FarmRaise aims to become a financial services giant, starting with farm grants

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It’s necessary to start someplace. They formed a friendship as Stanford MBA students over their shared opinion that assisting U.S. farms in the running more effectively would be beneficial to the nation and profitable for their respective companies. They decided to start with grants to test their hypothesis.

As a cattle rancher in Virginia, her background taught her that asking for grants — even to enhance the sustainable agricultural techniques of her family’s farm — could be a complex and time-consuming procedure, which she learned personally. Tellatin, on the other hand, studied biological engineering as an undergraduate and worked for the USDA for three years, researching agricultural economics. She was also aware that if additional funds were made available to farmers, they would be more likely to make better decisions.

Enter FarmRaise, a two-year-old, 12-person company based in San Diego, California, has made significant strides since the two co-founders joined forces with another co-founder, Albert Abedi, whom they met through the accelerator program Pear VC, a Palo Alto-based firm. FarmRaise has grown to a staff of 12 people and is now valued at $10 million.

Thanks to word of mouth and a dash of search engine magic, the company has already signed up nearly 10,000 farms on the platform. It has also formed partnerships with agriculture giants such as Cargill and Corteva (which was spun out of DuPont in 2018), which have carbon emission reduction targets to meet and have begun directing farmers to FarmRaise for assistance with grants tied to low-carbon farming practices, according to Hafner.

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Furthermore, FarmRaise’s platform – which asks for detailed information about farms and then organizes that information to allow the company to apply for a wide range of grant programs on its customers’ behalf – has gained enough traction that investors are now interested in participating in the company. Susa Ventures led a $7.2 million round of early fundraising for the project, which was just announced.

Nonetheless, as with so many startups, Hafner believes that government and private subsidies are just the beginning of what FarmRaise hopes to become an extensive financial services firm. Consider the possibility, says Hafner, that after a farm has supplied most of its data to the firm, FarmRaise may assist it in obtaining land loans, obtaining equipment at wholesale costs, and helping the farm with its tax planning.

She claims that other companies will offer many of these services, with FarmRaise receiving finders’ fees on their behalf. FarmRaise isn’t trying to reinvent the wheel with its business model. However, she points out that there is no reason why farmers should not have access to a “full-stack” of resources at their disposal. Apart from that, other services may keep clients content while they wait to find out whether or not they have been awarded a grant; some of these services have wait periods ranging from six to twelve months.

Grants, according to Hafner, are “our wedge.” “They are not the climax of the narrative.”

While this is happening, FarmRaise is concentrating on recruiting more people, securing more funds, and ensuring that its clients are satisfied with the services it presently offers. It charges a monthly membership fee plus 10% of the value of the grants it obtains.

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It’s critical to do it correctly the first time. Grants, according to Hafner, provide significant potential, particularly since USDA funding has “been expanding like crazy,” she adds.

Specifically, she cites the Trump administration, which has provided “hundreds of billions of dollars” in subsidies to farmers whose supply-chain disruptions caused by Covid has hampered.

The Biden administration also heartens FarmRaise, she continues, noting that “we’re seeing this great emphasis on raising the amount of the pie for conservation spending, and it’s expected to double in the years to ahead” under his leadership. She asserts that it is only logical to do so. Besides increasing farm profitability, [sustainable farming] also sequesters carbon and can contribute to climate change mitigation efforts. There are just numerous, many, numerous advantages that come with it.”

Participants in the company’s seed round include Cendana Capital, Ulu Ventures, Pear, Better Tomorrow Ventures, Incite Ventures, Financial Ventures Studio, and other angel investors.

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