Start-up company designed to give farmers data, choices raises $300M in funding round
Farmers Business Network (FBN) – a global farmer-to-farmer company that connects farmers with products and technology they need – has announced the closing of $300 million in Series G funding. The networking company said it will use the capital to fuel the growth of its FBN Direct and FBN Financial platforms as well as hiring 350 new team members in the next year. It will also use the funds to “made significant investments in technology and data science.”
When Wisconsin State Farmer first published a story about FBN in April 2019, there were 8,000 farmer-members on the platform who were paying $700 for membership. Today there are nearly 34,000 farmers using it in the United States, Canada and Australia and the membership is now free. Farmers who are members operate 83 million acres of farmland.
Charles Barron, co-founder and chief innovation officer of the company, explained in a telephone interview with Wisconsin State Farmer that FBN has expanded its offerings in the seven years since they began. “There have been many updates to FBN since then,” and the Series G funding will help to build those services out to farmers even more.
The company first began offering seed to farmers in 2015 and crop protection products in 2016. Barron explained that when farmers join they have no obligation to share their data and they can choose from a variety of services that FBN offers.
“It’s very rewarding to have the vote of confidence of so many farmers and from these investors. We don’t take any of it for granted,” he said. “It is a tremendous validation to have that caliber of investor.”
The round of funding was led by Fidelity with participation from LN Mittal Family Office, ADM Ventures Investment Corp. as well as funds and accounts managed by BlackRock and by T. Rowe Price Associates. The funding will help FBN grow its “FBN Direct” and “FBN Financial” platforms. The first relates to selling products like seed and crop protection products directly to farmers and the latter helps farmers with various kinds of loans.
In a press release announcing the funding, the company said it would allow them to expand their financial offerings with new land, operating and equipment loan and insurance products to meet all the financial needs of farmers. On the FBN Direct side, the focus will be on crop protection, seed breeding and biologicals as well as robotics with on-farm research and development.
Barron explained that the designation of Series G funding means that it is the seventh round of investment for the company – earlier funding rounds having shown investors that the concept of the FBN has merit and had helped it to get started. Continued support from investors shows them that the technology and concepts they have built are a good idea and worth further investment, he said.
“We are very focused on growth and building the infrastructure that will make farms more profitable.” Barron thought that the $300 million investment was probably the largest ever for such an agricultural business. But he said the number wasn’t as important as the caliber of the investors who participated.
“It says that FBN is here to stay; it will be transformational for the business. These investors look at things very long term.”
The concept of FBN from the start has been that true price transparency serves to level the playing field for farmers – regardless of geography or size – and also enhances competition at the manufacturing, wholesale and retailing level. “We have research showing that when FBN sells a product, the price goes down dramatically across the board, even for those farmers who aren’t buying from us,” he said.
He was very excited about the investment from ADM – Archer Daniels Midland -- because it will help enable farmers to integrate selling their crops into the platform. “ADM is a major player directly supporting the FBN mission,” he said. The investment by ADM will allow farmers who are in the network to take advantage of ADM’s infrastructure and also allow ADM to link buyers of specific types of grain to farmers who grow it.
Verify carbon data
The new linkage will allow farmers to use FBN’s “Gradable” platform to measure and verify the carbon score of grain and other crops and allow farmers to connect with grain buyers who are looking for crops produced a certain way.
“By using this platform farmers sell their grain and capture environmental premiums,” he said. “ADM might have a buyer who only wants to buy no-till corn and using FBN data allows farmers to assure them that is how their corn is grown. It allows both parties to know the exact attributes of the grain.”
Barron said that the platform of technologies allows farmers to verify what they have done and underlies the Gradable platform. He foresees farmers being able to get more favorable loans because they will be able to use the analytical picture of their farm to show their savings on the front end of the crop and their additional profits on the back end – when they sell the crop. “This is way beyond a yield monitor,” he said. “It helps farmers capture value.”
POET, the world’s largest producer of biofuels and bioproducts, has been very interested in this aspect of the network, Barron said, because it is important to them to verify and source their corn from farmers who produce it in a certain environmentally sensitive way.
“We can expand that with scale along with ADM,” Barron said, “to develop end markets.” With a letter of intent to expand their existing relationship through a wide range of areas, Barron believes that the partnership with ADM will be a way for farmers to benefit on the marketing of their crop.
In its release announcing the expanded partnership ADM said the two companies had agreed to examine several areas of collaboration – developing premium end markets for low-carbon grain that will reward farmers for the adoption of regenerative practices. They will also explore working together to advance innovative technologies like those offered under the Gradable platform, to improve access and data security for producers who market grain to ADM.
That could take the form of enabling farmers who sell grain to ADM to use full digital transactional record keeping, sustainability tracking and payments through FBN. The partnership may also allow FBN members to purchase ADM products like fertilizer and animal feed through FBN’s platform.
The two companies are also continuing their pilot program that was launched earlier this year, to use FBN’s Gradable platform to measure and verify the carbon score of soybeans. “The system will allow farmers to improve their bottom line from both the input purchasing and the marketing side,” Barron said.
Growth in direct sales
Since 2019 the FBN Direct program has seen dramatic growth in the availability of seeds and crop protection products, he said. This program sells farmers “anything needed to run the farm” and is the same price nationwide, Barron said -- “whether you’re a farm with 100 acres or 100,000 acres.”
The distribution system for those products is through FBN’s own 25 warehouses placed around the United States and Canada. “That allows us to get products to farmers in a short time. That’s really important and it’s what we’ve all come to expect when we order things.”
In addition FBN has gotten into animal health products purchasing Prairie Livestock Supply in Worthington, Minnesota, allowing them to serve dairy, swine and beef producers with livestock products.
The company has also acquired a plant breeding company and a crop protection product manufacturer and has signed up 450 Farmer/Partners to help local farmers in their area to purchase through the FBN Direct program. These Farmer/Partners earn a commission. “They don’t hold inventory and FBN handles all the billing and delivery but this allows farmers to have a side business,” he said. “They just consult with the farmers locally.”
The new round of funding will allow FBN to increase the size and scope of its FBN Financial arm, which offers farmers a full line of farm loans – for inputs, land and other needs. The financial branch also offers crop insurance.
One area of FBN that has seen significant growth is a health insurance program that is now in place in all 50 states, Barron said. They offer an individually underwritten plan for farm businesses that can be used for farmers and their employees. Farmer/members have reported saving as much as $1,800 a month on the FBN plan, he said.
FBN currently has 800 personnel and offices in San Carlos, California, Chicago, Sioux Falls, South Dakota and a Canadian headquarters in High River, Alberta. There is an Australian office in Perth. Australia was new to the platform last year.
“We have farmer members with nine head of bison and others with 100,000 acres of cropland – and everything in between,” Barron told us. “We now serve farms of all types over a broad swath of American agriculture.”