Farmers Business Network (FBN), a farmer-to-farmer network offering data management and input procurement services, has raised $40 million in Series C funding co-led by Google’s venture arm GV and San Francisco-based impact investor DBL Partners; both existing investors.
The round attracted a new investor in Bow Capital, a San Francisco-based firm backing companies using technology to better the world. Returning investors Acre Venture Partners, which Campbells Soup is the sole LP of, and Kleiner Perkins Caufield & Byers also participated.
Since starting out as a farm data analytics and management company in 2014, FBN has come a long way, and this round brings its total funding to nearly $88 million.
The company has since expanded its product offerings to include agricultural input procurement services, crop marketing services, and financing at the same time as boosting its membership. The network has grown to encompass roughly 3,500 farms throughout the US covering 13 million acres of farmland, including both commodity and specialty crops.
“Our mission is to help farmers democratize the farm information they are generating in a way that transforms their business,” Charles Baron, VP of product and co-founder of FBN, tells AgFunderNews. When it comes to the increasingly crowded precision agriculture space, he believes this is a goal not only worthy of everyone’s time, but necessary.
We are democratizing access to venture capital. Learn how you can invest with us.
“The onus is on every company in this space to figure out how it is helping farmers and exactly how it is bringing real, substantial value to farmers. And not just a few bushels here or a few dollars per acre savings there, but radically transforming their businesses and creating different cost profiles.”
So how does FBN work towards this mission? First, its agronomics platform allows farmers to upload a wide variety of data sets from their farms. FBN then provides the customary bevy of agronomic services like yield monitoring, weather data, and variable rate prescriptions. What possibly provides even more value to FBN members, however, is that the data is then benchmarked anonymously against other farms in the US, the state, or even the county.
“This benchmarking allows farmers who want to build a network using technology to share information and to leverage that data to advance their agronomic and business practices,” explains Baron.
This optimization of aggregated data didn’t stop with seed analysis and benchmarking. After speaking with its board of farmer advisors, Baron and FBN learned that there was a real concern among farmers regarding the prices they were paying for inputs.
“Quickly, farmers were so enthralled with seed intelligence that they wanted to figure out what to do to analyze price intelligence as well,” he says. FBN set to work researching the issue by asking members to upload information about what they were paying for inputs across the country. Soon, FBN discovered what Baron describes as “some shocking stuff.”
Based on its members’ price data, FBN discovered a critical lack of transparency in the input pricing market, where confusing rebate sets, regionalized pricing, and a lack of manufacturers’ willingness to share their prices left many growers in the dark and unable to determine if they were truly getting a good deal. The primary goal of FBN Direct, the chemical procurement service, was to create a national, fixed, no-haggle price for inputs with an emphasis on transparency.
This service has not been without its critics, however, particularly among retailers that say FBN is trying to disrupt their longstanding relationships with growers. Baron dismisses these criticisms, arguing that FBN is focused on improving the industry altogether.
“We wanted to give farmers the independence to reduce input costs and to avoid retail markup or dealer markup. People misinterpret us and say we are opposed to input makers, but we are just trying to create a more competitive market for our farmers so the best products and the best prices can win,” explains Baron. “We are happy to talk to any input company that wants to list on FBN or sell to our members.”
Originally just offering ag chemicals, FBN Direct now covers more than 500 farm chemicals, fertilizers, seeds and seed treatments, and more. According to FBN, it completed 1,000 deliveries in the platform’s first year of operation.
It wasn’t always obvious that input procurement was the end goal, but it soon made a lot of sense, argue Wheeler and Baron.
“When GV made its first investment in FBN, it was clear that the current method of monetizing the service wasn’t going to build a big business [it costs just $600 a year to be a member of FBN], so there was always a plan to find other ways to monetize once we had members,” explains Wheeler. “[Procurement] very quickly showed promise and got us to sit up and take notice. It very quickly showed amazing promise.”
Within the last year, FBN Direct has also started to offer financing for its members who purchase input products through the platform. Baron describes this as a big hit among members. FBN’s service listings are also popular, helping farmers find service providers like independent chemical applicators for hire.
With all these new offerings in the procurement side of farming, it may be easy to forget that FBN started out as a farm data analytics solutions provider. The company’s entrepreneurial and farmer-driven ethos has also driven growth in this side of the business as well.
“We just mapped all the fields across the United States for topography and soil type. This allows us to help farmers evaluate different fields they have based on the unique characteristics of that field,” says Baron.
The company also updated its seed selection system, FBN Yield Potential. This service examines each field a farmer owns and suggests the highest performing seed for that field based on data from other members. It looks at many factors including soil type, weather, topography, irrigation, drainage, and historical yield rates. After each harvest, the system then goes back to see whether the recommendation lived up to its promise to help calibrate the system’s accuracy. The more members FBN has in a region, the more accurate the recommendation will likely be.
“We had so many cloud-connected combines in the FBN network feeding yield data in real time to our system that we updated the harvest continuously. The national yield for FBN was basically set on November 1,” explains Baron. “We were able to email this information to our members along with comparisons to the prior year—eight weeks in advance of the UDSA.”
Perhaps its newest venture, however, is what Baron calls FBN’s crop marketing services.
“With this, we are helping our members to market their crops directly and to realize premiums. They can also use the data from their crops to gain those higher premiums,” he says. “Lots of companies want to source directly from growers for traceability, information about the supply, and a connection to the story of how the crop was grown.”
This service shows members their P&L, on a daily basis, adjusted to local prices and growing conditions, providing a more complete real-time understanding of a farmer’s overall business—not just the crop.
This menu of services and products culminates in quite an attractive value proposition for farmers—something more than just farm data analytics.
“Sometimes people talk about FBN as just precision data. We do that, but what we are doing is helping members use data to transform their whole business, not just agronomics. To create a better farm economy for them,” he explains. With crop prices in decline, a better farm economy is in strong demand among America’s agriculture community.
In light of FBN’s many new product offerings, it comes as no surprise that the new round of funding will be used to help the company achieve continued growth, develop new technology, and expand its membership base. It’s also looking to hire more employees across the United States as member services personnel.
FBN isn’t GV’s only food and ag technology play. The firm is invested in alternative milk manufacturer Ripple Foods, food safety Clear Labs, satellite imagery company Orbital Insight, smart sensors and IoT technologies, Helium, and biofuel-cum-bio-inputs company Cool Planet. GV first invested in FBN’s 2015 Series B.
“What caught my eye about FBN was the rapid growth they saw early on,” said Wheeler. “One of the general challenges with agtech startups in the digital space is finding efficient ways to get people into their system, and it seemed like FBN cracked that early on.”
“We are very bullish on the sector overall, and we have seen that it will bring the next-wave productivity growth to agriculture. We look forward to seeing where FBN goes and making more investments into the space as well,” says Wheeler. As for any overheated sectors in agtech, he sees some issues with imagery analytics and imagery itself. Although it’s proven useful for certain specialty crop farmers who can afford to analyze the imagery, the value proposition is less clear for the commodity crop crowd, he says.
With so many irons in the fire, it’s difficult not to ask Baron how FBN views its priorities and how it allocates its focus. His answer? Back to the company’s main goal:
“I really just focus on what we can do for farmers.”