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This acquisition represents a significant consolidation of the farming twin digital capacities, hectares under management and geographic records. It also doubles the CropX team and significantly increases the number of farms and total service area with more than 20,000 new farms in over 50 countries.
The deal follows the acquisitions of CropX, which include Regen from New Zealand and CropMetrics from Nebraska.
CropX’s suite of tools helps farmers monitor the movement of water and agrochemicals in the soil to minimize pollution and prevent leaching, runoff and unnecessary resource spending. It’s just beginning what CropX estimates could grow to a global opportunity of $ 5 billion to $ 10 billion per year. The company claims to be the only comprehensive farm management platform with active irrigation technology; self-calibrating humidity; and chemical sensors, soil data, fertilizer management and crop protection functions.
“This industry is still at the beginning of the process of digital and precise transformation,” Tomer Tzach, CEO of CropX, told VentureBeat. “Most farms are still not using data-driven precision farming methods and only a tiny fraction of the market is taking full advantage of them.”
Tzach said he anticipates increasing consolidation in the agriculture industry and a movement in terms of farm-related APIs and data sharing agreements.
Each new acquisition also offers a deeper pool of data that can be drawn on to improve AI algorithms and recommendations in different regions. What works well in Israel, for example, can be very different from what is needed in rainy regions like the Netherlands. Tzach expects significantly more consolidation and data exchange contracts in the near future.
CropX is a leader in what AgFunder calls “Farm Management Software and Sensing Market. “This space was invested $ 879 million last year, compared to a total of $ 30.5 billion invested in the Agtech market. Farm management software and sensing funding businesses in 2020 included XAG ($ 182 million), IXEYE ($ 87 million), DroneDeploy ($ 50 million), and Aclima ($ 40 million).
Meanwhile, agricultural giants have developed farm management offerings that are tailored to their various chemical and genetic portfolios. Monsanto acquired Climate Corp, which integrates satellite data into precision farming tools, and woven that into its KlimafeldView offer.
Monsanto was in turn taken over by Bayer, which had created Xarvio Field Manager. Meanwhile, competitor Syngenta bills its AgriEdge offering as “more than an entire farm management program”. IBM also launched IBM Agriculture, which connects to its IBM Watson AI platform.
Simplify life on the farm
Tzach said the big motivation behind the recent wave of mergers was a desire to simplify the user experience for farmers. A persistent challenge in Agtech is the gap between the strong technological focus of many tech startups on the one hand and the farmers’ desire for comprehensive farm management software solutions on the other.
“Typically, farmers don’t want to juggle 10 different apps, each focusing on one type of farm optimization,” said Tzach.
CropX started with a pure focus on precision irrigation and then upgraded its tools for managing irrigation water on the farm with its own proprietary sensors, data and AI. “We quickly learned from our customers that they would rather use our technology for more than water management, which started our journey into plant nutrition and other areas,” said Tzach.
He thinks it’s easy to underestimate how much customer understanding it takes to drive new technology adoption in a given region. The acquisition also helps leverage the market expertise in each region.
This marks the company’s third major acquisition in the past 18 months and its largest – more than four times the others in terms of acres. The Dacom acquisition added 2.7 million acres in Europe compared to 500,000 acres in the US through the 2019 CropMetrics acquisition and 170,000 acres in New Zealand through the Regen acquisition.
Growth of the digital twin of the ag
Agriculture digital twins combine data across multiple workflows to improve overall decision-making. This new acquisition will help the combined companies flesh out their technology stack. CropX claims this will provide a competitive advantage in combining highly granular soil data with feedback from precision farming practices.
The acquisitions bring different technological capabilities to bear. CropX started with a focus on precision farming and water optimization in Israel. CropMetrics focused on central pivot irrigation techniques and the US Western Corn Belt. Rain focused on wastewater management for the New Zealand dairy industry. Dacom offers tools to improve crop protection in Western Europe and to optimize the use of pesticides and fertilizers.
Each acquisition has also brought better crop pickup and tracking capabilities. These tools help manage a digital paper trail of everything that happens on the farm, from the types of crops grown to tillage and more. The data can also help develop AI models to improve agricultural performance over time or help farmers adapt to climate change.
Tzach said, “These are tremendous benefits in one package for farmers who want to document their regenerative and sustainable practices as they get all of the certification and compliance documents they need to prove they are applying best practices . “
In the near future, the company plans to produce a carbon cycle report that will enable farmers to measure the carbon impact of various management practices and monetize carbon sequestration practices. Idealized mathematical models of these things have been around in agriculture for a long time.
“The difference is that for the first time we can replace physics-based assumptions with scalable data,” says Tzach.
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