GROWMARK, CHS Launch $50M Agtech Fund

GROWMARK and CHS, two major North American farmer-owned ag supply co-ops, have created a $50 million venture fund called Cooperative Ventures. Here's what you need to know:

• Focus: Crop production, supply chains, and sustainability

• Duration: 10-year plan (5 years investing, 5 years scaling)

• First investment: Sabanto, a self-driving tractor company

• Offices: St Paul, MN and Bloomington, IL

Key benefits:

- Startups get access to huge distribution networks

- Co-op members get first access to new farm tech

- Potential for extra income from successful investments

The fund aims to boost practical, game-changing farm tech that farmers actually want. It's part of a larger trend of cooperatives investing in agtech to shape farming's future.

This move shows co-ops are serious about driving agricultural progress and helping their members stay competitive in a rapidly changing industry.

About the Cooperative Ventures Fund

GROWMARK and CHS, two big ag co-ops in North America, teamed up to create a $50 million venture fund. Their goal? Boost farming tech and practices.

Here's how it works:

• 10-year plan

• First 5 years: Invest

• Next 5 years: Scale and grow

GROWMARK and CHS share decision-making power. This setup lets them play the long game in supporting agtech startups.

David Black from CHS puts it this way:

> "What is differentiating about Cooperative Ventures is that we are two cooperatives working together with a focus on the farmer."

The fund zeros in on three areas:

1. Crop production

2. Supply chain efficiency

3. Sustainability

Why these? They asked farmers what they needed.

They've already backed Sabanto, a company working on self-driving tractors. Since 2018, Sabanto's been rolling out autonomous machines for row crops across the U.S.

This move shows the fund means business when it comes to practical, game-changing farm tech.

2. Big Cooperative Investments in Agtech

2.1 GROWMARK and CHS's $50M Fund

GROWMARK and CHS have teamed up to launch a $50 million venture fund called Cooperative Ventures. Their goal? To supercharge farming tech and practices across North America.

The fund focuses on crop production, supply chain efficiency, and sustainability. It's a 10-year plan: 5 years for investing, 5 for scaling. We're talking millions of acres and thousands of farmers.

Their first investment? Sabanto, a company working on self-driving tractors. Talk about practical, game-changing tech!

Jay Debertin, CHS Inc.'s president and CEO, puts it this way:

"This partnership will help accelerate technology solutions to existing and emerging challenges in agriculture and is yet another way CHS creates connections to empower agriculture."

2.2 Other Key Cooperative Investments

Cooperative Ventures isn't the only player in town. Here's what else is happening:

1. Traction Ag's $10M Series A Round

Cooperative Ventures led this funding round for Traction Ag, a farm accounting tech leader. It's the first cloud-based accounting software for U.S. farmers, aiming to help them make smarter financial decisions.Dustin Sapp, Traction Ag's CEO, says:

> "This round of funding will enable us to scale faster, reaching even more farmers with our decision-making solutions that drive real value at the farm gate."

2\. **Climate-Focused Solutions**

Cooperatives are putting money into climate-friendly agtech. While we don't have specific examples, it's clear they're thinking long-term about farming's environmental impact.

3\. **Farmer Business Enablement**

Cooperative Ventures is eyeing tech that helps farmers run their businesses better. Think financial planning, inventory management, or market analysis tools.

These investments show cooperatives are serious about agtech. They're not just following trends – they're shaping farming's future.

3. Common Themes in Cooperative Agtech Funding

Cooperative agtech funding is targeting key areas with big potential for farmers. Here's what's hot:

Precision Agriculture

Cooperatives are all-in on tech that maximizes efficiency:

• AI crop advisors

• Digital twins for virtual field trials

• Smart sensors for real-time data

These tools boost yields and cut costs. Digital twins could save $47 million on field trials for new crop protection products.

Sustainability and Regenerative Ag

Funding is flowing to planet-friendly, profit-boosting practices:

• Carbon sequestration tech

• Soil health monitors

• Methane reducers for livestock

Two companies just scored big for seaweed-based products that cut cattle methane. It's clear: eco-friendly is in.

Supply Chain Optimization

Getting food from farm to table faster is key. Money's going to:

• Last-mile logistics

• Blockchain traceability

• AI demand forecasting

The goal? Less waste, more transparency.

Farmer-Centric Business Tools

Tech that makes farm management easier is getting attention:

• Cloud accounting

• Market analysis tools

• Farm management platforms

Traction Ag's recent $10M round, led by Cooperative Ventures, proves it. Their cloud accounting is built for U.S. farmers.

Data Management and Analysis

Farm data's exploding - IDC says it'll grow 800% by 2036. Funding targets:

• Big data analytics

• ML crop predictions

• Multi-source data integration

It's all about turning data into farmer-friendly insights.

