FARMLOGS RAISES $22 MILLION TO EXPAND ITS RESEARCH AND SALES EFFORTS
Jan. 12, 2017
Source: FarmLogs news release
Existing investors Drive Capital, Huron River Ventures, Hyde Park Venture Partners, SV Angel and Sam Altman, president of Y Combinator, also joined the round.
The round brings FarmLogs' total funding to $37 million since its launch in California in 2012. It also comes ahead of a 3-destination user conference next week.
Today, FarmLogs claims to be on 60 million row cropping acres in the US - 100k individual farms - through paid and unpaid farmer subscriptions. That represents 20% of the total row crop acres in the US. It offers a range of free and premium services including soil mapping, fertilizer application prescriptions, and crop health monitoring. [Scroll down for more information about the product and how it works.]
With the proceeds of the Series C round, FarmLogs intends to continue to build its footprint in the US row cropping sector. It will also keep up its pace of hiring new staff across engineering, data science, research, design, and sales; the number of FarmLogs' staff has doubled every year since launch. With its new, international investor, the company could look at expanding globally too, according to Jesse Vollmar, CEO.
"We're very excited about what we've been doing so far so the roadmap and vision don't change from here on. This round gives us more capital than we even need, but it brings on an excellent new partner with expertise in operating businesses globally who can help us when the time is right," he says.
Vollmar is in no rush to expand overseas or to exit the business, explaining that his investors are patient, particularly Naspers. The company invested in Tencent 16 years ago and has never sold a share, he says. "They don't operate on a traditional fund cycle and are happy to continue fueling businesses for growth. Sam [Altman] thinks the same way," Vollmar tells AgFunderNews.
FarmLogs has also ruled out the main exit route touted by agtech startups and their VC investors: a sale to a large agribusiness. Vollmar is proud of this independence and believes it works in their favor as they attract new customers. "When we're making recommendations to farmers, we're not then selling them any inputs; our advice is completely impartial and that's why farmers are signing up with us," he says. "I have always been very clear with my investors that the intention is not to sell to a large agribusiness."
Vollmar sees other exit opportunities such as an IPO - "there's definitely a large enough company to be built here" - or a sale to another industry leader in a non-related vertical. He references IBM's purchase of The Weather Channel to get into weather data. "We don't need to compromise our commitment to our customers to get an exit," he continues.
History of FarmLogs
FarmLogs started life in 2012 as an enterprise resource planning (ERP) tool - in layman terms, that's a record-keeping tool - to help farmers move away from spreadsheets, pen, and paper, and go online with an easy-to-use app.
From there the startup started collecting data off the farm in various forms and eventually moved into data analytics, offering farmers support in their day-to-day decisions. The startup has a few main product lines.
The Standard, which is free, includes field mapping, rainfall tracking, GDD accumulation - the measure of heat accumulation in the field, soil composition maps, scouting notes, activity tracking, yield maps, input planning, inventory management, and growth stage analysis.
FarmLogs Advantage includes nitrogen monitoring, crop health monitoring, and automatic activity recording.
And the Prescriptions service, which includes field-by-field prescriptions for applying nitrogen fertilizer and seed to maximize yields dependent on the productivity of each zone.
What data does FarmLogs use? It's all about satellite imagery
Some precision ag companies, such as Farmers Edge, use a combination of ground sensors, weather stations, imagery and more to offer insights and recommendations to farmers.
FarmLogs primarily uses satellite imagery.
"Sensor data is generally less useful than remote sensing," says Vollmar. "There can be tons of error in collecting data on-the-ground because there are so many variables. Machines might not be properly calibrated, for example, throwing up all sorts of inconsistencies and errors."
Instead, FarmLogs prefers to predominantly use imagery from Planet Labs, particularly data collected by the RapidEye constellation Planet Labs acquired in 2015. FarmLogs combines this high resolution, multi-spectral imagery with hyperlocal weather data, with other information such as precipitation intensity and soil type, to provide the insights its products offer.
These insights are produced by the startup's proprietary crop models, algorithms, and patented data analytics methodology developed over several years of ground truthing and research by its VP of science Tracy Blackmer.
"We've already analyzed data dating back to 2009 to develop our patented analysis of how to actually detect changes in the field and alert farmers to unique activities in-season," says Vollmar. "We've spent years going through a massive, treasure trove of multi-spectral imagery and correlating it with on-ground data to develop IP around that."
There's an intricate process around interpreting satellite imagery, Vollmar continues, which involves cleaning up spatial errors, detecting what is actually a crop and not a tree planted in the middle of the field that could throw off the model.
His colleague has a strong understanding of the correlation between imagery and real results on the ground, Vollmar adds, after working as director of research at the Iowa Soybean Association. There he developed the On-Farm Network program, which conducted over 3,000 trials with farmers, including some based on aerial imagery.
Not many startups offering a similar product today have yet had the chance to dedicate as much time to research and modeling as FarmLogs, and that sets them apart from the competition, argues Vollmar.