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Indigo Acquires Satellite Imagery Startup TellusLabs for ‘Living Map of World’s Food Supply’

December 13, 2018

*UPDATED DEC 13 2018, 5:58PM ET: Adds quotes from Geoffrey von Maltzahn at Indigo and David Potere at TellusLabs.

Indigo Agriculture, the microbial ag products startup-cum-agribusiness marketplace has acquired TellusLabs, a startup using satellite imagery to monitors the world’s croplands.

Indigo will integrate TellusLab’s data into its growing digital agriculture platform that today predominantly consists of farm-level data from trials undertaken with partner farmers in its Indigo Research program.

TellusLabs built its satellite imagery analytics platform originally to sell insights to non-farming clients such as commodity traders, governments and insurance companies. The platform uses machine learning algorithms to predict crop yields globally by tracing farm management decisions and agronomic parameters in real time, including field boundaries, crop type, planting, and harvest dates, and overall crop performance.

Indigo has several business units after starting off by buying back and selling grain grown by farmers using its microbial seed-coated products across wheat, cotton, soybean, corn, and rice. It now offers a wealth of other services to growers including grain quality testing, storage, and financing, as well as the grain marketplace. Using its growing dataset, Indigo aims to provide, grain buyers with certifications about the quality and sustainability credentials of the crop.

The new data from TellusLabs will be relevant across business units, including helping Indigo to market its microbial products based on a grower’s yield potential and unique land characteristics. The technology’s forecasting capabilities will also improve its sales process to grain buyers as well as presumably pricing on the marketplace.

The company says it will also share insights from TellusLabs data with its grower partners through the agronomic services it offers to farmer clients.

“We imagine the combination of satellite data and machine learning providing a spectrum of insights to growers — from the past, in the present, and for the future of their farms,” said Geoffrey von Maltzahn, Indigo’s Co-Founder and Chief Innovation Officer in a statement. “Understanding each field on its own terms, identifying the features that make them unique, and predicting the best products and growing practices for every acre of land are tricky, nebulous agricultural questions. With Indigo’s acquisition of TellusLabs, a farmer looking to grow his or her best crop can receive personalized data and recommendations that change the course of a growing season for the better.”

von Maltzahn told AgFunderNews that there will be more products based off the satellite data and analysis TellusLabs brings to the business through “expanding the digital aspects of the marketplace” but would not disclose anything further.

“The power of this transaction will touch the end-to-end Indigo business, helping growers to match products to their fields in more accurate ways, make decisions during the season with more confidence on their impact on profitability, and better match agriculture production predictions and quality features with what buyers are looking for when they interact with the marketplace,” he said.

TellusLabs, which founded in 2016 by David Potere, PhD, and Mark Friedl, PhD, was previously based out of Somerville, Massachusetts. The company initially partnered with Indigo Research Partners, Indigo’s initiative to evaluate agricultural technologies. One significant collaboration included the analysis of over 40,000 acres of land to determine yield and quality improvements for the 2018 Indigo Wheat harvest. The team will integrate as Indigo’s Geospatial Innovation unit.

All 14 team members will join Indigo in a transaction that is very exciting for TellusLabs staff, according to former CEO and now head of Geospatial at Indigo David Potere.

“We have the opportunity as a team to accelerate our technology agenda by years, and in terms of impact, this transaction has short circuited us into one of the most exciting agtech companies in the world today,” he told AgFunderNews.

An acquisition was likely from the start, according to Potere, who said the work his team was doing with Indigo was “special from the start.”

Von Maltzahn agreed but added that it’s not the intention of Indigo’s Research Partners program to acquire startups.

“Tellus became an exception to the rule because of the degree to which we saw we could continually collaborate to create something of greater and greater value to growers, and the more closely we interacted the more impact we could have. Even with a super collaborative relationship, there were boundaries of being customers and providers and we were just scratching the surface of the possibilities of combining the datasets,” he told AgFunderNews

There is a small but growing trend of agtech startups buying others. Earlier this year, digital insights platform Taranis acquired aerial imaging startup Mavrx, water management technology SWIIM acquired OnFarm, and Concentric acquired ATP Nutrition in the first of many planning acquisitions, according to the company at the time.

Other startup acquisitions include indoor ag group Plenty acquired Bright Agrotech last year and Granular buying AcreValue.

Rob Leclerc, CEO of AgFunder thinks this spate of startups acquiring other startups is a warning signal for the slow-moving food and agriculture incumbents.

“Some of the best-funded startups have been quite aggressive with M&A,” he said. “This potentially creates future supply problems for the large ag companies who’ve largely been sitting on the sidelines waiting for some of these early-stage companies to mature. One the one hand, these corporates want to see companies with strong revenues, but on the other, most are unwilling to write a big check. Unfortunately, there’s no free lunch with innovation and they’re going to have to realize that there are digital assets that they’re going to need in their portfolio and the longer you wait, the more likely it is to be bought or priced out.”

“Contrast this with the tech industry where you see a much more aggressive approach early-stage M&A by the large corporates. In many cases, those large tech companies learned lessons from their predecessors. Yahoo! is famously remembered for not acquiring Google for $1,000,000 because the search capabilities were too good and it would canibalize their business model.”

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