Bringing tech efficiencies to the agribusiness market, Silo harvests $3 millionMay 21, 2019
Roughly $165 billion worth of wholesale produce is bought and sold every year in the U.S. And while that number is expected to go up to $1 trillion by 2025, the business of agribusiness remains unaffected by technology advancements that have reshaped almost every other industry.
Now Silo, a company that recently raised $3 million from investors led by Garry Tan and Alexis Ohanian’s Initialized Capital and including Semil Shah from Haystack Ventures, angel investors Kevin Mahaffey and Matt Brezina and The Penny Newman Grain Company, an international grain and feed marketplace, is looking to change that.
Silo’s chief executive, Ashton Braun, spent years working in commodities marketplaces as a coffee trader in Singapore and moved to California after business school. As part of the founding team at Kite with Adam Smith, Braun worked on getting off the ground Kite’s software to automate computer programming, but he’d never let go of creating a tool that could help farmers and buyers better communicate and respond to demand signals, Braun says.
“I was a super young, green, bright-eyed potential entrepreneur,” says Braun. Eventually, Braun took the opportunity to develop the software that had been on his mind for four-and-a-half years.*
He’d seen the technology work in another industry closer to home. Growing up in Boston, Braun had seen how technology was used to update the fishing industry, giving ships a knowledge of potential buyers of their catch while they were still out in ocean waters.
“When you’re moving a product that’s worth tens of thousands of dollars and has a shelf life of a few days there’s literally no room for error and there’s a lot you need to do,” says Braun. It’s a principle that applies not only to seafood but to the hundreds of millions of dollars of produce and meat that comes from farms in places like California. “What we want to do is we want communication and data to live in the right places at the right time.”
Braun says there’s limited data coming in to farmers to let them know what demand for certain produce looks like, so they’re making guesses that have real financial outcomes with very little data.
Silo’s software vets and supports buyers and suppliers to give farmers a window into demand and potential buyers a view into available supply and quality.
“What Silo is building has the potential to make marketing and distribution of agriculture incredibly more efficient, which is a win both for the suppliers and buyers. We’re excited to support and assist this team as they work to move agriculture forward,” said Eric Woersching, general partner at Initialized Capital, in a statement.
Silo is using the new financing to make a hiring push and develop new products and services to support liquidity in its perishable goods marketplace.
While an earlier generation of agribusiness software focused on increasing productivity on farms, a new crop of companies is targeting the business of farming itself. Companies like AgriChain and GrainChain also offer supply chain management software for farming, and WorldCover is creating insurance products for small farmowners in emerging markets.
The penetration of technology through near ubiquitous mobile devices, coupled with sensing technologies and machine learning-enhanced predictive software, is transforming one of the world’s oldest industries.
“I’ve come across quite a few marketplace platforms attempting to serve different segments of the agriculture supply chain, and none of which have come close to impressing me to the degree Silo has in their tech-forward approach to reducing the friction that comes with managing all aspects of the supply chain on their platform. Silo’s deployment of machine learning streamlines the process, requiring little to no change in their users’ workflow, and removes many barriers of their platform reaching critical mass,” said Matthew Nicoletti, commodity trader at The Penny Newman Grain Company.
*An earlier version of this story referenced Kite’s sale to Microsoft . The company remains independent.