Crop Pro Insurance, a Des Moines, Iowa-based company offering farmers insurance on crops and new technologies, has secured $8 million in Series A funding.
The financing round was led by Finistere Ventures and Seed 2 Growth Ventures and saw them joined by GuideOne Insurance, and Iowa-based insurer specializing in churches.
Crop Pro president Joe Young told Agri Investor that the company is focusing first on the Midwest and that it expects its new insurance products to be approved in time for the spring 2018 growing season. By insuring both tangible assets, like drones and precision agriculture systems, and “soft” technologies such as seed genetics and soil enhancement products, the company hopes to de-risk farmers’ decision-making and accelerate adoption of new technologies.
“Farmers, as a group, are not really early adopters of technology, because they are worried about losing the family farm that’s been in the family for generations,” he said. “When you are fighting for pennies, but these great technology companies are asking them to make investments, it appears out of cycle.”
The $8 million in Series A funding will go largely to hiring additional claims adjusters and supporting investments in data science and product development in order to work toward offering farmers actionable recommendations based on data collected by new technologies, Young said.
Crop Pro also announced Tuesday that it has received US Department of Agriculture approval to become one of just 16 companies offering federal crop insurance. Crop Pro will begin by encouraging farmers to work with the companies that Finistere and S2G have invested in, Young said, although not limited to just those companies.
In July, Finistere announced that it had hired ex-Monsanto executive David Duncan as venture partner in order to increase the firm’s presence in the Midwest, which it described as having a “well-developed ecosystem” across agtech sub-sectors.
In partnering directly with Crop Pro to support adoption of its portfolio companies’ offerings, Finistere and S2G are following the spirit of advice offered recently by Decker Walker, co-leader of agribusiness at Boston Consulting Group and one of the authors of a recent sector overview.
In an Agri Investor interview, Walker recommended that private investors take a “farmer-centric” approach and invest in the marketing and field trials necessary to support widespread adoption of new technologies.
“Wallets are constrained because of farmer income, and the bar for proving to them that your product is not only better, but is better than a less sexy alternative [has gone up],” he said. As an example, he cited the challenge of convincing a farmer to use a genetically modified fertilizer over a more traditional alternative that currently offers a higher return on investment.