The bottom line? Practical, impactful tech that farmers actually want. As CHS CIO David Black says:

> "We chose those three areas not only because they fit the strategy for both companies, but because we heard through feedback that those are what our owners are looking for."

It's all about putting farmers first in agtech funding.

4. How Cooperative Investment Helps Agtech

Cooperative investment in agtech is a win-win for startups and farmers. Here's why:

4.1 Perks for Startups

Agtech startups get more than just cash:

• Real-world Testing: Thousands of farmers provide instant feedback

• Ready Market: Co-op members are potential customers

• Ag Know-how: Co-ops bring decades of farming experience

Phytelligence, a biotech startup, got $500k+ from farming groups. Founder Amit Dhingra said:

"When I started the company, I was grateful that the industry was the first to come to the table with financial support."

This farmer-backed funding helped Phytelligence create tech farmers actually needed.

4.2 Effects on Cooperative Members

Co-op members aren't just investors - they're shaping their future:

• First Dibs on Tech: New tools to boost yields and cut costs

• Extra Income: When startups win, members can too. Ag Ventures Alliance returns about $1.5 million yearly to members

• Custom Solutions: Startups solve real farmer problems

Cooperative investment creates a stronger ag ecosystem. Startups get the resources to grow, and farmers get tech that works for them, plus a chance at extra cash.

5. Hurdles and Things to Consider

Cooperative agtech ventures face some tough challenges. Let's break them down:

5.1 Possible Problems

1. Limited Capital

Money's tight for many cooperatives. The USDA found only 21 use base capital plans to link equity to current users. This makes big investments a real headache.

2. Slow Decision-Making

Group choices? They can drag on forever. Think about GROWMARK and CHS launching their $50M fund. Bet that took some long talks.

3. Balancing Act

Cooperatives juggle member needs and investment goals. It's tricky. As Cornelius Blanding, Executive Director of the Federation of Southern Cooperatives, puts it:

"The cooperative is only as strong as its weakest member."

So, you've got to tackle individual issues to boost the whole group.

5.2 Key Points to Consider

Risk Management

Farming's unpredictable. Weather, market swings, policy shifts - they all impact returns. Cooperatives need solid risk assessment for agtech investments.

Member Education

Many cooperative members aren't business experts. Teaching finance basics is crucial. It helps members get those complex decisions, like the GROWMARK-CHS fund launch.

Market Competition

Cooperatives face tough rivals. They need to stand out. That GROWMARK-CHS fund? It's aiming to do just that by backing cutting-edge agtech.

Regulatory Hurdles

Agtech investments might face extra rules. Cooperatives need to navigate these carefully to avoid legal headaches.

6. What's Next

6.1 Future Cooperative Roles

Cooperatives are gearing up to play a bigger role in agtech. Here's what's on the horizon:

1. Joint Ventures: The GROWMARK-CHS partnership might kick off a trend. We could see more co-ops joining forces to share resources and risks.

2. New Investment Areas: Co-ops might expand beyond their current focus on crop production, supply chain, and sustainability. They could dive into data analytics, precision agriculture, or farm-to-table tech.

3. Startup Partnerships: Co-ops might do more than just fund startups. They could offer testing grounds for new tech or become early adopters, potentially speeding up innovation.

6.2 Future Investment Areas

Co-ops are likely to zero in on these hot spots:

Potential 50% drop in water use

Autonomous Machinery: Cooperative Ventures' investment in Sabanto shows this is already on their radar. Craig Rupp, Sabanto's CEO, says:

"Cooperative Ventures' investment is a testament to the importance of autonomy in the future of row crop agriculture."

AI and IoT: These technologies could reshape farming and will likely be big investment targets.

Sustainability Tech: With growing environmental concerns, expect more cash flowing into green agtech solutions.

The agtech market is set to hit $22.5 billion by 2025, up from $9 billion in 2020. Co-ops will want their slice of that pie.

7. Wrap-up

The $50 million Cooperative Ventures fund from GROWMARK and CHS is a game-changer for agtech. Here's the scoop:

It's filling a crucial gap in ag finance, helping smaller farms get the cash they need. The fund's laser focus on crop production, supply chains, and sustainability tackles the industry's big issues head-on.

But it's not just about the money. As GROWMARK CEO Jim Spradlin puts it:

"Both Growmark and CHS have trusted relationships and expertise within our networks, which will provide tremendous value for technology startups and ultimately benefit our respective customers."

This means startups get a boost, farmers win with better tech and practices, and the whole industry could see a surge in innovation.

Bottom line? This fund could be the blueprint for future agtech investments, pushing the industry forward faster than ever.