Silicon Valley venture capital firm Kleiner Perkins Caufield + Byers is investing in ag technology with a new stake in Farmers Edge — which in turn now hopes to build its services’ popularity through more attractive pricing.
Winnipeg-based Farmers Edge is one of a number of companies hoping to profit from new technology by packaging data solutions for farmers.
Monsanto, for example, late last year purchased The Climate Corporation last year to provide better data solutions to farmers. Farm machinery dealer chain Rocky Mountain Equipment last week announced an alliance with Decisive Farming.
Many companies are offering variable rate fertilizer technology, telematics packages to help farmers manage fleets of machinery, satellite imagery during the growing season and localized weather information. Farmers Edge is packaging all of these services, along with soil testing.
“We’re combining everything to give farmers a total solution,” says Farmers Edge CEO Wade Barnes.
Farmers are keeping a close eye on input prices as commodity prices fall — but Barnes doesn’t believe that will be a hurdle for Farmers Edge. The company hopes to gain market share and increase its profits by offering a lower price point.
For Prairie farmers, the price of Farmers Edge’s full-service bundle has fallen from $8.95 last year to $3.95 per acre for next year’s growing season.
During its pre-investment investigation of the company, Kleiner Perkins interviewed several Farmers Edge clients and found that many were not using the service across their entire farms. Farmers Edge hopes that farmers will pay to cover more acres at this lower price, and that farmers on the verge of adopting precision agriculture will get on board.
“In order to get mass adoption,” Barnes said, “the price point has to be where it becomes a no-brainer.”
Farmers Edge has invested in a software development company and a research and development centre. The company “is leading the current disruption around how crops are grown, and ultimately how crops are valued, as traceability becomes an increasingly important factor in the food supply chain,” Kleiner Perkins partner Brook Porter said in a release.
Farmers Edge has also been expanding into the U.S. and plans to use some of the Kleiner Perkins investment to finance expansion into Australia.
— Leeann Minogue is editor of Grainews at Griffin, Sask.
Tagged farmers edge, venture capital