Capital 10X interviewed Bee Vectoring Technology [stock_market_widget type="inline" template="generic" color="default" assets="BEE.V" markup="(TSXV: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] CEO Ashish Malik to learn more about the company’s recent success and what’s in store for 2020.
We discuss the results of their first sales, upcoming grow seasons and new revenue opportunities, and how BVT is positioning themselves as a global Ag-Tech player.
After progress has been made in Europe and Mexico, recognition was given by the TSXV, and conversations started with institutions, this interview is a must-listen to learn what all the buzz is about.
Chat Transcript
Capital 10X: I’m here with Ashish Malik from Bee Vectoring Technologies Ashish Malik. Thanks for taking the time to chat.
Ashish Malik: My pleasure it’s great to be here
Capital 10X: So we chatted before in December actually that was sort of an introduction, so if investors are curious about the story I think they should go back and watch that interview. Get a bit of an overview of the business, the technology behind it, it’s pretty cool I think, Bee Vectoring.
But today I want to focus more on the future, the progress you’ve made since that interview and so maybe talk first about the the sales that you’ve achieved I believe it was the you said the Florida strawberry grower commercial sales, the first time but that’s closed now. Can you talk about the suit the progress that was had there you know the results of those those early sales?
Ashish Malik: Yeah so when we had the conversation late last year we had just received the EPA approval and just started the marketing process and and we talked about the priority crops for us in the U.S. being strawberries and blueberries and what’s great is the season for those different crops started pretty much in November and will continue in the case of blueberries until May or June so we’ve progressively started talking to growers first in Florida and then as the season kind of grows a little bit further north into Georgia, North Carolina, South Carolina, and then ultimately Michigan in Pacific Northwest.
So what’s transpired in the last three months is we’ve pretty much now completed the season for growing strawberries in Florida and that’s gone extremely well. We actually sold out the allocation of beehives that we had so that was great great news for us and then going into the biggest opportunity for Georgia in blueberries what’s great there is we exceeded our own expectations. We were hoping to get you know sales from somewhere around 10 customers, 500 acres was what we were planning for. Well once we started talking to these guys the demand was such that we ended up now doing business with about 15 growers on about 700 acres so it’s quite a bit higher than we were hoping for and we’re really happy about that. The blueberry season is active right now for the next 3-4 weeks well and then we go on to Michigan and Pacific Northwest from there.
Capital 10X: That’s exciting and so I that’s great and I think I’m sure investors will look forward to seeing some news flow from sales there but I think the interesting thing I’d like to touch on because we were talking is is your actual strategy around that you guys run a pretty lean lean ship at BVT so you really what you’re looking to do is break into a lot of different markets and then try and grow through word-of-mouth so can you talk a little bit about you know how that strategy is playing out maybe some early success or even just how it works?
Ashish Malik: Yeah so one of the things that we need to remember is that the conditions I mean so even if you take a crop like blueberries which are grown in Florida and Georgia, Michigan, in New Jersey, in Oregon, Washington, of course British Columbia the conditions are very different the varieties that farmers are growing are different so just because you work in one growing region you cannot translate that to the other region. So unfortunately what that means is we have to do a lot of homework right so we have to work with the local growers in these different markets with the universities, the Extension agents that are actually doing the research, in order to show the efficacy and what this technology can bring.
Ashish Malik: So we do all that, we have to do that, we have done that, but then when you start getting into the sales cycle and pick up you know a community like the Georgia blueberry growers there’s many. It’s quite fragmented right, it’s very difficult unless you’ve got the ten million dollar marketing budgets that the Bayers or Syngentas of the world have, it’s very difficult for a company our size to just kind of do a huge launch like that so our strategy is much more focused on who are the key growers and we really try to find those influential growers who work with the key brands. So the blueberries that you and I would go buy at a shop don’t have the growers name on it’ll have Nature Ripe or Driscoll’s right and those are basically branders, they’re packers and they will buy from a variety of growers.
So you talk to growers that are selling through Nature Ripe or selling through Driscoll’s you get them comfortable with the technology make sure that they have a positive experience and then that’ll translate into word of mouth extension within that organization so that’s our strategy. We you know we’re the 10 or 15 growers we’re working with typically will will get you know a percentage 10 15 percent of their acreage in the first season knowing that we service the heck out of them, they get a positive experience they will buy more the next season but most importantly they will also bring other growers.
