Germany’s Agrando has raised €12 million ($14.3 million) in Series A funding, which it claims is the largest round on record at that stage for an online agribusiness marketplace startup.
Yabeo Impact led the round, with new investors Sony Innovation Fund and Investbridge joining in. June Fund and JLR Star were among the return investors to participate in the round.
Agrando was originally established by CEO Jonathan Bernwieser and chief technology officer Jonas Hueber in 2015.
Bernwieser’s the second son in a South German family that “has been dairy farming for generations,” he tells AFN. With his older brother destined to take over the farm, Bernwieser trained as a software architect. That’s when it dawned on him that smaller farming operations were in sore need of tailored tech tools.
“When you’ve gone into engineering and you compare how farmers do their day-to-day business, you realise a lot of thing’s don’t add up,” he says.
‘We’ve started this business twice’
Agrando started out as a straightforward intermediary platform, where farmers could create order requests for inputs.
“It worked – but not enough,” Bernwieser says. “We were not adding enough value to put a profitable business model on top [of the marketplace.] We needed to diversify our approach. So we liquidated the company and started completely from scratch.”
“We’ve started this business twice.”
The startup’s second incarnation launched in 2017.
“One of the big learnings [from the first attempt] was that we knew we wanted build something we could really internationalize,” Bernwieser says. “I’d realised the need [for farmers and suppliers] to find new distribution and purchasing channels. But if we wanted to do it right this time, we needed to build a solution that is much more tailored towards this market.”
Today, Agrando aims to connect various stakeholders in the ag value chain — including farmers, ag retailers, and suppliers — using “technically optimized trading processes, data-based analyses, and trade-specific, personal advice” to help them “make better decisions and become more profitable,” Bernwieser says.
The Munich-based startup has close to 20,000 farmers registered on its platform, with around 1,000 new members singing up each month. It claims to offer the largest selection of ag inputs across Europe’s German-speaking countries, and expanded into France earlier this year.
Bernwieser says the Series A funds will be used for international expansion, scaling up operations, and investment in R&D.
Among its ongoing projects on the product development front is a recommendation engine which will offer Agrando’s member farmers product and service suggestions based on their operations’ specific situation, he explains.
“We onboard the farmer and add the specific characteristics of their farm into our system, which matches them with geographically tailored agricultural expertise to better understand which inputs can maximize their productivity per hectare.”
This new feature will be rolled out to farmers who have signed up for Agrando’s ‘Pro’ membership tier, which is “mobile-first” and charges a subscription fe, with farmers getting a dedicated account manager in return (Agrando Basic is free to use but omits the more highly personalized services.)
Another new addition in the works is an outputs-oriented marketplace that will help farmers sell their produce.
“This isn’t something we do right now, but we are running our first pilot. And as you can imagine, that first pilot is my parent’s farm!” Bernwieser says.
Inputs, outputs, impacts
Expanding from helping farmers buy inputs, to assisting them with selling outputs, aligns with Agrando’s wider objective of delivering social impact for Europe’s smaller-scale ag businesses and helping consumers to eat local produce. This is also what brought new investor and Series A lead Yabeo Impact on board, according to Bernwieser.
“They bring a big network, and a lot of talent and a lot of expertise in how to really grow and scale a business,” he says. “They also have this impact component which works well with our strategy: what we focus on is not the large ag holdings with thousands and thousands of hectares. We focus on regional, small-scale farms, and we want to build an international network of these farmers not just to help them procure inputs, but also sell their output in a more profitable way [with] the focus on regional consumption.”
To get there, Agrando is already eyeing up a Series B raise by some point next year.
“In the end we want to put our foot on the accelerator, start growing, and have Agrando active all across Europe in the next five years. But, as always, that always depends on the speed the market adapts to these new solutions,” Bernwieser says.
In a statement, Yabeo Impact board member Saskia Becker said that “climate change, scarcity of resources, globalization as well as the pressure for sustainability and reduction of CO2 emissions pose new challenges for agriculture.”
“The digital transformation of agriculture has already begun and innovative companies worldwide are flocking to the agtech and foodtech segment to help shape the agriculture of the future,” she added. “Agrando has exactly the right solutions. [It] plans to digitize European agricultural trade and make small-structured farms in particular more efficient.”
Gen Tsuchikawa, corporate vice president at Sony and chief investment manager at Sony Innovation Fund, said that Agrando’s platform “enables farmers to analyze and understand what they need in order to make the best decisions and connects them with trusted suppliers, forming a network which will allow the participants to more swiftly adjust to the changing environment.”
“We believe the benefits to the participants will continue to evolve as more data is gathered and various measures are taken based on the data to benefit the farming process,” he added.
According to AgFunder‘s global 2021 Agrifoodtech Investment Report, companies in the Agribusiness Marketplaces category raised a total of $1.1 billion across 89 deals in 2020. [Disclosure: AgFunder is AFN‘s parent company.]
Two of the top three deals in the category last year involved Boston’s Indigo Ag, which raised a combined total of $535 million as it streamlined its business to focus on grain trading, carbon farming, and inputs.
Another US-based marketplace, Farmers Business Network, raised $250 million to place second between Indigo’s two rounds. It also moved into the carbon credits market recently.
Agrando closed a seven-figure seed round in February 2020.
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