We thought that might get your attention! No, it’s not quite what you think. But it’s close.
HarvestPort, a Californian startup, is matchmaking farmers to farm equipment that they don’t own and they don’t want to buy. And, like Tinder, it’s fast becoming a service that users didn’t know they needed, until now.
As we all know, agriculture is a seasonal business, with various different activities taking place on the farm at different times of the year. It’s also an asset-heavy industry, with a range of different equipment needed at different times of the year.
Seasonal assets, like harvesting bins, are left for much of the year idle, collecting dust, and providing no value to the large farming businesses that own them. On the flipside, smaller farming organizations do not have the budget to acquire equipment that’s only used for a few months of the year.
Realizing this dynamic, HarvestPort has created an online marketplace to enable agribusinesses to lease their equipment for some extra cash.
“There is a lot of value being left on the table with underutilized assets and equipment throughout the supply chain,” Drew Taylor, head of New Ventures at Taylor Farms, the major Californian produce grower told AgFunderNews. “HarvestPort is using technology to unlock that value for growers and processors alike.”
And on the other side, agribusinesses that do own equipment seasonal equipment can rent it through the platform without the administrative, and sometimes complicated burden of doing it directly.
“HarvestPort’s B2B marketplace helps agribusinesses to avoid friction caused by sudden shifts in market preferences, weather events, and labor shortages–all while keeping capital in the industry,” said Tim Koide, cofounder of HarvestPort.
The platform officially launched in March 2016 and now has over 100 clients, which are all large-scale produce packers and processors, listing assets worth over $16 million.
How does HarvestPort work?
A farming organization that wants to borrow equipment inputs in HarvestPort a request for the type of equipment it needs, its location, and the price it would pay. Those lending assets also pick the price they want along with listing their location and HarvestPort then makes a match based on these preferences. After the platform makes a match, the borrower and lender are in touch to agree to a price and the terms of the deal.
While HarvestPort does not arrange delivery and transport of the equipment for its user, it prompts them to document terms around transportation to record the key logistics and financial information, “but clients are still free to employ their own preferred freight partners,” according to Brian Dawson, cofounder and CEO.
Users have a seasonal planning dashboard where they can plan leases or rentals ahead of time, taking into account variables like the weather, government regulations, and market prices.
HarvestPort is responsible for invoicing the borrower for the lease, tracking the equipment, and ensuring accountability of the deal by listing upfront in the farmer-to-farmer online contract all potential costs associated with the equipment rental, like replacement value or repair. The platform can then easily convey any problems immediately on the return of the equipment, to avoid what Dawson says was a common pain point for the industry previously.
“This has seen borrowers receive an invoice for damage months after an asset has been returned, and trying to piece together which side was responsible was complicated and awkward,” he said.
“Equipment sharing goes on all the time between local farmers, but it often involves little more than a handshake agreement and so can create a lot of friction, especially if farmers have felt obligated to lend to their neighbors or other acquaintances,” he added.
HarvestPort makes money by charging a 10% fee on all transactions.
How HarvestPort differentiates itself
HarvestPort is not the first online sharing platform for equipment. MachineryLink Sharing is one example that developed out of a combine leasing business, down in Australia there’s AgTribe, Key Cooperative is helping farmers in Iowa access equipment during the current lull in commodity prices, and Farm-r is a farmer-to-farmer rental platform in the UK.
While Dawson welcomes other options as validation of the model and business, he argues that HarvestPort has a few key differentiators.
“The other options on the market are focused on helping small, independent growers that can’t afford all equipment to share among themselves, and while that’s a noble idea, the only real way to help them is to bring in the large agribusinesses that have larger balance sheets, and therefore large inventories of equipment,” he said.
“I want to help the little guy leverage the system,” he added.
HarvestPort also differs from other online sharing platforms that post photos of the equipment and show who the owners are.
“We match users to equipment more like a blind dating service, as that’s how we get the large agribusiness to come onto the platform,” he said. “They won’t want to put all their inventory online in their name because people can make inferences about their operation from that and they feel they could lose their competitive advantage.”
HarvestPort is also focused on specialty crop farming businesses at the moment, particularly in California, as the “low hanging fruit where there is little competition and much need” said Dawson.
The design process
HarvestPort’s initial wireframes were designed at a Google Design Sprint organized by agtech innovation collective Farm2050. Dawson and his co-founders Ian DeWeerdt, Carson Britz, Chad Hokama, and Tim Koide came up with the idea and invited local Californian farmers, while Google sent over UX developers and Farm2050 brought venture capital investors. The developers then built a simple version of the platform, the farmers tested it, and “it was that event that galvanized everything” said Dawson.
Dawson and his cofounders had previous experience in equipment leasing but with companies that owned the equipment. They came up with the idea for HarvestPort when they were frequently asked whether they could lease out off-season equipment for local ag businesses. Not only does the HarvestPort model benefit these users, but it’s also less competitive with equipment manufacturers than asset-heavy leasing businesses.
While HarvestPort is focused on California at the moment — it has office space at the Western Growers Center for Innovation & Technology in Salinas — it is also expanding to other parts of the country. Major ag retailer Wilbur-Ellis, for example, is currently evaluating the potential for HarvestPort to manage asset sharing within its network outside of California.
“In California, we farm every month of the year so we use our equipment all of the time, but in the colder wetter states, our asset utilization rates could be improved. If we could get another month of use on our assets that would be a big deal,” said Mike Wilbur of Wilbur-Ellis.
HarvestPort is now raising a $8m Series A round of funding to expand the business. It closed a $2 million seed round of funding with impact investment fund Fifth Season Ventures and Taylor Ventures, the investing arm of Taylor Farms, in 2015.
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