They become the BVT brand evangelists exactly well and I think that’s a smart way when you’re lean, you’re on a tight budget but with that said you guys have also had some pretty big success sort of you’ve got a lot of recognition in the agtech community. You have a recognition from TXXV I think that was announced today releasing your top 50. Congratulations there but I think part of one of the the agtech award that helped you get a foot in in the door in Europe and I know you guys have talked you really want to be a global focused organization not just North America so can you talk about the importance of that and what you’re hoping to do in Europe and why you think?
So there are two key events. So last year we actually also got recognized by global industry peers for innovation so we actually received the what’s called the Agro Innovation Awards last October and and that was also announced so that was that’s a big deal yeah because that’s you know my peers our industry peers recognized us international. What you’re referring to is an award that we got for a county in Switzerland and that was late 2018 it would have been where we were recognized as an innovative agtech startup and this county this region in Switzerland wanted to build a kind of an Innovation Center so one of the nice things we got out of that award was access to their facility so we’ve just moved into their facility, they’re building an infrastructure of you know different labs, grower fields they’ve got some farmers that are helping grow different crops that companies like ours can test our product in and so really it’s an R&D Center for the European region, starting in Switzerland first but we expect that it’ll be an innovation hub across the continent.
Capital 10X: And will that help you guys get approval in Europe faster is that how your think is that how investors should think about this or is it more about new IP?
Ashish Malik: I think it’s more about proving that the technology works. It could help for the regulatory process within Switzerland right but you know remember that Switzerland is not part of the EU so it’s not gonna help us with you know Spain or Italy registrations but it will help show that our technology works in the European crops.
Capital 10X: Excellent and so against thinking with that global theme you recently announced relatively recently progress on the Mexican sort of commercialization so can you talk to investors about you know where that stands and just quickly where that needs to go, what might happen in 2020?
Ashish Malik: So the first point there is Mexico is a tremendous opportunity and the reason for that is Mexico is actually taking acres away from the U.S. market. So every year you see acres of strawberries and tomatoes and blueberries growing in Mexico declining in the U.S. just because it’s cheaper to produce those crops down there. The other thing to remember is that a lot of the crops they grow in Mexico are for export purposes into the U.S. into Canada and so this point about residue management.
I don’t know if you recall but we talked about we got an exemption from residue when we got our registration with the EPA is very important to the Mexico growers because when they grow these crops, when they ship them into the U.S. they don’t have to test for residues if off clonal status so the markets kind of perfect for us. So then the question is how do you get the license to operate and that’s where the regulatory process comes in. So we kicked the process off last year. Started doing our first set of trials with the Mexican environmental conditions.
In Mexico you have to do what are called official trials which are government sanctioned and they have to be approved by the government and done through a qualified researcher. So we just completed those, getting the reports written, they’ll get written up with the rest of the regulatory dossier and we expect that the package will be submitted to the regulatory authorities later this year. I’m hopeful still for the first half of this year and and then that’s the official submission to the to the Mexican government.
Capital 10X: I mean obviously you have no control over the Mexican government but you think it’s possible 2020?
Yes, the feedback that we’re getting is that 2020 is possible, but there’s a fair degree of variability.
Capital 10X: So that’s obviously a huge catalyst for you guys in 2020, along with increasing sales. You’re a younger organization I think since the financial statements were released you’ve raised two million dollars. You wanna just talk these are early-stage companies in cash balance that runway is incredibly important you just want to talk about your liquidity situation throughout 2020 and what you guys are looking at because obviously you are gonna need more funding, you know whether that’s you know continuing the bridge funding, maybe starting to talk to institutions, you know what does that look?
So we have a high aspiration from BVT right and I think as we start developing Mexico, Europe, and ultimately Latin America, Asia because we’ve got people that are interested in this technology for those markets also. That requires registrations, trials, sales, organization build up. All those things will require capital and and so what we are building is a kind of a flexible business plan where we can either move very fast which would require a larger raise upfront or we can kind of meter our growth a little bit which would require sequential raises so those are very active conversations that we’re having myself and the rest of my board and the reality is we will need financing in 2020 so the question is like you said is it gonna be you know one big one or is it going to be a smaller bridge to a bigger one. What’s really cool Evan is that we are now you know beginning to have conversations with institutional funds and so we kind of turned that and I think the catalyst there was the EPA registration last year right and and we’re also begin to talk to folks in the U.S. so we have some options and we just need to pick the right one.
Capital 10X: I mean options are key hopefully you can reach that larger funding amount because I think investors obviously want to see you guys go global as fast as possible but it’ll also lower your cost of capital if you’ve got more people that you can turn to so obviously 2020 is setting up to be a big year, thank you for taking the time to chat.
I appreciate it, great thank you Evan.
