Semios raises $100m to scale precision ag platform with more acquisitions likely

Semios, the Vancouver, Canada-headquartered precision ag platform, has closed $100 million in late-stage funding.

The round was led by Morningside Group, a Boston-based private equity and venture capital firm. It brings the company’s total funding to $225 million, following a previous $100 million raise in February 2020.

That previous round had enabled Semios to go on an acquisition spree earlier this year: within three months, Semios acquired Altrac, Centricity, and Agworld, creating what it says is one of the world’s biggest agtech platforms with more than 120 million acres under management globally.

The acquisition of Australia-headquartered Agworld, which was valued at over $100 million according to Semios founder and CEO Michael Gilbert, brought the vast majority of those acres into the fold. It also expanded Semios’ remit into broadacre crops from its historical focus on permanent crops.

Semios was founded in 2010 to help tree, vine, and nut growers manage pests and collect data about their crops. It does this by deploying sensors to measure various data points like leaf wetness and soil moisture, as well as recommending actions like trapping insects and dispensing pheromones. After expanding the platform’s capabilities into other areas like irrigation management, Gilbert soon became aware of growers’ desire for more consolidation among agtech tools. “They didn’t want 10 different logins or to have to bring data from one tool to another, so we invested in creating a seamless process,” he told AFN in the wake of the Agworld acquisition.

The company asked their clients which products they liked and started its roll-up strategy, first targeting Altrac for its frost and irrigation control capabilities, then Centricity for its farm activity record-keeping, and Agworld for its huge footprint and popularity among farmers as a whole season farm management and documentation tool.

Today, according to Gilbert, one of Semios’ most valuable offerings is helping its growers make forecasts to help them decide when to take certain actions, such as applying inputs, as well as helping them logistically by prioritizing certain fields over others. (we heard a similar story from Intelinair recently.)

“We’ve worked hard to provide true forecasting tools to make data actionable; to be actionable in ag, you need forecasting,” he added.

Last February’s fundraise was focused on acquisitions as well as accelerating the company’s international footprint, Gilbert said. And it sounds as if today’s new funding will be similar.

“We will continue to talk to customers about what they would like to see and you will probably see more strategic partnerships and acquisitions from Semios,” he told AFN.

Semios now has 200 employees globally. But it wasn’t always smooth sailing.

This will probably sound familiar for most farm management software platforms out there; the biggest challenge Semios faced was its go-to-market strategy. 

“There were two main pathways for us, through the retail channel or not,” Gilbert said. “In the beginning, we tried the retail channel and then we went direct. In our case, we found that because we have boots on the ground and a full-service solution we have to deliver anyway, it made more sense to go direct. The benefits are obvious: direct connections with customers can drive product development pathways, but the downside was scaling — direct sales can hamper the ability to grow fast — so you have to get creative.”

Ultimately the trade-off was worthwhile, particularly as it enabled Semios to learn more about its customers and build its own salesforce. In fact, Semios has started turning that salesforce to other, third-party products, creating a new source of potential revenue.

“Today, a lot of retail channels’ primary focus is not precision ag — it’s chemicals and seeds — and there aren’t a lot of dedicated precision ag retail channels out there. So if there are young companies out there, we’re happy to help,” Gilbert said, adding that these types of partnerships can include customer service and installation too.