Just as startups are starting to address the entire food supply chain (hence the term agrifood tech), agtech companies are learning through experience that the financial realities on farms present both challenges and opportunities for innovation.
It’s no surprise then that company’s of various kinds are branching out from the world of agrifood tech into the world of fintech, both to make their products more accessible to their target customers and to generate more value from their core offerings.
Because farm finance is local, these startups show more geographic diversity than many other industry cross sections. Many also address geographies with high numbers of smallholder farmers who are largely locked out of new technologies.
This list looks at eight agtech startups either firmly planted in fintech, or soon headed in that direction. Not included in this list are companies providing data to financial institutions and insurers like Software, Sensing, and IoT startups Astro Digital, Descartes Labs, Farmobile, Geosys, Granular Measure, and S4.
Crop Pro Insurance – United States
As well as offering typical crop insurance coverage for weather, pests, flooding, and price fluctuations, Crop Pro Insurance , which claims to be the first VC-backed insurer to be approved to offer federally-backed policies, aims to promote agtech adoption through unique private, agtech insurance products. So, if a farmer decides to try a new biological yield enhancement product, for example, and purchases a policy on it from Crop Pro, the farmer can make a claim and recoup some of the investment if the product doesn’t work as the manufacturer forecasts.
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Crop Pro raised an $8 million Series A round in August led by ag-focused venture firms Finistere Ventures and S2G Ventures. Established insurance provider GuideOne Insurance also joined the round. Lead investors Finistere and S2G are bullish on Crop Pro’s potential to disinter-mediate the adoption of agtech across the country, although the true impact of the program to jumpstart agtech adoption will depend on which technologies the policy will cover and how they will decide. Sanjeev Krishnan of S2G told AgFunderNews upon the funding announcement, that after solidifying a customer base, the ability to underwrite risk using data science could open the door to more innovative financial products, like technology loans, for example.
Farmecco – Australia
Launched in May by Agrihive, a collaborative organization that launched during the worst drought in Australian history, Farmecco aims to increase the net wealth of Australia’s farmers by capturing all the financial elements of their businesses in an online program and generating live reports that will help them to review all their costs and improve their revenues.
It focuses specifically on improving the number of units farmers sell, and improving the price of the units they sell, but also provides key information to help farmers with succession planning, a core concern as the average age of Australia’s farmers continues to increase. These tailored reports, which Farmecco can turn around in an hour after farmers input their information, can also be used by farmers in their interactions with lenders, accountants, law firms, consultants as well as family members, also helping to improve performance. Farmecco has raised $600k in seed funding from Australia’s Department of Agriculture and Australia’s meat industry association Meat & Livestock Australia (MLA). Agrihive founder founder James Walker also contributed $150k of his own capital into the startup.
Farm Drive – Kenya
FarmDrive is a fintech startup helping farmers to get bank loans by creating credit scores for them. When banks consider someone for a loan, they want to see a credit history and some collateral. Smallholder farmers rarely have either and also rarely have business records as they tend to mix their home incomes and expenses with those from the farm, Mary Joseph, director of partnerships at FarmDrive, told AgFunderNews. They may also be illiterate, she added.
FarmDrive is solving this issue by generating credit scores for farmers for banks to use to loan to them. It does so by using data input by farmers into its smartphone and SMS mobile app — an app that helps farmers to track their revenues and expenses — as well as satellite, agronomic and local economic data. By analyzing these datasets, FarmDrive’s algorithm is able to generate credit scores for farmers. The company raised funding from the venture arm of Safaricom, the biggest communication company in East and Central Africa, Safaricom Spark Venture Fund.
FarmDrive is also developing decision-making tools for financial institutions to use to create financial products suitable for the economic and agronomic needs of smallholder farmers, such as tailoring the payback timeline to match with harvests.
Farmers Business Network – United States
Farmers Business Network (FBN) started life as an ag data platform with the intention of helping farmers manage their data and gain insights from each other on areas such as seed selection, compare productivity, and benchmark field performance over time. The platform predominantly collects data extracted from farm equipment but also aggregates farmers’ manually recorded data. It later launched a seed finder app to share seed performance results and research with farmers to help them make better purchasing decisions. Using data collected and crowdsourced from farmers about their seed and other input purchases, FBN was able to bring transparency to an otherwise opaque input pricing system.
The input procurement business FBN Direct is now an e-commerce platform enabling farmers to discover and purchase supplies completely online — FBN Direct launched as an over-the-phone service initially — which also offers farmers credit on their purchases through flexible payments or loans via third-party providers. This part of the business, that enables farmers to share their farm data with financial providers, could naturally develop into a more general farm loans marketplace in the future, Charles Baron, cofounder and VP of product told AgFunderNews last month.
