That’s drawing more interest in new farming technologies such as autonomous tractors, plant sensors, drones and data-management software that will probably generate $240 billion in revenue by 2050, according to Goldman Sachs Group Inc. Farmers will be forced to adopt new technologies at a faster rate, the bank said.
At the same time, investors who found success in the tech boom are hunting for the next opportunity, Slaughter said.
Midwest Investment
Tech veteran Mark Kvamme co-founded Columbus, Ohio-based Drive Capital in 2012 with an eye toward investing in the Midwest. FarmLogs, an Ann Arbor, Michigan-based company that gives farmers data about the health of their fields, is one of the projects Drive Capital is backing. In January, the firm helped raise $22 million in a Series C round of financing.
“In Silicon Valley, nobody understood farming,” Kvamme said in a telephone interview. But now, more investors are looking at the industry as another type of “data science,” where gains and losses are quantifiable, he said.
So-called ag-tech started drawing more attention from investors after a big takeover was announced in 2013 by Monsanto Co., the world’s biggest seed maker, said Jesse Vollmar, chief executive officer and co-founder of FarmLogs. Vollmar grew up on his family’s farm in Michigan and started the company out of Y Combinator in 2012. Monsanto paid $930 million for Climate Corp., which specializes in agricultural data.
With farmers looking for any advantage to protect shrinking profit margins, they’re more open to adopting new methods of growing and selling their crops, said Aki Georgacacos, managing director and co-founder of Avrio Ventures LP, an investment firm that focuses on food and agriculture companies.
Raising Funds
In March, Avrio was part of a Series A round of financing that included Monsanto Growth Ventures, the company’s venture capital segment. The financing raised $6.5 million for FarmLead, a company that allows farmers to sell crops online.
Also in March, Arable Labs Inc., a company that’s selling a Frisbee-shaped tool that can be mounted on adjustable rod in fields to collect data, raised $4.25 million. Fred Bould, who designed Alphabet Inc.’s Nest learning thermostat, also designed the Arable device.