CropX, developer of an agronomic farm management system, has been on an M&A tear in the agtech sector since 2020, and just announced its most recent deal, the acquisition of Adelaide, Australia-based Green Brain, a provider of digital irrigation management solutions.
The Green Brain purchase is the fifth acquisition CropX had made in recent years, after acquiring Nebraska irrigation management firm CropMetrics and New Zealand-based effluent irrigation management company Regen in 2020; Dutch farm intelligence and disease control technology developer Dacom in 2021; and California-based evapotranspiration sensor firm Tule Technologies in late 2022.
These deals have been done with the aim to consolidate a highly-fragmented sector of small agtech firms, and with the intention to build out CropX into a more comprehensive provider of agtech products with rhea into North America, Europe, Australia, New Zealand, and elsewhere.
CropX CEO Tomer Tzach told Fierce Electronics that the fragmentation affecting the sector is both a geographic issue and product segment challenge.
“There are many small ag technology firms that focus exclusively or primarily on their own local region,” he said. “A lot of them emerged as start-ups innovating around issues they saw on their own farms or those of their neighbors. As an agtech startup, this strategy makes a lot of sense at the beginning of the journey: focus on serving one segment and one problem in order to build an excellent solution while you have limited development resources. A company like this typically will have invested in a deep understanding of the regional customer needs and developed relationships and trust among their customers.”
Ultimately, however, maintaining a narrow focus could limit such a start-up’s growth prospects and its ongoing ability to invest in its own technology.
“The problem is, as a company, if you can’t eventually expand out from that initial scope, either in new regions or use cases, you are unable to scale further,” Tzach said. “We see this pattern a lot in agtech. When our acquisitions join CropX, we integrate their innovations into the CropX system and pay special attention to the social capital and relationships that they have with their customers to ensure that we build on it. The approach works very well because we are typically able to broaden and improve the technology solution for the local clientele, build on the existing relationships, and in a lot of cases take the valuable local innovations to a broader global user base at the same time.”
That approach appeals to CropX as a company that is ambitious about growing its product lines and its market reach. “This is where our product strategy and our growth strategy go hand in hand,” Tzach added. “CropX started with IoT soil monitoring devices and data-driven irrigation management, and through this process has expanded rapidly into other areas of precision and sustainable farming solutions including disease management, nutrient management, crop monitoring, weather monitoring, farm record digitization, variable rate, and more.
Bringing all those capabilities under the same umbrella will benefit agriculture sector customers who might otherwise struggle to navigate the fragmented marketplace, Tzach said, adding, “A lot of farmers and agribusinesses have historically struggled with needing to use numerous technology providers in order to meet their digital and precision needs. We are providing customers with a much simpler option via a unified system.
He continued, “Our customers benefit from access to more and better products that emerge from the well-resourced research and development pipeline of a bigger company. Our focus is on breaking down data silos so that the data becomes more meaningful, such as when we combine soil sensing and satellite imagery to track soil and plant health or combine weather data and disease models to better plan and protect crops. Our products keep improving, and what that means for the customer is that the CropX tools become easier to use, more intuitive, more powerful, and a real resource support for farming that helps them boost yield while saving resources [water, chemicals, energy – and time].
Regarding Green Brain, the Australian company has existed for almost 40 years, and has built a reputation for its technical expertise, local market knowledge and strong customer support in areas that are a solid fit with CropX, such as irrigation optimization powered by data from soil sensors, weather stations, and IoT devices. Green Brain’s customer base will now have access to the CropX agronomic farm management system, with an even broader set of capabilities.
The latest acquisition also comes after CropX completed a $30 million Series C financing round in early 2023.