Archer Daniels Midland, one of the world’s largest grain traders and processors, has invested in a digital start-up set up to give farmers more power in agricultural markets long dominated by large companies.
ADM has invested in Farmers Business Network as part of a $300m capital raising round. Founded in 2014, California-based FBN’s platform has been dubbed a “Google for farmers”, providing its 33,000 members new distribution outlets for their crops and alternative options to purchase seeds and chemicals.
The investment comes five weeks after ADM and its rival Cargill sold their own farmer facing digital joint venture GrainBridge, to software company Bushel.
Chicago-based ADM’s investment also includes and announced a wide ranging tie-up with the agritech start-up including a partnership to develop markets for grains grown with lower carbon emissions.
ADM participated in FBN’s latest funding round led by Fidelity Investments, which valued the start-up at $3.9bn. ADM, which invested in a minority stake through its venture arm, declined to disclose the size of its equity investment.
Other investors include steel magnate Lakshmi Mittal’s family office and hedge fund manager Paul Tudor Jones’s investment vehicle, Tudor Investment Corporation. Investors from previous rounds, including BlackRock and Singapore’s Temasek also participated in the latest capital raising.
The expanded tie-up combines ADM’s vast network of grain storage, handling and processing facilities with FBN’s digital farm commerce and data-analytics capabilities.
In the past, FBN has alleged it had been blocked access to some markets by incumbent crop traders, while its push for transparency in the historically opaque market for agricultural supplies such as pesticides and seeds has unsettled traditional players.
Stronger links with ADM will provide wider market access for “low carbon” grain grown by FBN members who use regenerative agricultural practices, as well as help distribute FBN’s own brand seeds, fertilisers and pesticides, said industry experts.
“The deal is a big boost for FBN, which has faced roadblocks from established players in the agriculture industry,” said Louisa Burwood-Taylor, head of research at AgFunder, an agri and food tech VC which is not an investor in the start-up.
Amol Deshpande, FBN’s chief executive and co-founder, said the investment from ADM did not make a difference to the start-up’s position as a challenger to established agricultural companies.
“We are still challenging incumbent players. I don’t think the [tie-up] precludes anybody from doing business with us,” he said.
“I wouldn’t expect ADM to work with just one platform,” Deshpande added. “It’s good for a company to use multiple platforms.” He noted that FBN already had a relationship with Poet, a leading fuel ethanol company that purchases large amounts of US corn.
US crops trader ADM invests in digital agriculture platform
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