Both companies will be equal partners in the fund, which has $50 million in capital. Named Cooperative Ventures, the operationally independent vehicle will seek out startups that demonstrate a “strategic fit” with CHS’s and Growmark’s broader activities.
It will primarily look for opportunities in three core investment areas: crop production, supply chain, and sustainability.
Growmark and CHS will provide Cooperative Ventures’ portfolio companies with “unprecedented access” to to their respective distribution networks and multiple value chains, they said in a joint statement.
Between them, the pair “cover millions of acres and thousands of farmers that will create an industry-leading test field for products and services within North America,” the statement said.
The Cooperative Ventures team will work out of offices in St Paul, Minnesota — near to CHS headquarters — and Growmark’s home town of Bloomington, Illinois.
“This partnership will help accelerate technology solutions to existing and emerging challenges in agriculture and is yet another way CHS creates connections to empower agriculture,” said Jay Debertin, president and CEO of CHS.
“Our ongoing commitment to investment in growth and innovation for the benefit of CHS owners and the cooperative system further places CHS and Growmark at the forefront of cutting-edge technology solutions by leveraging our deep expertise and strong connections with farmer-owners.”
Growmark CEO Jim Spradlin described the establishment of Cooperative Ventures as a “terrific opportunity” for both founding companies.
“[We are] working together on a venture meaningful to agriculture and our corresponding supply chains,” he added.
“Both Growmark and CHS have trusted relationships and expertise within our networks, which will provide tremendous value for technology startups and ultimately benefit our respective customers. This is a natural evolution of Growmark’s AgValidity trial and testing program.”
Growmark launched AgValidity in early 2019 in order to vet agtech products and services on behalf of its farmer-members. Through AgValidity, Growmark has partnered with a number of agtech startups to trial their offerings with its farmer community. Among them is Growers Edge, with which it developed a yield guarantee program. It also teamed up with Solinftec to test digital ag solutions with a view to enhancing farm efficiency [disclosure: AFN‘s parent company AgFunder is an investor in Solinftec.]