A $40 million Series B round will help Johnston-based Growers Edge Financial expand its data analytics team and develop new warranties as an incentive to farmers adopting new practices, products and technology.
Founded in 2017, Growers Edge Financial recently closed the Series B round of financing, led by Seed 2 Growth Ventures, Cox Enterprises and Skyline Global Partners. Bunge Ventures and Finistere Ventures also contributed to the round.
“Our core customer is retail companies that sell seed and chemistry to farmers,” said CEO Dan Cosgrove.
“We create a crop plan for the farmers to follow. That crop plan typically involves working with the ag retail to figure out what products they have that work really well, and then that crop plan is then sold to farmers and has a warranty behind it. If the farmers hit the yield that they’re supposed to, that’s great … but if for whatever reason the product doesn’t perform, that farmer will get a check from us. It’s a way to help farmers really manage some of the risks that they have to deal with on a day-to-day basis,” he said.
Growers Edge develops warranties to fit seed, chemical products or digital management tools — a new market where Growers Edge works directly with the technology providers, instead of a traditional ag retailer.
Farmers receiving a Growers Edge warranty typically buy directly from the retailer, which contracts with Growers Edge to provide the warranty.
“Farmers take a lot of risk every year. Sometimes they want to try a new product, but they’re not 100% sure that the product is going to work well on their farm,” Cosgrove said. “What we want to do is create an incentive for those farmers to try some of those great new products that are being developed out there, both by ag retail as well as some of the smaller startups in the ag space — to create an economic incentive for them to try those products.”
Based in Johnston, Growers Edge has about 40 employees primarily in the Des Moines metro, serving a core market of 14 states in the U.S. The company is hiring 10 new positions in data science/analytics and product development over the next year and a half.
“There’s a lot of talent here that we would like to access,” Cosgrove said.
Farmers are primarily paid through yield, which warranties by Growers Edge now back, but the company is developing methods to predict the likely profit per acre as well, Cosgrove said. The company would also like to tie warranties to the adoption of sustainable farming practices.
“Today we really focus on corn and soy,” Cosgrove said. “It’s very important for us to be able to predict yield. … We are building an algorithm that allows us to not just predict yield, but show what it was in the past, and then to predict or look forward to see what the yield would likely be if we adopted some of these new tools and technologies we’re working with as part of our crop plan.
“There’s very good science around some of the new agricultural practices like regenerative agricultural or no-till farming. There’s a lot of people interested in promoting those types of efforts,” he added.