Farmers Business Network has raised $110 million in new venture funding to support a business that may sound boring to some Silicon Valley technologists but which appears to have addressed a unmet need: it’s a social network for farmers that invites them to share their data, pool their know-how, and bargain more effectively for better pricing from third parties.
It’s a real business. The subscription-based, members-only platform costs these farmers $600 per year. In return, they share seed and other crop-related data with other members, who then use those findings to determine the seed and pesticides — and the vendors — that will help them goose their bottom lines. Indeed, FBN, as it’s called, makes it easy for farmers to upload, store and analyze the data coming out of a variety of tools they collectively use, from drones and satellites to mobile apps and on-the-ground sensors.
That’s just one part of FBN’s operations, however. The three-year-old, San Carlos, Ca.-based company has also more recently launched an e-commerce arm, selling products like herbicides and fungicides that it purchases directly from manufacturers and distributors, then sells at what it says are lower-than-average costs. (It houses the products in nine of its own warehouses across the country.)
FBN is further building out a marketing product that promises to connect farmers with thousands of possible buyers who may want their specific specialty crops and who will pay a premium to know more about the source. Imagine the food company that says it wants 10,000 acres of a precise variant of soybeans that have not been genetically modified. FBN says it can get those who farm them a better price for it; the food company is meanwhile armed with information about what fields the beans are coming from and it can even, potentially, watch them via satellite imagery.
All three hooks are appealing propositions for the farmers, who’ve generally been hard hit by years of falling crop prices — not to mention hurt by lousy deals on seeds and other items that are often sold to them by manufacturers who obfuscate their pricing.
Blue chip investors like FBN, too — this despite competition from startups like Manitoba, Canada-based Farmers Edge and Granular in San Francisco and even seed giants like Monsanto, whose Climate Corp. division provides farmers with similar tools. In fact, today, FBN is announcing that it has raised a whopping $110 million in fresh funding co-led by T.Rowe Price and Temasek, the wealth fund owned by the Government of Singapore.
The blue-chip investors clearly see FBN as more than a curiosity. That’s partly because FBN’s members now represent just shy of 5,000 farms across the U.S. and Canada, and collectively manage roughly 16 million acres of farmland — a land area larger than West Virginia – says FBN cofounder and head of product, Charles Baron.
Among the crops farmed on this land are oats, sweet peas, lentils, wheat, corn, and soybeans.
Investors are also eyeing the bigger picture, he suggests. More than 170,000 people make their business by farming major crops, yet they have among the lowest return on their assets because they’re so fragmented, leading to information asymmetry and a lack of bargaining power. If FBN can convince this much broader base of potential customers that it puts farmers back in the driver’s seat — as well moves them closer to food consumers — it becomes very well-positioned to capture a huge market.
FBN is making headway, certainly. The young company already counts 200 employees around the U.S. Now, it expects to use its new cash infusion to do more hiring and generally “accelerate the business,” says Baron.
Part of that means pushing more aggressively into Canada, “whose farmers face the same problems that all farmers face, as far as their disadvantaged position in the [broader food] market,” Baron says.
Part of that capital might also be used some day by FBN to create some of the products it is currently selling to farmers, like seeds and pesticides. “Theoretically,” says Baron, FBN likes the idea. For now, however, FBN remains a “data network first and foremost” he adds. “We’re really focused on creating a digital farm economy in ways it has never existed before.”
In addition to T.Rowe Price and Temasek, earlier investors GV, Kleiner Perkins, and Campbell Soup’s Acre Fund, also joined FBN’s newest round, which is its Series D.
The capital brings the company’s total funding to roughly $200 million.