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11 years on: Conservis’ evolution into a fintech platform

January 8, 2020

“The last decade has been great, yet not without challenges. We’ve been part of the agtech community that’s laid the foundation for the adoption of agtech on the farm and the groundwork for what the next decade of agtech will look like. It’s been eye-opening, exciting and ultimately very meaningful. It takes time; a lot more time than people were prepared for, but we are at the end of the beginning – the time is now.”

Pat Christie is the founder of Conservis, a farm management software platform that was founded in 2009. Conservis focuses on giving farmers insights about the business of their operations. This compares to most others that provide agronomic advice.

“Farming is a trust-driven business and solving problems that matter for farmers takes time and we’re just getting to the point where it’s material. It’s not like other tech sectors where you can launch an app on social media and three months later have three million users and then three months after that maybe have none.”

So what “problems that matter for farmers” does Conservis solve?

Imagine you’re a multi-million dollar business selling products that require multiple people and pieces of machinery to manufacture and then multiple people and machinery to sell and transport, but you’re keeping track of all this on notepads hung up in a truck or warehouse, hopeful that the various people in the chain remember to record what last happened to the product so you can enter it into an Excel spreadsheet later? And what if your business relied on providing this information to third parties to keep your business afloat, such as banks for working capital loans or insurance companies to determine payouts? For any other industry, that would be unheard of; not only would they have dedicated personnel within a business who are not involved in the actual manufacturing to keep track of this, but there have been variations of accounting and bookkeeping technologies for decades.

That was not the case for farming until just a few years ago, arguably when Conservis came onto the scene as the first of its kind.

Where did Conservis come from?

Conservis was born from the team’s background in defense and enterprise systems and an initial contract to develop technology to help corporations understand their carbon and sustainability footprint for potential trading/reporting within regulatory and voluntary cap and trade markets. (The WRI is the body that helps govern standards.)

As part of that process, the team, which included carbon credit and ag supply chain expert Eric Jackson, came to interact with farmers initially as a discussion around traceability and sustainability/carbon reporting and how they could use that as an attribute to potentially get access to new markets or for compliance. That conservation soon broadened out and the team realized farmers didn’t have the same technology tools many other players in the supply chain had.

After Jackson chaired a panel at Soyatech introducing the concept of farmers being to able to organize their data, from understanding their cost of production to providing traceability through the supply chain, several audience members, including family farmers and large scale commodity producers, approached him afterward keen to see something like that come to life. The team spent six months getting to know a broad group of farmers across the country to understand their businesses and their key painpoints.

“I’d like to say we have grey hairs in the business and tech sectors but because we’re not farmers, we decided to really sit down and whiteboard their businesses; what difficult decisions are they making and where can organized data help them understand their core business needs to make those decisions. If you have the right data, it’s not hard to understand your cost of production, your inventory management and logistics needs, for example.”

After the carbon contract was not renewed, the team pivoted to focus full time on the agriculture industry. Fast forward 11-years and Conservis has a partnership with Rabobank AgriFinance to promote the adoption of the software tool among their farming clients to help them services their loans and other interactions with them.

How does it work?

Conservis collects a variety of data from the farm including field activities such as planting and harvest, purchases, the status of inventory including input products, contracts with buyers, grain delivery and crop storage information, and from the supply chain, such as grain cart scales measurements and delivery receipts from elevators. These data, which are gathered from multiple sources including integrations with Climate’s FieldView and John Deere, are uploaded to the cloud. They’re then monitored to provide farmers with the status of certain activities, such as machinery time in the field or work orders with staff. Farmers can also detect any problems that may be arising through the growing season and use the platform to make in-season decisions such as providing a cost-benefit analysis of spraying at a certain time or which seed to plant.

“There might be a really healthy, high-yield crop that you’d lose money on; we’re connecting those dots and giving farmers different scenarios such as different seeding rates or crop plans,” says Christie.

“We’re not proposing science such as based on this field and the predicted weather you should plant this based on this scenario; but what we do is take those recommendations or what you think you’re going to do and give you the business context, turning it into an activity plan of purchases, inventory, and work orders,” say Christie.

That analysis function also produces reports for farmers for accounting purposes that they can use to plan for the next crop season or share with key third parties such as landlords, banks, and insurers.

Were they tempted to build out an agronomics feature of the platform?

