Gro Intelligence—a New York- and Nairobi-based startup behind what it claims is the world’s largest agricultural data platform—laid off 10% of its staff, about 20 people, at the end of January, AgFunderNews has learned.
Founded in 2012 by former agricultural commodities trader Sara Menker, Gro Intelligence is an AI-powered insights company providing decision-making tools and analytics to a range of clients from food & ag companies to governments, insurers, investment banks, consulting firms and universities. It netted an $85 million series B round in January 2021 from backers including Intel Capital and Africa Internet Ventures, and was named as one of TIME’s 100 most influential companies that year.
The company has not responded to requests for comment, but one staff member impacted by the cuts told us: “We had 10% reductions [characterized as] ‘workforce adjustments’ required by the board of directors. The CEO got all [of the] company [together] in a less than five-minute call and the affected ones were disconnected less than an hour and a half afterwards.”
Another added: “We were told that the board wanted to cut costs by 10%. The cuts were across the board with more of an emphasis on engineering.”
‘They have a great product; I’m not sure they know how to sell it’
Layoffs and cutbacks are not unusual in the current venture capital downturn. A range of companies, from those with great prospects and even with great revenue numbers to those very early stage, are struggling to raise funding to take them to the next stage and ultimately to profitability.
According to one industry source, who noted that the company does not list a CFO or a head of sales on its leadership team on its website, Gro “has a great product and a good group of intelligent people behind it, but I’m not sure they know how to sell it… I think it’s a solid business and something that the market needs, but it also needs the right people to operate it. Like most startups, it tries to be everything to everyone and needs to find its niche.”
He added: “They started off as a data aggregator of agricultural data and have now incorporated a ton of climate data. The problem is that they are not sure who or what to sell, they have the answer but they do not know which question to ask.
“I haven’t heard that they lost clients; it seems to be more the case that they have not been able to attract as many as hoped. And all those organizations [food & ag companies, financial institutions, gov’t organizations, universities] are clients they target, which goes back to them trying to be everything to everyone. It seems they need to bring in an operator to take the company to the next level.”
Gro has been trying to raise additional capital through a convertible bond [a bond that can be converted into shares at a later date] as a bridge until it gets more consistent and stable revenues, he claimed.
‘I didn’t see it coming’
One former employee added: “I can [only] speak for myself that I didn’t see it coming. At the beginning of the year, we had an all teams meeting and nothing was said. Curiously, there was a talk about good prospects of investment from the public sector.”
Asked about a comment on recruitment site Glassdoor describing Gro Intelligence CEO Sara Menker as “charismatic and brilliant” but “not leading the business internally on a path to be profitable,” he said: “As in any business, we have a lot of friction [but] the people out of senior management are brilliant and great to be around.”
One industry source told us: “Climate tech is an evolving landscape, especially in climate adaptation. COP28 and WEF Davos 24 signaled that adaptation is increasingly seen as a business agenda rather than a government agenda. The outcome of that will be seen in the overall growth of the sector. However, companies that focus on specific business painpoints and go deep to solve them through their products will end up doing well.
“The challenges in fundraising/growth that the sector saw last year are no different from the challenges in the broader tech sector on the growth side.”
The world’s largest climate data platform?
Gro Intelligence, which Menker recently claimed had “ended up building the world’s largest climate data platform without even knowing it,” scrapes data from governments, trade organizations, weather and geological agencies, commodities and financial markets to provide actionable insights.
To predict crop yields, for example, Gro combines satellite imagery with data on rainfall, drought, vegetative health and density, soil moisture and land surface temperature, and data from USDA’s National Agricultural Statistics Service (NASS), or Brazil’s IBGE, the Brazilian Institute of Geography and Statistics, for example.
CEO Sara Menker did not respond to an email asking about the company’s recent performance, but in a blog post penned on January 25, 2024, Gro said its US corn yield forecast model had been “on average within 98% of the USDA final January report by October [i.e., three months in advance]” over the past eight years, while its US soybean yield forecast model had been “on average within 99% of the USDA’s final number by October for the last six years.”
It added: “For the two major soybean exporting countries, the US and Brazil, Gro’s predictive yield models were 99.6% and 98.1% accurate for 2023, respectively.
“In critical global regions where the current marketplace does not have many machine learning-based predictive models such as Ukraine, Brazil, and China, Gro’s 2023 global yield forecast models were on average 96% accurate up to 10 months ahead of final government reporting.”
Explaining why this matters, the company explained: “Yield is the most important supply-side driver of the price of a commodity, and yield forecasts drive changes in the futures price. Governments and agribusinesses rely on such models to help manage foreseeable imbalances between food supply and demand. Financial traders buy or sell financial assets based on their expectations of changes in crop futures prices, and yield models are a significant input to their own predictive financial models.”
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Author Elaine Watson
