March 9, 2020

By Lynda Kiernan

Medici Ventures, the blockchain accelerator and investment platform of Overstock.com, has led an $8.2 million funding round, committing $5 million for GrainChain, a provider of an innovative and IoT-based blockchain suite of products. Medici Ventures was joined in this round by Eden Block and others, bringing total funding to-date for GrainChain to $10.7 million. 

Founded in 2013, GrainChain is an end-to-end, harvest-to-table system comprised of software products that eliminate manual processes of weighing and documenting agricultural output through the use of Internet of Things (IoT) devices that accurately measure weight and quality. The company’s mobile apps give farmers the ability to see their inventory in real time, provides measurements such as quantity, quality, and humidity, and enables them to enact immediate contract settlement.

Additionally, the blockchain-based platform’s financial settlement system allows farmers, buyers, and sellers to create smart contracts through which to secure funds through transaction processes, eliminating both the potential for error through human error, and the potential for fraud through the actions of bad participants.

“GrainChain has quietly become one of the most successful blockchain-meets-agriculture platforms on the market by allowing more and more farmers to receive fair value and prompt payment for their crops, while also selling to a larger pool of buyers,” said Johnathan Johnson, CEO of Overstock and president of Medici Ventures.

This is a return investment for Medici Ventures, which made an equity investment of $2.5 million in the company in December 2018. 

The Promise in Precision

The application of blockchain technology to the grain and commodities supply chains have been the focus of more than one investment round or strategic partnership of late. After years of bumper crops and significantly lower commodity prices have caused farmers’ margins to disappear, the promise that digital ag platforms can provide farmers with higher returns per acre and improve margins for handlers is attractive.

Two announcements were made in Q4 2018 within days of each other, when in the last days of October, ADM, Bunge, Cargill, and Louis Dreyfus, the four global behemoth agribusinesses known as the A-B-C-D’s, announced they were partnering to pursue ways to use technology to digitize and standardize the global agricultural commodity value chain.

Understanding that the integration of technologies such as AI and blockchain will provide opportunities to increase transparency and efficiency for customers while also reducing resource and time-intensive processes for suppliers, the companies stated they were also seeking broad-based industry participation in support of global access and adoption.

The following week, ADM and Cargill announced the launch of Grainbridge, a joint venture technology platform providing grain market decision support and e-commerce and account management software for farmers in North America. 

However, one of the more high-profile platforms to be launched is from Indigo Ag, which in January of this year announced it had raised another $200 million to support, in part, Indigo Grain Marketplace. 

Launched in September 2018, Indigo Grain Marketplace is a digital platform designed to connect farmers directly to buyers, allowing them to transact for commodity crops at no cost. Buyers also are able to source grain with specific factors in mind, such as protein content, variety, milling quality, organic, non-GMO, or rain-fed, and in turn, farmers will be able to price their grain based on its identifying factors of their crop and how it was produced. Furthermore, Indigo facilitates grain quality testing, transportation, and payment through the platform.

Since its launch, $300 million worth of bids have been placed through the Marketplace, and during the second half of 2019, the platform saw month-over-month transaction growth of between 50 and 100 percent.

And most recently, only weeks ago, Sydney-based Cornerstone Growth Capital invested A$6 million (US$4 million) in AgriChain, the largest supply chain software company in Australia. 

However, despite its name, GrainChain does not only cater to the grain industry. In September 2019 the company signed agreements with stakeholders along the Honduran coffee supply chain for stakeholders to use the GrainChain platform to reduce risk, improve conditions, and encourage reinvestment in the industry.  

“Growing coffee is such a widespread process with so many variables that it has traditionally been impossible to get people on the same page, which lowers trust across the entire supply chain,” said Francisco Fortin, general manager of Confianza SA-FGR, a major insurance provider to the agriculture industry. “With GrainChain’s blockchain platform, we can assure that all parties are able to participate in the product with much greater visibility and minimized risk through every step.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.