Bushel’s $26m round blends strategic, tech and ag-focused capital

Chief executive Jake Joraanstad says Bushel does not want to be a 'software company that’s owned by an ag company' and is plotting a path to becoming an independent software player.

Agricultural software provider Bushel raised $26 million in an investment round backed by existing investors and led by a newcomer: Chicago-headquartered technology and financial services firm The Banc Funds Company.

Other investors in North Dakota-headquartered Bushel’s late August round included North Dakota Growth Fund-backed 50 South Capital, Lewis & Clark AgriFood, Conti Ventures, Cargill and others.

Chief executive Jake Joraanstad told Agri Investor Bushel initially planned to raise its Series C last year but quickly decided to delay the effort due to the state of the market at the time. A revival in sentiment since, he said, has contributed to an effort that surpassed an initial target of $20 million.

Bushel was established as a software company in 2011 and began to focus on agriculture in 2017. Its offerings include desktop and mobile software that digitizes tasks including permissions, transactions and payments. Capital from the Series C will be devoted to further developing products that include a farm management software offering and Bushel Wallet, which aims to eliminate paper checks still common in the sector.

“In agriculture you need to win both the small and medium-sized front as well as the majors in order to be a real industry giant in this space,” said Joraanstad. “Our job is to not become just a software company that’s owned by an ag company, that’s not what we are trying to do. We want to be an independent ag software company ourselves.”

Whereas many ag focused software companies employed business models focused on securing revenue through farmers’ subscriptions, he explained, Bushel has instead derived the majority of revenue from grain retailers, dealers and traders.

“Our model is to go to the supply chain and build capabilities for them, which they can then afford to pay for and give to the farmer or some other parties in the process. The key difference for Bushel in building [itself] as a real business is not just relying on farmer-based revenue but really relying on creating efficiencies and real value with the software,” he said.

Joraanstad explained that, while ag-focused venture capital firms have always been a natural focus for Bushel in its fundraising efforts, interest among strategic investors like ADM and The Andersons, which were both also investors in the round, has increased since 2021. He added that strategic investors thus far have all participated through minority investments not including board seats.

“At this point in the game, there’s not a lot more physical changes they can invest in that are really going to make their companies that much more effective, so they are looking to technology to create the next level of efficiency and margin that they need,” said Joraanstad. “That’s true no matter if the market is up or down.”

Interest in the agtech market has grown significantly since the early years after Bushel’s entry into sector, he added, when visits to Silicon Valley and New York elicited little interest.

“People weren’t even interested in taking a meeting with someone in agriculture, or technology in agriculture,” he said. “Today, those same firms are now calling us and asking our view on the strategy and what’s happening in ag and where is the right place. There’s a lot of interest now in agtech that was not as cool back in 2017.”