Peter Thiel’s big bet on solar-powered cow collars

Founders Fund has made its name for supporting what Peter Thiel calls “zero to one” companies – companies that don’t just improve existing ideas, but create something completely new. Its portfolio includes Facebook, SpaceX and Palantir. Its latest venture is a New Zealand startup that puts solar-powered smart collars on cows.

Halter, which closed a $220 million Series E at a $2 billion valuation last month, with Founders Fund leading the round, isn’t the type of company that tends to dominate tech headlines. There is no agent AI involved, no humanoid robots. However, there is a very large and largely unsolved problem: How do you manage cattle scattered across some of the most remote terrain on earth without dogs, horses, motorbikes or helicopters?

Craig Piggott, Halter’s 30-year-old founder and CEO, has spent nine years working on an answer. “If you’re running a grass-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 the lever—they control where animals graze and how you rest the land. Being able to do that made a lot of sense practically.”

The system Halter built combines 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 farmhouse. Cattle are trained to respond to sound and vibration signals from the collar — a process Piggott likens to the way a car beeps when it approaches a wall while parking. Most animals, he says, learn within three interactions with a virtual fence. “Then you are able to guide them and move them around using sound and vibration alone.”

The collar does more than flock. Because it’s always on and collects behavioral data, it also tracks animal health, monitors fertility cycles and flags when individual animals may be sick, features that Piggott says have improved dramatically since Halter has accumulated what is likely 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 product that farmers use today is radically different from what they bought a year ago,” Piggott said. “Every week we release 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 and startups and the world of venture capital,” he said. “It was inspiring to realize you could raise money, hire a team and chase an ambitious mission. That’s what I wanted to do in agriculture.” He started Halter as a 21-year-old. “Probably a bit naive in retrospect,” he admitted, “but it was fine.”

Nine years later, Halter collars more than a million cattle on more than 2,000 farms in New Zealand, Australia and the United States, with the company operating in 22 states. The economic proposition for farmers is straightforward: By giving ranchers precise control over where their herds graze, Halter can lift the productivity of their land by as much as 20%—not by saving labor costs (although that happens, too), but by ensuring that cattle graze more efficiently and leave less grass behind. “In some cases, we’re seeing customers literally double the production from their land,” Piggott said. “The upper ceiling for returns is very, very strong.”

Halter is not alone in spying the possibility. Pharmaceutical giant Merck is already making its own virtual fencing system for cattle, called Vence, and newer entrants are also circling — at Y Combinator’s most recent “demo day,” a startup called Grazemate presented a vision for herding cattle with autonomous drones (no collars required).

Piggott seems unfazed by either. Asked about drones, he replies: “Can I see drones playing a small role in the future? Probably. But I don’t think a drone is the right form factor for the core fence element in virtual fencing. A collar is probably going to be the right form factor for a very long time.” And as for the bigger competitive picture, he argues that the real obstacle isn’t rival technology at all. “The biggest competition is just not changing anything,” he said. “It does what you did last year.”

What sets Halter apart, Piggott claims, is the sheer technical difficulty of what it has spent nine years solving – a system that handles a thousand animals must be reliable for many nines of uptime, because even a 1% error rate means ten animals are out at any given time. “Chasing the big nine of reliability takes time,” he said, “and the long tail is what we proved in New Zealand for many years before we started expanding globally.”

Halter is also something of an outlier in the agricultural technology sector, which has declined in recent years as startups struggled to persuade farmers to adopt new products while dealing with high operating costs. Piggott attributes Halter’s traction to its relentless focus on financial return. “From day one, Halter has been built around a really strong financial ROI,” he said. “If you can lift the productivity of land by 20%, it flows through the whole business.”

Unlike most tech companies, Halter does not 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 is spread all over the world, and we have to get there too.” The company has now raised around $400 million in total and is prioritizing expansion across the US, South America and Europe.

But the extent of the remaining opportunity is perhaps best captured in a single number — a number that no doubt also resonated with Founders Fund and Halter’s former backers. Halter’s collar is on a million cattle, while there are a billion more in the world. With less than 10% penetration in the domestic market in New Zealand alone, “We have a long way to go and a lot of products still to build,” Piggott said.

You can listen to our conversation with Piggott in this latest episode of the StrictlyVC Download podcast, out on Tuesdays.