FBN raised $110 million in Series D funding last month, which brings FBN’s total fundraising to $200 million. The company will use the latest proceeds to build out this crop marketing platform with the intention of enabling buyers from all over the globe to buy directly from US farmers.
myAgro – Mali
myAgro is a mobile savings system enabling farmers to pay for crucial inputs like seed and fertilizer in pre-paid installments. The farmers purchase myAgro scratch cards at their local village store — much like prepaid minutes for a mobile phone — and they text a number on that card which turns this into a digital payment and deposits the cash into a mobile money account. myAgro then holds onto that layaway payment until it’s time for planting when it bags bulk purchases of seed and fertilizer and then delivers them to a distribution point within 5km of where the farmers live and work. myAgro earns commission on these sales.
“Being a farmer is risky enough regardless of how much money you have; taking on a loan increases that risk and is a huge burden,” said CEO Anushka Ratnayake to AgFunderNews in 2016.
Dalberg Global Development Advisors reported in 2011 that farmers need $450 billion a year in financing but that only 3% of that is available to them through banks. In turn, that 3% is reaching only 7% of smallholder farmers globally.
Produce Pay – United States
Produce Pay is an online platform that connects farmers directly with distributors and pays them for their produce the day after it’s shipped through a lending platform. Farmers are often left waiting for produce to sell before they’re paid, leaving them in a risky financial position post-harvest. Produce Pay is also launching a trading platform to connect vetted growers and distributors all over the world.
Founded in 2015, the company raised $7m Series A funding in March. CoVenture led the round and arranged a $70 million debt facility for the startup too. Other investors were Menlo Ventures, Arena Ventures, CoVenture, Red Bear Angels and Social Leverage.
RML Agtech – India
With millions of farmers working less than two hectares of land, relatively low productivity and high input costs, RML Agtech is hoping to alleviate some the pressure on Indian agriculture with its multi-function, online agtech platform. The technology started as an information service for farmers using SMS texts; Reuters started this information service in 2007 providing farmers with commodity prices, crop and weather data for roughly $1.50 a month. Rajiv Tevtiya, CEO of RML, later spun out the business and transformed it into the platform it is today.
The platform has expanded a lot since then. It still offers the same information but via an app, and no longer SMS, and it’s free. The main product offers farmers detailed, in-season agronomic advice and decision support. It has also created a marketplace to sell produce nationally, and a fintech product to connect farmers with banks and input retailers.
RML has also created a marketplace for farmers to buy and sell products and inputs, generating comparisons to Farmers Business Network in the US. Where the two startups differ, however, is in their model. FBN has famously kept subscription charges relatively low — $500 a year per farm compared to several thousand dollars that other precision ag software startups charge — but is focusing its revenue generation on a cut from these extra services. RML Agtech is focused on the subscription model by comparison.
Stellapps – India
Stellapps is an Indian data collection and analysis stack for the dairy supply chain.The company’s applications include SmartFarms (for milk production), smartAMCU (for milk procurement), ConTrak (for the cold chain), AgRupay (a dairy farmer wallet), and MooKare (an animal insurance data product). The full stack includes 26 different sensors across the chain. On the farms, wearable devices collect animal specific data from the cows and buffalos.
Though most of StellApps products deal with efficient and transparency for all parties in India’s dairy supply chain, it’s wallet product allows farmers and processors to make electronic payments in real time.
Along with providing a service to farmers and distributors, CEO Ranjith Mukundan told AgFunderNews that local financial institutions have already expressed interest in his data as a way to gauge the size of the Indian dairy market and trace the movement of dairy products around the country.
Though Indigo Agriculture isn’t technically venturing into fintech territory, the company’s innovative business model fundamentally changes the financial calculus of farming for its customers, so it is worth mentioning here.
Indigo Agriculture‘s product portfolio includes microbial seed coatings for corn, soy, wheat, and cotton. These coatings help crops to withstand environmental stressors such as drought, high temperatures, salty soils or low nitrogen and bolster resistance to disease and pests. The company also claims its products produce higher quality crops, such as increasing the protein content of wheat.
Indigo does not sell its microbial coated seed product to farmers like most ag input suppliers; instead, the company enters into contracts with farmers, providing them with the seed at the start of the season and then purchasing their harvest for a guaranteed, premium price.
Indigo offers its farmers a $0.47 per bushel premium for corn and a $0.43 per bushel premium for wheat, which is a 10-15% uptick.
The Boston-based microbial crop technology startup, closed its Series D funding round on $203 million, the largest fundraising effort by a farmtech company on record, this month. Indigo’s Ex-agtech VC Gabriel Wilmoth described this as a “cashless farming” approach amid a growing trend for innovative business models among agtech startups. In an industry where farmers are cash poor globally and there is limited information about whether new technologies work or not, companies need to get innovative about how they get their products into the hands of farmers.