National venture investment numbers were driven up last year by investors looking to be part of the buzz surrounding “disruptive” technologies that could change the way any number of industries do business.
One of those technologies comes from Ann Arbor-based AgriSight Inc., and its target industry is a little off the beaten investor path: farming.
The company is better known by its product — FarmLogs, a web-based farm management software that helps farmers track a range of data and better manage their operations.
FarmLogs soaks up data from public sources to give farmers ready, easy-to-view displays of information on market prices, rainfall, crop rotations and inventory.
The National Weather Service, for example, uses radar to provide rainfall data right down to the level of specific fields. But the information, raw and intended to predict floods, isn’t useful in its basic state, said Jesse Vollmar, one of AgriSight’s founders.
FarmLogs takes the information and spits it out in a readable format.
Similarly indecipherable are data from the U.S. Department of Agriculture that use satellites to detect what crops are growing on fields.
“A lot of these things have been available for a while now. They just weren’t being utilized,” Vollmar said. “Agriculture is an industry that gets overlooked by the tech community.”
The heightened connectivity and improved broadband speeds of the past five years or so have made it possible to use this data in the field, where farmers now can use smartphones to look up information.
Vollmar, who grew up on a farm, said existing software is still based on desktop computers and requires farmers to enter a lot of data.
“It’s so far behind what technology can do,” he said.
AgriSight founders Vollmar and Brad Koch put their concept through the Silicon Valley wringer by attending — or, more accurately, being allowed to attend — Y Combinator in Mountain View, Calif.
Startups apply for entry, and if accepted into one of the company’s three-month programs they get funding and access to the inner circle of Silicon Valley entrepreneurs and investors in exchange for a slice of equity.
Reddit and Dropbox are among the Y Combinator alumni.
Vollmar and Koch attended Y Combinator during the first three months of 2012, the same time they officially launched their business. They stayed in Mountain View for an additional month before moving FarmLogs to Ann Arbor to be closer to Midwest farmers.
Nearly all the farmers who use FarmLogs have gotten it for free. AgriSight gives it away so it can build up more data from farmers and make a better product. The company wants to build the dominant platform in the agriculture industry, not just a product used on such a platform.
“We don’t want to push people into paying too early. We want to get the product right first,” Vollmar said.
AgriSight raised $1 million in a seed round led by Huron River Ventures in Ann Arbor and joined by Hyde Park Venture Partners and Hyde Park Angels of Chicago.
As a Y Combinator participant, the company also received funding from Andreessen Horowitzin Menlo Park, Calif., and Start Fund, set up by social media investor Yuri Milner to invest in every Y Combinator company.
A Series A round raised an additional $4 million, AgriSight announced in January. Drive Capitalof Columbus, Ohio, led the round, joined by Huron River and Hyde Park. AgriSight will use the cash to further develop the product and double the number of engineers working on it. The company had no full-time employees as of early February.
No more rounds of funding are planned. “I’m sure there will be future rounds of financing, but we’re very well-funded now,” Vollmar said.
AgriSight is not looking for a quick exit through acquisition, aiming to build the product as much as it can. “We’re not in this to flip it,” Vollmar said.
An initial public offering down the road would be more suited to this plan.
March 9, 2014 | Crain’s Detroit Business – New Michigan Deal Supplement