The round is an extension to the startup’s $15 million Series B in May 2015, or a “Series B-2 round” in the words of Charles Baron, co-founder and vice president of product for the company. Farmers Business Network will use the new funding to further expand its team, which has already increased to 90 from 56 in February of this year.
The California-based company brands itself as an independent farmer-to-farmer network cooperative, providing farmer members with data support services, agronomics, and data aggregation support. Launched in 2014, the company reports that its membership has tripled in the last year with farmers subscribing in new states like Kentucky, Tennessee, Texas, Alabama, and Oklahoma.
Funding for precision agriculture startups helped to drive the top line investment numbers during the first half of this year, according to AgFunder’s Mid-Year 2016 AgTech Investing Report. The space captured $333 million across 58 deals involving 99 unique investors.
In February, Farmers Business Network debuted its FBN Procurements platform, offering farmers access to better pricing information for some 200 chemical products. The platform is designed to take some of the confusion and mystery out of purchasing crop inputs while cultivating more transparency and fairness in the market. After researching price disparities in the chemical inputs market, FBN concluded that farmers could pay up to 300 percent difference for the same product and even 40 percent difference within an hour’s drive.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
One of the main hurdles for the procurement platform has been whittling down the delivery time to meet farmers’ needs. Now, the program offers 1-3 day delivery for in-season products, says Baron.
To further aid the company’s campaign for price transparency and the democratization of information, Farmers Business Network recently launched a platform that allows farmers to upload their invoices and receipts anonymously. If Farmers Business Network receives a sufficient number of price reports, it posts the information for its network to review.
What does Farmers Business Network place such importance on price transparency and competition in inputs?
“This is a very hard year for farmers,” says Baron. “Not only was there an excess of corn acres planted, but we may also have a bumper crop. Corn was already in a weak price environment and looking even more bearish. The University of Illinois released a series of studies showing how input prices have risen in absolute and relative bases in the last 10 years and are taking an even higher share of farmers’ revenue. This combination has been extremely difficult for farmers.”
Despite the undisputed squeeze on farmers’ margins, some companies have had no qualms about letting their disapproval of FBN’s procurement platform and price transparency platform.
Paul Schrimpf, the editor of CropLife publication, described it as “the devil known as ‘price transparency,’” in an article in February. He painted images of growers storming into retailer’s offices with price sheets and demanding lower input prices.
“There has been a strong reaction from the industry who are very opposed to price transparency—and just in this simple form where we provide lists of prices from different states for comparison,” argues Baron. “It’s not even the level where we are providing actual basic invoices from farmers showing what they are being quoted. Farmers have been very frustrated and fed up with this for a long time.”
Acre Venture Partners’ (AVP) general partner Gareth Asten stands behind Farmers Business Network’s mission to democratize input prices. For him, the same spirit behind the company’s transparency crusade is one of the main drivers behind the $125 million fund.
“We’ve known FBN for a long time and wanted to invest from the get-go,” Asten tells AgFunderNews. “What they stand for, how they align with the interests of the farmers, how they think about price development and disrupting what’s inside of the ag ecosystem today; those things align philosophically with what we think about the future of the farm system.”
Acre Venture Partners takes first strides
Since closing the fund in February 2016, AVP has made eight investments including Back to the Roots, Juicero, TerraVia, and Solazyme. The other four investments remain unannounced for the time being. And while many media outlets have described AVP as Campbell’s venture arm, Asten eagerly notes that while the mega packaged foods maker is the fund’s sole limited partner, AVP stands completely independent from Campbell’s and has full autonomy.
Although AVP had its heart set on backing Farmers Business Network, they’ve considered a few other plays in the big data and precision ag space.
“There certainly is a need for continued capital and expertise in the space, but for us in particular, we like that information gives power, and power is knowledge. Farmers Business Network takes information and makes it more useful. The democratization of information is something that we think is really, really key in an environment where information has been tightly held.”
Farmers Business Network’s pricing model also allows farmers of any skill-level and scope to engage with the network’s information and data services, he notes.
In the broader agtech market, drones, mechanical innovations like precision harvesting, and other technologies that serve up better outcomes, also interest AVP. When it comes to CPG, Asten says they’re keeping a close eye on developments in the microbiome space that may have applications to human health and nutrition.
And while there is an ever-growing bounty of new startups hitting the scene, Asten believes it will take more than just a handful of technologies to help address the major pressures on our current and future food systems.
The value in Farmers Business Network
To be successful, however, each company will need to demonstrate value.
“In my experience — and I don’t speak for everyone — farmers are very open to new technology and new sources of information to help them make better decisions,” says Asten. “The question is at the end of the day is how do you create something that is valuable for the farmer where they can identify a very discrete value-to-action orientation?”
Achieving this result will, of course, require many innovators to include the farmer at the drawing board. A common mistake among many companies is creating the solution before they’ve really understood the problem instead of asking farmers questions about the problems they actually face on a day-to-day basis, he says.
“I think that’s what’s unique about FBN. One of their taglines is ‘Created by Farmers, For Farmers,’ but it’s really true,” he adds.
Farmers Business Network’s growing employee roster will mostly consist of field representatives serving a variety of capacities, with an emphasis on providing direct farmer support.
“They will be doing a bit of everything,” explains Baron. “Our field team really builds the community. They help farmers use the system, help with data, and they are now helping with the procurement program.”
Its employees are stationed throughout the US, including Montana, Ohio, and Arkansas, and it’s planning a substantial expansion at its Sioux Falls center, which currently houses 27 employees.
This latest round of capital brings the company’s total funding to $48 million and included existing investors Kleiner Perkins Caufield & Byer, GV (Google Ventures), and DBL Partners.
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