Weather network and analytics company Understory has raised $7.5 million in what it describes as a growth round led by 4490 Ventures. DC-based firm Revolution’s Rise of the Rest Seed Fund, which was founded by former AOL CEO Steve Case, also joined the round as a new investor. Rise of the Rest focuses on companies located outside of Silicon Valley, New York, and Boston; Understory is based in Madison, Wisconsin.
Launched in 2012, Understory analyzes and processes data to create real-time datasets, views, and actionable information from historical, current and forecasted weather events to provide better insights and early detection of risks. It collects data regarding rainfall, temperature, humidity, evapotranspiration, and growing degree units that can help determine if the plant is in the right stage of its lifecycle for harvesting. The information that these data points yields assists with irrigation and seed production decisions as well.
Existing investor Bayer Growth Ventures (formerly Monsanto Growth Ventures) also participated in the round which is a bridge to a “much larger” Series B at a later stage, according to Alex Kubicek, co-founder and CEO. In February 2016, the startup raised $7.5 million in a Series A led by Monsanto Growth Ventures (now Bayer Growth Ventures), which helped the company pivot towards agriculture from providing data to insurance companies in cities. In 2018, Monsanto helped the company deploy its weather stations in South America.
“We’ve had a lot of success in the ag space by being able to see how weather impacts fields in rural areas where satellite weather stations wouldn’t be able to function,” Kubicek told AgFunderNews. “We are using these proceeds to expand the team throughout the world as well as our offering on multiple continents.”
The company plans to use the new funds to expand the startup’s presence in the international agricultural market. The startup has deployed over 500 stations throughout five major metropolitan areas in the US and intends to expand nationally to 5,000 stations by the end of 2018. Understory’s composite of granular weather data has applications across a variety of markets beyond agriculture including broadcasting, forecasting, and risk mitigation.
Under today's unique circumstances, AgFunder is re-opening Fund III for a limited time to enable investors to join our mission and invest alongside us as LPs in a second close. Learn more here.
The raise was completed relatively quickly according to Kubicek, who cites the company’s traction with existing investors as part of the momentum. According to him, the technology and results speak for themselves.
“We are a Midwestern company and Revolution’s Rise of the Rest’s thesis is that there are a lot of interesting companies in the Midwest. They’ve made a portfolio focusing on companies in the middle of the country, so one of the strong suits of that strategy is that they were able to help us find talent in the middle of the country when most people believe you can only find talent on the coasts, which is not the case,” explains Kubicek.
Landing a spot on Forbes’ 25 Most Innovative AgTech Startups in 2018 and having its VP of engineering named one of Forbes’ 30 Under 30 within manufacturing, have also helped the Madison, Wisconsin-based outfit garner more attention.
A good number of startups have developed technologies intended to help farmers have greater predictability around the weather and more reliable data that they can use to improve their operations. Investors see a clear value proposition with weather-focused technologies, especially as climate change makes weather more extreme and more volatile.
Just last month, tropical weather forecasting service Ignitia raised a $1.1 million Series A to help small-scale farmers in Africa obtain weather data via text message. Skymet, which provides climate, weather, and crop analytics to various industries in India, raised $10 million in a Series C during December 2017. Another big player in the ag weather space includes Colorado-based aWhere, which offers agronomic weather data analytics. It’s raised $19.6 million to date.
Understory promises a new type of weather data because its sensors analyze conditions directly at the earth’s surface, compared to traditional, radar-enabled weather stations that collect data from the atmosphere. It argues that this “ground-truth-based detection” leads to better real-time and hyperlocal insights into weather conditions, particularly in the aftermath of a storm. The company is named after the area in a rainforest under the canopy.
The hardware design of its product also offers a unique advantage.
“We can install our weather stations in a field without anyone needing to touch it for 10 years. That enables us to have a business model where we don’t sell weather stations, we deploy, own, and operate them,” Kubicek says. “Many companies try to get weather data from a radar or satellite, or another way to look at the sky, but we think the data has to be taken at the ground. The way that we are deploying sensors is the only true way to understand how a field is affected by weather.”
While the product is primarily deployed with corn, Kubicek says it is rapidly expanding into other crops.
“A lot of precision ag plays think about how to get value out of the farmer, but we believe in looking at the entire supply chain and the value chain of agriculture and working with different players.”