The Big Data bounty: U.S. startups challenge agribusiness giants

Chris Gould's combine cab is loaded like the cockpit of a fighter jet he used to fly as he harvests soybeans in northern Illinois, steered by satellites, four video screens glowing with up to minute updates about his crop and the work's progress.

The setup, light years from what it was when the former Navy pilot started farming nine years ago, includes technology from Monsanto and Deere & Co.. But alongside them is an iPad running an app by tiny startup 640 Labs, boasting every bit as much savvy as the Goliaths' latest offerings.

He is gathering inch-by-inch yield data through sensor-packed and GPS-guided equipment, aiming to pinpoint the good soil on his roughly 3,000 acre (1,214 hectare)farm, where he may plant more densely next season, and the bad, where he may plant less or fertilize more.

"The goal ultimately is to customize every input to every field and zone within the field, and to have enough data and analysis tools and models to make the best farming decisions possible," Gould said.

Big agriculture companies, such as Monsanto, Deere and DuPont Pioneer, have spent hundreds of millions of dollars on technologies that use detailed data on soil type, seed variety, and weather to help farmers grow more at a lower cost. But as the race for dominance on the farm heats up, a number of small tech startups are launching competing products.

They are powered by many of the same data sources such as freely available rainfall totals from the National Weather Service and field boundaries gleaned from Google Maps. They also tap data gathered by farm machines and transferred via flash drive or beamed wirelessly to the cloud.

Agriculture is the latest industry hoping to capitalize on Big Data, or using new technologies to gather and analyze large, complex, previously unwieldy data sets to anticipate behavior and results and boost efficiency.

All hope their tools can help even the most productive farms squeeze out more grain, another 15 percent by some estimates, by telling farmers what to plant where and how densely or by informing them where to drive tractors to limit yield-sapping soil compression.

Gould does not know yet which company's product he will ultimately choose.

FREE FOR NOW

Several companies are offering basic packages for little to no cost with an eye on eventually signing farmers up for premium services such as planting prescriptions or grain marketing advice.

Climate Corporation, bought by Monsanto last year for around $1 billion, is an early leader in the young market. Its free Climate Basic product used on more than 50 million acres (20.2 million hectares), or about 15 percent of total U.S. farmland. Around 1 million acres are under its premium service Climate Pro, free this year and $3 an acre next year.

Among startups, Michigan-based FarmLogs has enrollments for its software product, also a free service, at around 15 percent of U.S. farms, triple what they had in January. The company, which raised $5 million in two funding rounds, declined to provide total acreage enrolled.

640 Labs, which raised nearly $3 million in its latest funding, said its subscriber base has increased four-fold since the spring but declined to disclose acreage under management.

Most companies are focused on launching products in the United States, the world's largest grain producer and exporter, where detailed data on soils and weather is readily available. But they see growth opportunities in modern farming regions like South America, Australia and Europe.

The industry is expected to grow fast. Monsanto called the Climate Corp acquisition its ticket to a $20 billion market. DuPont Pioneer forecast its farm data products would add $500 million to annual sales over the next decade.

That growth potential and the low cost of scaling up software-as-a-service business have attracted venture capitalists like Mark Kvamme, co-founder of Drive Capital and an early investor in FarmLogs. The former Sequoia Capital partner called the startup a "disruptor," much like Google was when his former company invested in the then No. 13 search engine.

"Everyone's got a computer in their pocket and connectivity to the net. You can now create software as a service, like FarmLogs has done on Amazon web services, and provide these services across the United States and across the world very efficiently," Kvamme said.

But the investments in an increasingly crowded field of farm data services are not without risk. Although providers say farmers can save money on inputs like fertilizer, it remains unclear how many growers will sign up for premium services with crop prices at the lowest in more than four years.

While getting their products into farmers' hands has been a challenge for start-ups that lack the reach and marketing budgets of their bigger rivals, their independence from big companies with their branded products can be a selling point.

"We've very explicitly avoided partnerships with any agricultural brands that could sway us one direction or another. I don't think that's appropriate," said FarmLogs co-founder and CEO Jesse Vollmar.

The ability of small firms to respond quickly to customers' requests and update products also gives them an edge.

Climate Corp uses farmer feedback for product development, but the process can take up to a year or more, according to spokeswoman Christy Toedebusch. DuPont Pioneer is also open to feedback, but runs pilot trials before commercializing products, spokeswoman Jane Slusark said.

In contrast, when Illinois farmer Steve Pitstick challenged 640 Labs to address production-sapping soil compaction caused by grain carts during harvest, 640 developed a method to map the cart's weight and its path through the field, helping Pitstick to minimize the damage.

"Our weapon is we can turn on a dime," said 640 Labs co-founder and chief technology officer Craig Rupp. "We're very nimble."