Online farmland investing platform AcreTrader announced Friday an oversubscribed $5 million seed round raise led by RZC Investments, and that includes Revel Partners, the company’s founder, and private investments from technology, finance and agricultural leaders.
RZC Investments is the firm of Steuart and Tom Walton, grandsons of Walmart founder Sam Walton.
AcreTrader founder and CEO Carter Malloy said in an interview with WealthManagement.com that the proceeds from the funding raise will go to expand investment offerings, improve investor education about farmland and continue scaling operations to support growing demand on the platform.
“We made a large concerted effort in building out our diligence functionality on the platform and are excited to augment that with internal software and adding some really large datasets and adding staff to what we call the farm team,” he said.
“We are speaking to hundreds of farmers every week and want to be able to further expand that number—only 0.5% to 1% of farms end up making the cut,” Malloy said.
The firm’s analysis, research and selection process depends on a mix of technology and dataset analysis on everything from soil quality, farm yield, irrigation and debt, combined with on-the-ground research by AcreTrader staff—hence the need for expansion.
Part of the increased demand has been driven by farmers themselves who hear about the company or know of neighboring farm owners and farmers that have worked with them and who, in turn, reach out themselves.
“’Would you guys buy it and I can manage it for you,’” is a common refrain we are hearing more often,” Malloy said, referring to farmers who know of neighboring farm owners at a point in their lives when they are willing to sell their land.
“We help young farmers extend their operations and it is important with us that it is a true partnership,” he said of working with farmers and that their ability to efficiently manage an operation for AcreTrader is an equally important part of the due diligence process.
Matt Tarver, partner at RZC Investments, commented in a statement: “AcreTrader’s momentum grabbed our attention, and after reviewing the market opportunity and positive customer feedback, it became clear that the company is poised to modernize land investing.”
“These attractive farm investment opportunities have historically been limited to larger institutional investors, and AcreTrader is breaking down those barriers to democratize the asset class,” he added.