• Sun. Nov 27th, 2022

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

ByASNF

Jan 22, 2022

You have to begin somewhere. So when Jayce Hafner and Sami Tellatin bonded as Stanford MBA classmates over their shared belief that helping U.S. farms run more efficiently would be good for farmers, good for the country, and a great business, they decided to start with grants.

For her part, Hafner grew up on a cattle ranch in Virginia and knew firsthand that applying for grants — even to improve the sustainable farming practices of her family’s farm — was a confusing and time-intensive process. As for Tellatin, she studied biological engineering as an undergrad and spent three years with the USDA, researching the impacts of cover crops on ecosystems and farm economics. She knew, too, that farmers might make better choices if grants were more available to them.

Enter FarmRaise, a now 12-person, two-year-old, San Diego, Ca.-based company that has made considerable progress since the two joined forces with another cofounder, Albert Abedi, who they met through the accelerator program of Pear VC, the Palo Alto-based firm.

According to Hafner, the company already has nearly 10,000 farms on the platform thanks to word of mouth, a dash of search-engine magic, and, importantly, partnerships it has struck with agriculture giants like Cargill and Corteva (spun out of DuPont in 2018) that have carbon emission reduction goals to meet and have begun directing farmers to FarmRaise for help with grants tied to low-carbon farming.

FarmRaise’s platform — which asks for granular farm insights, then structures the data in a way that allows FarmRaise to quickly apply for a wide variety of grant programs on its customers’ behalf – also has enough momentum that investors are now in the mix. (The team just landed $7.2 million in seed funding led by Susa Ventures, which was joined by Cendana Capital, Ulu Ventures, Pear, Better Tomorrow Ventures, Incite Ventures, and Financial Ventures Studio, among others.)

Still, as with so many startups, Hafner says grants — both federal and private — are just the starting point for the very broad financial services company that FarmRaise intends to become. Imagine, suggests Hafner, that once a farm has provided much of its data to the company, that FarmRaise can help it secure loans, secure equipment at bulk prices, lower its operating expenses, and help with both the farm’s banking and tax planning.

Many of these services will be provided through third parties, she says, with FarmRaise collecting finders’ fees. FarmRaise isn’t looking to reinvent the wheel. But there’s also no reason that farmers shouldn’t have a “full-stack” resource to which to turn, she adds.

Grants are “our wedge,” she says. “They are not the end of the story.”

In the meantime, FarmRaise is focused on hiring more employees, lining up more grants, and making sure its customers are happy with the services it’s already providing and for which it charges a monthly subscription, along with 10% of the value of the grants it secures.

It’ll will take some time to understand FarmRaise’s success rate, given that some grants have wait times of six to 12 months. But it’s a big opportunity unto itself, suggests Hafner, including because USDA funding has “been growing like crazy,” she says.

She points to the Trump administration, which distributed “tens of billions of dollars” in funding to support farmers who struggled with Covid-related supply-chain disruptions.

The Biden administration also has FarmRaise feeling encouraged, she adds, “We’re seeing this keen focus on growing the size of the pie for conservation funding and it likely doubling in the years to come.” It only makes sense, she suggests. “Not only does [sustainable farming] increase farm profitability but it also sequesters carbon and can help to address climate change. They are just many, many, many benefits that come with it.”

Above, pictured left to right: FarmRaise cofounders Jayce Hafner (CEO), Albert Abedi (who is the company’s head of product), and COO Sami Tellatin.

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