“Yes and we had farmers and investors suggesting it. But as we were trying to rationalize where this was all headed and we continued to assess all the learnings we’d made — and we like to think we’re a curious bunch — and we just continued to see a deficit in the business systems,” says Christie. “Our farmers and clients weren’t looking for another irrigation system; they were still struggling with some basic business things like understanding their cost of production and getting requests from lots of different people to provide them with information but not having a professional way to give it to them. Sitting down with a bunch of spreadsheets every night is not how they want to be spending their time, and if you don’t take into context the ability to operate and financial consequences, you can’t be making a good agronomics decision.”

Furthermore, Christie pointed out how different farmers can be in terms of where they focus their time. Some are really focused on agronomics but others are highly sensitive to operational logistics and deploying the right machinery at the right time and making the most of every minute of fuel burned. Others, meanwhile, are all about marketing and knowing how to get the best price for their product, and will that makeup for the weather? Conservis, he argues, has something for all of those different types of farmers.

Becoming fintech

Most farmers rely on loans and crop insurance or subsidies to run their low-margin businesses. Since all the income comes once, possibly twice a year at harvest, a farmer needs to fund his or her operating costs throughout the year. They also need insurance or subsidies to help weather any negative externalities that may occur during the growing season, namely the weather. But it can be a tough job for the providers of these financial instruments to get a complete and accurate picture of each client’s farm and give them the best price or product. The process can literally involve looking through a shoebox of receipts with a farmer and handwritten purchase forms, says Christie.

“Furthermore, if a farmer can prove how they think about their financial decisions and have business controls in place, they will get preferential treatment from these providers,” he adds.

Christie says that Conservis was helping farmers organize their data to present to lenders from the beginning but as they realized how big the need was, added additional features to help more directly such as lender-ready reporting as well the ability to see their financial credit and the picture they were painting for creditors in real-time.

“There’s so much opaque data in the farming industry and it’s not concentrated either. By its nature, farm management software is aggregating and collecting this data about the farm and can provide a consolidated view of a farm’s performance, with anything from yields to projected costs. That makes Conservis natural partners for banks that provide working lines of credit or any sort of lending to a farmer,” says Amanda Donohue-Hansen, vice president at Cultivian Sandbox, one of Conservis’ investors.

Conservis and Rabobank AgriFinance execs at the launch of the parnership

In this vein, Conservis partnered with Rabobank AgriFinance in December 2018 to improve how farmers report their business metrics to the bank. For Conservis this deal is a major distribution play and there are no financial elements to the partnership.

“To have two companies already working with farmers pair up like this, so I can break down the wall between the mountains of farm data and my financials, is something great,” said Aaron Lee, general manager of Cornerstone Family Farms in southern Indiana near Salem at the time of the announcement. “No other farm management platforms have cracked that nut. What Rabo AgriFinance and Conservis are doing is at the forefront of what this industry needs.”

Christie says that while the tie-up certainly makes client interactions and therefore perhaps a stickier relationship, Rabobank is genuinely committed to helping farmers succeed.

“Rabobank is a cooperative farmer-owned bank and they have a vision beyond finance into networks and knowledge and they have an opportunity to be unique in this sense,” he said. “The reality is farming is changing and the new generation will be more tech-savvy than ever and everything will become tech-enabled on the farm. Enlightened farmers that are enabled by new technology have opportunities far beyond the bank’s need for efficiency and easier risk management and Rabobank wants to be part of that.”

Conservis is also partnering with food companies that are keen to understand their supply chains and ensure they are selling what they claim such as non-GMO, organic and so on. That can protect them from headline risk but they also want their farmers to be de-risked and they know that using a service like Conservis will help them become more profitable and successful overall, says Christie. In turn, of course, that helps the food companies to secure their supply.

Go-to-market was the decade’s biggest challenge

“I think if we tried to start this company today, I don’t know if we could get the capital or the time to build what we have. I think a lot of agtech capital is hard to raise in serious amounts unless you’re going really big. Generally venture capital is highly functional capital looking for short term results. I think because we got early commercial success, we were able to build systemic partnerships with other tech tools, but if I was coming to market with a new technology today, going to market as a standalone product would be very hard, very expensive and I’m not sure it’s a workable model,” says Christie.

Conservis would not disclose its total amount of investment but said it had raised more than $50 million. Investors include Cultivian Sandbox, Middleland Capital, Pontifax Agtech, Closed Loop Capital and Heartland Farms.

Conservis has slowly scaled the business and now has 75+ employees, not including contracted services and developers, with row and permanent crop clients in 30 states in the US and Australia. It has also explored commercial expansion in Argentina, Brazil, Chile, the Ukraine and Russia.

Have you tried the Conservis software tool? Let us know what you think! [email protected]

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