This year’s CNBC Disruptor 50 was topped by an AI unicorn in the field of AgTech called Indigo Ag. With the use of artificial intelligence, it enables better forecasting and transparency and aims to make farming less of a commodity business and more reliably profitable.
Indigo Ag’s Journey
Boston-based Indigo Ag was founded in 2014 as Symbiota by Noubar Afeyan and Geoffrey von Maltzahn. In January 2015, David Perry, a veteran CEO from the pharmaceutical industry, was brought in to lead the company. In February 2016, it was rebranded as Indigo Agriculture. It started out as a microbiology firm that used seed treatments and technology to improve sustainability, profits for farmers, and consumer health.
In 2018, it introduced a digital platform called Indigo Marketplace for farmers and buyers to connect with each other. It allows buyers to bid ahead of a harvest for ingredients grown as per their specifications. Indigo also facilitates grain-quality testing, transportation, and payments between growers and buyers.
Indigo follows a ‘cashless’ farming’ approach in which it enters into contracts with farmers, providing them with its microbial coated seeds at the beginning of the season and then purchasing their harvest for a guaranteed, premium price.
In these times of unpredictive climate and food prices, Indigo’s business model is seen as innovative in getting their product into the hands of farmers, a segment that is cash poor globally.
Indigo Ag’s Financials
Indigo Ag has over 5,000 food producers growing food on 1 million acres. It expects to 25,000 growers using its technology to produce food on 4 million acres by the end of this year. It expects to surpass annual revenue of $1 billion in 2019. It now operates outside the US, in Argentina, Brazil, and Australia. It also has a joint venture with Mahyco Grow in India.
Indigo Ag has raised about $650 million in venture funding from investors including Flagship Pioneering, Activant Capital, Ballie Gifford, the Investment Corp. of Dubai, Alaska Permanent Fund, SchindlerAM Ventures, and LIAN Group. In its September last year, it raised $250 million at a valuation of $3.5 billion.
Indigo Ag’s Acquisitions
In December 2018, Indigo Ag acquired TellusLabs, a satellite imaging company. With the help of this acquisition, Indigo Ag is developing a living map of the world’s food system. With this map, it expects to bring transparency to the global supply chain while supporting grower profitability, environmental sustainability, and consumer health. By feeding data from Indigo’s million-acre global grower network into TellusLabs’ algorithms, Indigo plans to tune its new agronomic intelligence apparatus down to individual fields.
Terms of the deal were not disclosed. Founded in 2016, TellusLabs had an estimated revenue of $1 million and had raised $3.2 million in funding from IA Ventures, Founder Collective, Hyperplane Venture Capital, Project 11 Ventures, Ryan Teksten, and MassChallenge.
M&A and venture investing have been on the rise in recent years in the agricultural sector. Some of the largest players in the sector include Nutrien, Mosaic, BASF, Sygenta (now part of Chinese giant ChemChina), DowDuPont’s agricultural division Corteva, and Bayer, which acquired Monsanto.
With most of the legacy agricultural biggies investing in developing digital agricultural platforms organically and inorganically, the competition is cut out for Indigo Ag. Indigo Ag is looking at locking users in its own product ecosystem a la Apple, Amazon, and Google that is too convenient and powerful not to use. It would be interesting to watch how successful it is going to be in shaping the future of agricultural science.