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

The Founders Fund has made its name by backing what Peter Thiel calls “zero-to-one” companies—companies that not only improve upon existing ideas, but create something entirely new. Its portfolio includes Facebook, SpaceX, and Palantir. Its latest bet is a New Zealand startup that is working on putting 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, is not the type of company that tends to dominate tech headlines. There is no agent AI, no humanoid robots. However, there is a very big and largely unsolved problem: how do you manage livestock spread across some of the most remote regions on Earth, without dogs, horses, motorcycles or helicopters?

Craig Piggott, Halter’s 30-year-old founder and CEO, 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 the lever – they control where animals graze and how the land is fallow. And being able to do that makes a lot of sense.”

The system Halter designed 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 around the clock, and move their herds without ever leaving the farm. Cattle are trained to respond to sound and vibration signals from the collar – a process Piggott likens to the way a car makes a sound when it approaches a wall while parked. He says most animals learn in three interactions with a virtual fence. “And then you’re able to direct them and switch them with sound and vibration alone.”

The collar does more than flock. Because it’s always on and collecting behavioral data, it also tracks animal health, monitors fertility cycles, and alerts when individual animals are sick, capabilities that Piggott says have improved dramatically as Halter has compiled what is likely the world’s largest dataset of cattle behavior. The company is now working on the fifth generation of devices, and its cloning product is currently in beta with customers in the US.

“The product ranchers are using 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 a stint at Rocket Lab, the rocket company that gave him his first glimpse of what tech startups could be. “Rocket Lab was my introduction to technology, startups and the world of venture capital,” he said. “Realizing that you could raise money, hire a team, and chase an ambitious mission was inspiring. And I wanted to do that in agriculture.” Halter started at 21 years old. “Maybe he was a bit naive in hindsight, but that was good,” he admitted.

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, with the company operating in 22 states. The financial proposition for farmers is straightforward: by giving ranchers precise control over where their herds graze, Halter can raise 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 behind. “In some cases, we see customers literally doubling the production of their land,” Piggott said. “The cap on returns is very, very strong.”

Halter isn’t the only one spying the opportunity. Pharmaceutical giant Merck already makes its own virtual fencing system for livestock, called Vence, and new entrants are circling, too — at Y Combinator’s recent “demo day,” a startup called Grazemate presented a vision for herding livestock with autonomous drones (no collars needed).

Piggott seems unfazed by either. When asked about drones, he responded: “Can I see drones playing a small role in the future? Maybe. But I don’t think a drone is the right form factor for a basic fencing element in virtual fencing. The collar will probably be the right form factor for a very long period of time.” As for the bigger competitive picture, he believes that the real obstacle is not competing technology at all. “The biggest competition is not changing anything,” he said. “He’s doing what I did last year.”

What sets Halter apart, Piggott says, is the sheer engineering difficulty of what he spent nine years solving—a system that manages a thousand animals needs to be reliable for several nines of runtime, because even a 1% failure rate means ten animals out at any given time. “Chasing that many reliability takes time, and that long tail is what we demonstrated in New Zealand over many years before we started expanding globally,” he said.

Halter is also an outsider in the agtech sector, which has declined in recent years as startups have struggled to convince farmers to adopt new products while managing high operational costs. Piggott attributes Halter’s appeal to his consistent focus on financial return. “From day one, Halter has been built around a really strong financial return on investment,” he said. “If you can raise the productivity of the land by 20%, that flows through the entire business.”

Unlike most technology companies, Halter does not view the United States as the center of its universe. “The US market is important to us, but it is not the largest market in the world,” Piggott said. “Agriculture is all over the world, and we need to get there, too.” The company has now raised nearly $400 million in total and is prioritizing expansion across the US, South America and Europe.

But the size of the remaining opportunity is perhaps best captured in a single number — one that has undoubtedly resonated with Founders Fund and Halter’s previous backers as well. The halter collar is on one million cattle, while there are another billion in the world. With less than 10% penetration in its home market of New Zealand alone, Piggott said: “We have a long way to go, and we still have a lot of products to make.”

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