animal may be sick, Piggott says, and its capabilities have improved dramatically now that Holter has amassed what is likely the world’s largest dataset on cow behavior. The company is currently developing its fifth generation of hardware, and its remanufactured products are currently available in beta for customers in the United States.
“The products ranchers are using today are fundamentally different than the products they bought a year ago,” Piggott said. “Every week we release something new to our customers.”
Piggott grew up on a dairy farm in New Zealand, then studied engineering and briefly worked at rocket company Rocket Lab, which gave him his first glimpse of what a tech startup was like. “Rocket Lab was like my introduction to the world of technology and startups and venture capital,” he said. “I was inspired by knowing I could raise money, hire a team, and carry out an ambitious mission. I knew I wanted to do that in agriculture.” He started Holter at age 21. “In hindsight, I was probably a little naive,” he admitted, “but that was OK.”
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Nine years later, Halters collars have been fitted to more than one million cows on more than 2,000 farms in New Zealand, Australia and the United States, and the company operates in 22 states. The financial proposition for farmers is straightforward. By giving ranchers precise control over where their herds graze, Holter can increase land productivity by up to 20%. This is not to save on labor costs (though it is), but to allow the cows to graze more efficiently and leave less grass behind. “In some cases, we’re seeing customers literally double the production from their land,” Piggott says. “The return cap is very strong.”
Holter isn’t the only one eyeing this opportunity. Pharmaceutical giant Merck has already developed its own virtual fencing system for cattle, called Vence, and new companies are also entering the market. At Y Combinator’s recent “Demo Day,” a startup called Grazemate presented its vision of herding cattle with autonomous drones (no collars required).
Piggott doesn’t seem bothered by either. When asked about drones, he says: “Will drones play a small role in the future? Maybe. But I don’t think drones are the right form factor for the core fencing element of virtual fencing. Collars will probably be the right form factor for a very long time.” And when it comes to the larger competitive landscape, he argues that the real obstacle isn’t competing technologies. “The biggest competition is not to change anything,” he says. “We’re doing the same thing as last year.”
Piggott argues that what sets Holter apart is the difficulty of engineering the problem, which the company spent nine years solving. A system for managing 1000 animals must be reliable for up to 9 hours. This is because even a failure rate of 1% means that 10 animals are missing at any given time. “Chasing the reliability 9 takes time, and that long tail is something we proved over many years in New Zealand before we started expanding globally,” he said.
Holter is something of a maverick in the agricultural technology field, but it has languished in recent years as startups struggle to manage high operating costs and convince farmers to adopt new products. Piggott attributes Holter’s traction to its relentless focus on economic returns. “From day one, Holter has been built around very strong financial ROI,” he said. “If you can improve the productivity of your land by 20%, that will ripple throughout your business.”
Unlike most technology companies, Holter does not consider the United States to be the center of the world. “The U.S. market is important to us, but it’s not the biggest market in the world,” Piggott said. “Agriculture is spreading all over the world, and we need to get there, too.” The company has now raised about $400 million in total and is prioritizing expansion into the U.S., South America and Europe.
But the scale of the remaining opportunity is perhaps best captured in a single number. Those numbers will no doubt resonate with Founders Fund and Holter’s previous backers. Halternecks are worn on one million cows, but there are another billion in the world. Penetration in its home market of New Zealand alone is less than 10%, Piggott said, and “there’s a long way to go and there’s still a lot to build.”
You can hear our conversation with Piggott on the latest episode of the StrictlyVC Download podcast, released on Tuesday.
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