Landus, Iowa’s biggest agricultural cooperative, is creating a new tech company it says will provide farmers with services such as bank loans and crop analysis.
The new venture, Conduit, will offer 0% financing to qualified borrowers on all in-season purchases of farm inputs, according to Landus. It also will make financing available in some states for land, input and equipment loans.
The launch of Conduit comes at a difficult time for some digital startups in the $1.5 trillion US agricultural business. While just a few years earlier, some of them were attracting investors and being hailed as disruptors, more recently, fresh funding has been harder to come by.
Landus believes it can succeed where others have failed because it won’t face the same kind of costly barriers to break into the industry.
“We’re literally taking advantage of this cooperative system that is owned by farmers,” Landus Chief Executive Officer Matt Carstens said in an interview Tuesday in Bloomberg’s Chicago office.
Landus already has the backing of Amol Deshpande, the co-founder and ex-CEO of farm-tech startup Farmers Business Network, and a former partner at Kleiner Perkins who led the venture capital firm’s early investment in Beyond Meat Inc. He plans to invest an undisclosed amount in Conduit through his family office, and serve as an adviser to the new company, Deshpande said in an interview.
The co-op approach is also a selling point in connecting the high-tech world of Silicon Valley with one of the oldest, most traditional industries.
“Some growers are extremely comfortable with technology innovation. Others cringe at the thought of something beyond a flip phone,” Carstens said. “Our job is to meet them where they are and help them along the journey.”
Many crop growers also complain about being bombarded with offers to sign up for a wide array of digital services promising to boost their farms’ profitability.
“Yes, there’s fatigue because to a farmer there’s just a plethora of different things,” Deshpande said. “But how many of those things are they owners in and feel a true connection to? This is what co-op structure already has: the buy-in.”
Landus, which has 5,500 farmer members across the US, will have a stake of 50% or more in Conduit. Selected farmer-owners of the co-op will have a chance to invest initially. There are also discussions with potential institutional investors, Carstens said.
— By Kim Chipman (Bloomberg)
