The Founders Fund made its name by supporting what Peter Thiel calls “scratch-to-one” companies—businesses that don’t just improve on existing ideas, but create something entirely new. Its portfolio includes Facebook, SpaceX and Palantir. His latest bet is a New Zealand startup that puts solar-powered smart collars on cows.
Dumbbellthe company, which closed a $220 million Series E last month at a $2 billion valuation with Founders Fund leading the round, isn’t one that favors tech headlines. No agent artificial intelligence, no humanoid robots. However, there is a huge and unsolved problem: How do you manage livestock spread across the most remote areas on earth without dogs, horses, motorcycles or helicopters?
Halter’s 30-year-old founder and CEO, Craig Piggott, has spent nine years working on the answer. “If you’re running a pasture-based farm, whether it’s dairy or beef, the most important variable is how you manage the productivity of your land,” Piggott told TechCrunch in a recent interview. “Fences are leverage—they control where animals graze and how you rest on the land. It made a lot of sense to be able to do that.”
The system Halter built consists of a solar-powered collar, a network of low-frequency towers and a smartphone app that allows farmers to create virtual fences, monitor each animal around the clock, and move their herds without ever leaving the farm. Cattle are trained to respond to audio and vibration signals from their collars—a process similar to Piggott’s honking when a car approaches a wall in a parking lot. Most animals learn in three interactions with a virtual fence, he says. “Then you can direct them and change them based on sound and vibration alone.”
A collar does more than a flock. Because it’s always active and collecting behavioral data, it also monitors animal health, monitors fertility cycles and notes when individual animals might be sick, a capability that Piggott says has improved dramatically since Halter has collected the world’s largest dataset of cattle behavior. The company is now on its fifth generation of hardware, and its reproduction product is currently in beta with US customers.
“The produce that farmers use today is radically different from what they bought a year ago,” Piggott said. “Every week we introduce new things to our customers.”
Piggott grew up on a dairy farm in New Zealand before studying engineering and landing a brief stint at Rocket Lab, the rocket company that gave him his first glimpse of what a tech startup could be. “Rocket Lab was kind of my introduction to technology, startups and the world of venture capital,” he said. “It was inspiring to realize that you could raise money, hire a team and pursue an ambitious mission. I wanted to do that in agriculture.” He started weightlifting at the age of 21. “It was probably a little naive,” he admitted, “but it was good.”
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Nine years later, the Halter collar is on more than a million cattle on more than 2,000 farms in New Zealand, Australia and the United States, where the company operates in 22 states. The financial proposition for farmers is simple: By giving farmers precise control over where their herds are grazed, Halter can increase the productivity of their land by up to 20% – saving on labor costs (although that happens), ensuring that livestock graze more efficiently and leave less grass. “In some cases we’re seeing customers double production from their land,” Piggott said. “The upper ceiling for returns is very, very strong.”
Halter is not alone in spotting the opportunity. Pharmaceutical giant Merck is already developing its own virtual fencing system for cattle called Vence, and newer entrants are making the rounds — at Y Combinator’s most recent “demo day,” a startup called Grazemate presented a vision for driving cattle with autonomous drones (no collars required).
Piggott doesn’t seem bothered by either. Asked about drones, he says: “Could I see drones playing a minor role in the future? Probably. But I don’t think the drone is the right form factor for the main fencing element of the virtual fence. The collar will probably be the right form factor for a very long time.” And when it comes to the bigger competitive picture, he argues, the real obstacle isn’t competing technology at all. “The biggest competition is not changing anything,” he said. “It does what you did last year.”
What sets Halter apart, Piggott believes, is the sheer engineering difficulty of what he spent nine years solving—a system that handles a thousand animals must be reliable for as many as nine working hours, because even a 1% failure rate means ten animals are out at any given time. “It takes time to chase those nine credentials,” he said, “and that’s what we’ve proven for many years in New Zealand before that long tail starts to expand globally.”
Halter is also something that has come down in recent years in the agtech sector as startups have struggled to convince farmers to adopt new crops while managing high operating costs. Piggott attributes Halter’s appeal to his relentless focus on financial return. “From day one, Halter was built around a really strong financial ROI,” he said. “If you can increase the productivity of the land by 20%, it goes through the whole business.”
Unlike most tech companies, Halter doesn’t see the US as the center of its universe. “The US market is important to us, but it’s not the biggest market in the world,” Piggott said. “Agriculture has spread all over the world and we have to get there.” The company has now raised about $400 million in total and is targeting expansion in the US, South America and Europe.
But the scale of the remaining opportunity is perhaps best captured in a single number — one that certainly resonated with Founders Fund and Halter’s previous backers. The halter collar is on one million cattle, while there are a billion more in the world. “We’ve got a long way to go and there’s still a lot of product to build,” said Piggott, who has less than 10% penetration in the New Zealand domestic market alone.
You can listen to our conversation with Piggott in this new series Download StrictlyVC A podcast that drops on Tuesdays.
