Founders Fund has made a name for itself by backing what Peter Thiel calls “zero-to-one” companies: companies that not only improve existing ideas but create something entirely new. Its portfolio includes Facebook, SpaceX and Palantir. His latest bet is a New Zealand startup that puts smart collars that run on solar energy on cows.
Halterwhich closed a $220 million Series E at a $2 billion valuation last month, with Founders Fund at the helm, is not the kind of company that tends to dominate tech headlines. There is no agent AI involved, nor humanoid robots. However, there is a very big and largely unsolved problem: How do you manage livestock spread across some of the most remote terrain on the planet, without dogs, horses, motorcycles or helicopters?
Craig Piggott, Halter’s 30-year-old founder and CEO, has spent nine years working on an answer. “If you run a pasture-based farm, whether dairy or beef, the most important variable is how you manage the productivity of your land,” Piggott told TechCrunch in a recent interview. “The fences are the lever: they control where the animals graze and how the land rests. Being able to do that practically made a lot of sense.”
The system Halter has built combines a solar-powered collar, a network of low-frequency towers, and a smartphone app to allow farmers to create virtual fences, monitor each animal 24 hours a day, and move their herds without having to leave the farm. The cattle are trained to respond to the collar’s audio and vibration signals, a process Piggott compares to the way a car beeps when approaching a wall while parking. Most animals, he says, learn in three interactions with a virtual fence. “Then you can guide and change them with just sound and vibration.”
The collar does more than herding. Because it is always on and collects behavioral data, it also tracks animal health, monitors fertility cycles and flags when individual animals may be sick, capabilities that Piggott says have improved dramatically as Halter has amassed what is likely the world’s largest data set on livestock behavior. The company is now in its fifth generation of hardware and its streaming product is currently in beta with US customers.
“The product ranchers use today is radically different than what they bought a year ago,” Piggott said. “Every week, we release new things for our customers.”
Piggott grew up on a dairy farm in New Zealand before studying engineering and briefly working at Rocket Lab, the rocket company that gave him his first vision of what a tech startup could be. “Rocket Lab was kind of an 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 with Halter at 21 years old. “Probably a little naïve in retrospect,” he acknowledged, “but it was okay.”
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Nine years later, Halter’s collar is found on more than one 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 ranchers precise control over where their herds graze, Halter can increase the productivity of their land by up to 20%, not by saving labor costs (although that happens too), but by ensuring that livestock graze more efficiently and leave less grass. “In some cases, we see customers literally doubling the production from their land,” Piggott said. “The ceiling for returns is very, very strong.”
Halter isn’t the only one who sees the opportunity. Pharmaceutical giant Merck already makes its own virtual livestock fencing system, called Vence, and new entrants are also making the rounds: At Y Combinator’s most recent “demo day,” a startup called Grazemate presented a vision for herding livestock with autonomous drones (no collars required).
Piggott doesn’t seem to care about either of them. When asked about drones, he says, “I can see drones playing a small role in the future? Probably. But I don’t think a drone is the right form factor for the centerpiece of the virtual fence. A collar will probably be the right form factor for a very long period of time.” And as for the broader competitive landscape, he maintains that the real obstacle is not rival technology at all. “The biggest competition is simply not changing anything,” he said. “He’s doing what you did last year.”
What sets Halter apart, Piggott maintains, is the sheer engineering difficulty of what he has spent nine years solving: a system that manages a thousand animals must be reliable for many nines of uptime, because even a 1% failure rate means ten animals out at any given time. “Chasing those nines of reliability takes time,” he said, “and that long tail is what we demonstrated in New Zealand for many years before we started expanding globally.”
Halter is also an outlier in the agtech sector, which has slumped in recent years as startups struggled to persuade farmers to adopt new products while managing high operating costs. Piggott attributes Halter’s success to his relentless focus on financial performance. “Since day one, Halter has been built around a really strong financial return on investment,” he said. “If you can increase the productivity of the land by 20%, that will be reflected throughout the business.”
Unlike most tech companies, Halter doesn’t see the United States as the center of its universe. “The U.S. market is important to us, but it’s not the biggest market in the world,” Piggott said. “Agriculture is spread all over the world and we must get there too.” The company has raised approximately $400 million in total and is prioritizing expansion in the United States, South America and Europe.
But the magnitude of the remaining opportunity is perhaps best reflected in a single number, one that no doubt resonated with Founders Fund and Halter’s previous backers as well. The halter collar weighs on a million head of cattle, while there are a billion more in the world. With less than 10% penetration in its home New Zealand market alone, “We have a long way to go and there are still many products to develop,” Piggott said.
You can listen to our conversation with Piggott in this latest episode of the Download Strictly VC podcast, which comes out on Tuesdays.
