March 4, 2021

By Lynda Kiernan, Global AgInvesting Media

Just about a month after Winnipeg-based agricultural data management platform Farmers Edge launched a long-term partnership with Google Cloud, the company announced it has completed its IPO on the Toronto Stock Exchange raising C$125 million (about US$100 million) in the process. 

Launched in 2005, Farmers Edge has employed a unique combination of field data, AI, and integration to transform agricultural production resulting in increased yields, efficiency, and sustainability for the long-term, becoming the most comprehensive data management platform on the market, transforming the industry with disruptive technologies and strategic partnerships.

Backed by Fairfax Financial, which prior to the closing of the IPO acquired additional shares in the company, bringing its stake to 61.5 percent, Farmers Edge began trading under the symbol FDGE.

Five investment banks participated in the IPO which sold a total of 7.4 million shares at C$17 (US$13.42) per share, led by Canadian Imperial Bank of Commerce and the National Bank of Canada.

Additionally, the company granted its underwriters an over-allotment option for a period of 30 days following the close of the IPO, which is fully exercised, could earn the company another C$18,750,150 (US$14,797,337).

Farmers Edge remains to be profitable, posting a negative operational cash flow of C$74.9 million (US$59 million) and a negative EBITDA of C$74.2 million (US$58.5 million) in 2019. The company also signaled that it will be posting negative EBITDA somewhere between C$29 million – C$33 million (US$23 – $26 million), and a pro forma negative cash flow of between C$37 million – C$41 million (US$29-$32 million) for 2020.

As such, $80 million (US$63 million) of the proceeds from this transaction will be used by the company to shore up its financial position, another $14.5 million (US$11.4 million) will be allocated toward repaying debt, and a final $20 million (US$15.8 million) will be earmarked to fund working capital requirements. 

But flush with capital and with the ink just dry on a new long-term partnership with Google Cloud, the future is looking bright for Farmers Edge.

Under the terms of the Google agreement, which is part of the Google Cloud Partner Advantage Program, the two companies will launch a global co-sell initiative to provide next-generation tools to the world’s farmers and agribusinesses. Toward this end, Farmers Edge’s digital platform, FarmCommand®, will be enhanced to enable near real-time carbon and sustainability tracking, more streamlined insurance reporting and claims management, and other advanced tools to be used by financial providers and retailers.

Powered by AI and in-field sensors, FarmCommand® transforms collected data into insights, and offers weather forecasting, highly accurate predictive crop modeling, advanced scouting tools, and automatically detects changes in crop health so farmers can monitor their fields for optimized production and output.

“The opportunities to better serve the needs of all stakeholders across the digital agricultural ecosystem with Google Cloud are limitless,” said Wade Barnes, founder and CEO, Farmers Edge in January. “By working together, we can digitize more acres, generate more impactful insights, create more value, and deliver on our commitment to building the most comprehensive, intelligent, and connected platform available.”

Furthermore, this agreement comes only one year after Farmers Edge forged an agreement in February 2020 with American Crop Insurance, an insurance services provider in the U.S. Northeast, that will position the company to disrupt traditional crop insurance models through the creation of a data-driven experiential platform.

Pivoting to expand its market presence into crop insurance, Barnes said in February 2020,  “Insurance is a data-rich and labor-intensive industry. By creating a seamless connection with their growers, American Crop Insurance can tap into real-time data, ensuring they have the highest-quality data sets to support personalized services.”

“This partnership positions the agency as a leader in their industry, embracing the changing technological needs of growers while also streamlining internal processes to foster business growth.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.