Last week, I went to a ribbon-cutting in Raleigh for the new offices of Targan, an ag-tech company that has figured out how to automate two crucial tasks that poultry processors have to perform before they can deliver chicken to your plate.
Targan’s technology can determine the gender of newly hatched chicks and vaccinate them one by one, at a rate of 100,000 an hour, using high-speed imaging and artificial intelligence. It just installed its first commercial machine at a chicken hatchery. The company has 120 employees, most of them scientists and engineers, up from around a dozen five years ago, and has raised nearly $54 million. To accommodate growth that could take it to 600 employees, Targan has moved from cramped quarters in Morrisville to 100,000 square feet on Six Forks Road, a renovated former Kroger grocery.
North Carolina is one of the nation’s largest poultry-producing states in a region that runs from Maryland to Texas. Last month, Targan signed a deal with Wayne-Sanderson, the third-largest poultry producer in the nation, to install its systems in a number of broiler hatcheries around the country. In North Carolina, Wayne-Sanderson’s Kinston plant has processing, hatchery and feed mill facilities; it can process 1.3 million birds a week. Its plant in St. Pauls has similar capacity, and its Dobson plant, 650,000 birds a week.
The origin story
Targan’s founder and CEO, Ramin Karimpour, grew up in the Boston area and received his bachelor and masters degrees in electrical engineering from Boston University. His career was basically 30 years of preparation to launch Targan. The places he worked were high-technology companies that developed biomedical equipment, machine visioning, electro-optical components, drug discovery equipment, and animal health solutions. His last stop before Targan was at the Pfizer/Zoetis animal health operation in Durham, where he was director, systems and bio-process engineering, from 2010 to 2015.
After five years, he was considering a move back into human health equipment. Karimpour says that changed after a conversation with a former colleague with a background in poultry, who suggested working on chicken vaccination. “He said, ‘That’s the problem you should be able to solve.’”
The vaccine challenge
The problem poultry processors have is that baby chicks had to be vaccinated very soon after emerging from their shells in large hatcheries, to keep them from contracting diseases. This usually involves spraying boxes of chicks, and hoping they will ingest the medicine, but many chicks don’t. Diseased chicks get other chicks sick as they are transported to the farms in North Carolina growing around 1 billion broilers annually, which traditionally required antibiotics to be used. Except that the world has been moving away from antibiotics in the food supply, which is a problem because poultry illness costs the industry $11 billion a year. There is a market for a better Day 1 vaccination system.
So around eight years ago, Karimpour, in his words, “put some things together,” and determined that with high-speed imaging, a system could be developed that would determine the exact position of a chick as it moved along conveyors. That positioning would allow the delivery of a vaccine dose to each chick, 28 chicks a second, moving through multiple channels.
He launched Applied LifeSciences & Systems, the previous name of Targan, and in 2015, he visited one of the largest chicken producer’s headquarters to discuss his technology.
“During the dinner, the gentleman, he learned all about what we were trying to do, and he turned around and said to me, ‘You know, while you have this chicken under your camera, why don’t you also take a look at the sex and if you can actually do that, then you have really solved a big problem for us.’”
It is important to determine a chick’s gender quickly after hatching, before chicks are transported to farms where they will be fed and grown. A male will take more time than a female to reach full growth. If you can’t tell the genders apart, you’re going to waste feed. The poultry business is focused on optimizing feed because that is the major cost.
Traditionally, that has meant employing a lot of folks who manually check chicks’ gender, so males and females can be separated and put on different nutrition programs.
“Knowing the sex of the chick at day of hatch will allow them to optimize their growth, their time on the ground, what you want to feed them,” says Liz Turpin, a Targan vice president and Ph.D. who has been with the company for nearly eight years.
Figuring out gender
Karimpour initially wasn’t sure how his system could determine sex. “And a very good board member of mine, who was actually accompanying me there, under the table hit me on the leg and said, ‘Say yes, you can.’”
“And I said, OK, ‘Yes, I can.’” Karimpour and his staff figured it out. The wings of male chicks and female chicks look different. What was needed were millions of pictures of chicks to train the system to quickly compare a picture of a chick with the data. And they developed humane ways of getting these baby chicks to spread their wings for the camera.
“That’s why it is always good to listen to the customer,” says Karimpour.
But a lot of good ideas never make it to market. Targan had a couple of other things going for it. Its innovations depended on technology that wasn’t ready that long ago. To do what Karimpour was trying to do required affordable high-speed computing and image storage, high-powered imaging technology, an array of sensors and fiber optics. And artificial intelligence software.
The other advantage Karimpour had was industry partners. In order to develop his machines, he needed access to a lot of baby chicks, both to work out the logistics of complex conveyors and sensors and to accumulate a lot of images of wings.
“We had good partners who actually allowed us to set up our machines or prototypes in their hatcheries,” says Karimpour, “and allowed us to send their chicks through our machines to get the best results we wanted.
“We made partnerships with our customers right from the start. I think one of the secrets of our success has been the fact that our partners have been our customers who have been working with us all along in the last seven years. And they gave us a lot of good ideas. They gave us a lot of access to the chicks.”
Eventually, Targan hopes to bring its technology to the hog and aquaculture industry. Last month, Targan announced it is joining a bioscience incubator on Prince Edward Island, a center of Canada’s aquaculture industry. Raising fish in controlled environments is challenging because of disease. “You lose 60% of them in the farm, from the time they are 10 centimeters to the time they become 50 centimeters, 60 centimeters,” Karimpour says.
Targan is working on technology that will be automated and won’t require taking the fish out of water. “I don’t want to be vaccinated in the water and the fish doesn’t want to be vaccinated outside the water.”
Karimpour anticipates expanding another 80 to 100 employees in North Carolina over the next 18 to 24 months, many in Raleigh where machines are assembled and research and development is located. But field service staff will be around the state and the Southeast, and that could be another couple of hundred employees over the next four years.
He has been successful in raising money. Karimpour received $225,000 from the National Science Foundation in 2016, which also brought Targan $65,000 from the One North Carolina small business program administered by N.C. Office of Science, Technology & Innovation. In 2017, it received $800,000 from the Foundation for Food & Agriculture Research (FFAR), a nonprofit established in the 2014 Farm Bill. This was followed by another $750,000 in 2018 from the NSF. In 2019, the firm raised $8 million in a Series A round co-led by Merck Animal Health and Mountain Group Partners. This was followed by a $7 million Series B round in 2021 and a $35 million Series C round in 2022 co-led by Mountain Group and Novaquest Capital Management. Existing investors Merck and Oval Park Capital participated.