The first presidential debate of 2020 was a failure in public speaking. Unfortunately, after COVID-19 caused more than 200,000 deaths, the United States fell into grief and prosperity. In New York and around the world, we see surges in cases, as few people still immediately recall the panic of overwhelmed hospitals and empty supermarket shelves. Unfortunately, beneath the harsh rhetoric in Washington lies the truth of a collapsing food system and more than 5000 million food-insecure citizens (including 1 out of every 7 children). But mushroom-harvesting robots point to potential solutions.

Last summer, I drove more than 9000 miles across the United States, observing endless fields of corn, wheat, potatoes, grapes, and citrus fruits. Although most irrigation systems today are fully automated, harvesting remains highly labor-intensive. With the demands brought by the coronavirus, the weaknesses of the current system—its heavy reliance on migrant workers and low-income temporary workers—have become very apparent.

At ff Venture Capital, we have learned about agricultural automation opportunities prior to COVID-19, as demonstrated by our investment in Burro. Feeding the nation under current circumstances requires higher yields, lower costs, and greater creativity.

REEST applies robotics to fungal cultivation

Just as offices use online video, agriculture is undergoing a revolution through new indoor automation solutions. The latest product is RESV, from SOSV's HAX Accelerator, designed to increase global fungal yields through its novel robotics. Founder and Chief Technology Oifficer Denys Kotelovych explained to me the epiphany that led him to found the company. Kotelovych's partner Petro Shmigelskyi is headquartered in Lviv, Ukraine, and comes from a family tradition of mushroom cultivation.

Kotelovych explained: "Basically, my co-founder's relatives own mushroom farms, so he knows the problems they face." "The main issues are labor, working conditions, and yield quality. You must harvest mushrooms as soon as they reach the desired size, and do it quickly to prevent them from overgrowing. It is a mundane task where you must decide which ones to pick while standing on elevated racks in high-humidity, low-temperature environments."

According to the latest statistics, the global mushroom market is expected to exceed $690 billion by 2024. Growth in fungi is mainly driven by increased awareness of the nutritional benefits of mushrooms and consumption of processed foods. Leveraging the current market peak, Eastern European entrepreneurs share advances in spore sorting and harvesting.

Kotelovych explained: "We initially lease mushroom-harvesting robots to existing mushroom farms, allowing us to generate revenue and build other types of robots." "We place the robots on the racks; they begin scanning the mushroom farm, analyzing data, tracking mushrooms, and picking ready mushrooms on schedule, producing baskets filled with mushrooms on the side."

He said: "Ultimately, our goal is to establish a complete mushroom cultivation solution where the only inputs required are substrate and mycelium, resulting in mushrooms collected into boxes ready for sale to ordinary consumers."

REEST develops grippers and software for mushroom handling

Kotelovych describes an innovative proprietary electromechanical system. He said: "We have designed a gripper—patent pending—specifically suited for mushrooms." "With our software, we can use depth cameras and CV (computer vision) to precisely identify mushrooms that should be picked."

Furthermore, Kotelovych elaborated on how GRIPPER addresses the biggest challenge of machine harvesting—avoiding damage to the stock. He said proudly: "It is important not to damage the mushrooms, because people like to see beautiful, fresh mushrooms, and if you apply even slight pressure, they turn black, which is not good."

In addition to building a viable prototype, this innovation team will launch its solution in the United States with Basciani Foods, one of the largest mushroom suppliers in the US. The product aims to save 30% in costs while significantly increasing yields.

Outlining his business model, Kotelovych stated: "Compared to the $0.3 per kilogram plus other fees charged by pickers, human pickers charge $0.2 for every 1 kilograms of mushrooms. Therefore, it can now save 30% in costs, not just in price, but by using our algorithms, we can increase total yield by carefully selecting the optimal harvesting strategy."

The startup is currently raising funds to build 100 robots within the next 18 months. When I asked the technology expert for thoughts on future opportunities, he replied: "We have considered other crops, but the mushroom industry represents a significant share, so we are now fully focused on this."

As the pandemic continues, Kotelovych believes now is the best time to address labor issues. "Even before COVID emerged, growers were struggling with people, which is normal; no one wants to work in such tedious and monotonous environments, so yes, COVID simply showed everyone that this problem should be automated," he said. "When we saw the mushroom industry's labor-related issues, it was quite striking, so we immediately saw the robotics opportunity there. ... These days, I see many farming opportunities, so my honest view is that we will soon see many robots."