Online farmland investment platform AcreTrader will seek to scale its business following a $12 million Series A funding round led by Jump Capital, after it recorded an almost five-fold increase in investments in Q1 2021 in comparison to the same period last year.
AcreTrader invested $2.37 million on behalf of investors in Q1 2020 and the company has invested $13.65 million to date in Q1 2021, it confirmed to Agri Investor.
The start-up was launched in 2018 and uses a buy-and-lease strategy which involves farmland being placed into a limited liability company, with investors then purchasing shares in the LLC while AcreTrader handles all of the asset management. The platform currently lists “about a farm a week” on its website, founder and CEO Carter Malloy told Agri Investor, with these ranging in value from between $1 million to $5 million. The platform is only open to accredited investors.
Malloy said he was inspired to launch the business because existing access to farmland investments was “a non-starter for just about everybody.”
“If you want to invest in farmland you really need to go out to a county you’ve probably never been before to meet with a broker you’ve never met before, put down a million dollars and then, congratulations, you get to manage a farm.
“We fill a niche where the investors maybe don’t want to invest a million dollars, which is typically the minimum for a fund. Maybe they want to put in just $50,000 and so we fill up that gap in the market,” said Malloy. The company pursues farmland growing both permanent and row crops, exclusively across the US.
Investors using the platform range from family offices, high-net-worth individuals as well as some institutions, said Malloy. He declined to offer further details of the types of institutions using AcreTrader but did say that some entities have made investments worth more than $1 million dollars using the platform.
“The other thing I would say is, beyond what you see on the acre trader website, we work with a lot of investment funds and a lot of institutions… on a lot of larger transactions than what you see on our website. We certainly work with a lot of the larger names in the industry. We own a brokerage and we have real exposure to larger assets,” explained Malloy.
He confirmed that the company has worked on assets with values in the double-digit million dollars range and has looked at some worth hundreds of millions.
“We’re not actually today working on any anything in the hundreds of millions. We have looked at a number of deals and we do expect to be active across the spectrum of size,” said Malloy.
Narya Capital, Revolution’s Rise of the Rest Seed Fund, and existing investors RZC Investments and Revel Partners also participated in the $12 million Series A. The funds will be put towards improved online tools, data science, marketing, and expansion of AcreTrader’s team of agriculture, finance and technology executives.
Peter Johnson, partner at Jump Capital and Kenny Traynom, former COO of Westchester Group and a founding board member of Leading Harvest, have also joined AcreTrader’s board of directors.