Swiss-Italian company xFarm Technologies, which develops digital tools to help manage agricultural work, today announced a €36m Series C raise. The startup says it’s Europe’s biggest “smart farming” deal to date, and Sifted couldn’t find any other contenders.
Farmers use the xFarm app to manage expenses or help tend to speciality crops like olives and grapes; some also use it to combine data from sensors and satellites to guide high-tech tractors and other machinery around fields.
“We’re positioned to be the only platform farmers need,” according to CEO Matteo Vanotti, who says that xFarm’s services are being used in 450k farms across Europe.
The new round, which follows a €17m Series B in 2022 and a €3m round in 2019, was led by Californian VC firm Partech. London-based Mouro Capital, which will advise xFarm on new fintech and insurance products, also contributed.
Tilling-by-iPhone
Just a few years ago, so-called agritech startups were attracting investors and being hailed as disruptors, but more recently fresh funding has been harder to come by. Peak funding for agritech — and its cousin sector foodtech — in Europe came in 2022, when combined these sectors drew $2.7bn from VCs; in 2024, agri-food investment is tracking almost 80% lower, according to Dealroom figures.
An exception to the investment dry spell are startups developing eco-friendlier or “regenerative” tools — like Denmark’s Agreena, which last year raised €46m to develop ways to monitor the amount of carbon sequestered on farms.
But digitising existing work and processes on farms has been a trickier one to make stick. “Farming’s digital transformation is slower than we expected,” says Vanotti. Advancement has been slow not solely due to reluctant farmers, but also because high-quality internet isn’t always reliable in the European countryside.
But in an industry averse to change, Vanotti says a generational shift, with younger farmers taking over farms, has boosted demand for digital tools.
Loans and insurance
xFarm — which in June Sifted ranked as one of the fastest growing companies in central Europe — grew this year by acquiring two companies, France’s Greenfield Technologies and Spain’s SpaceSense. The mergers brought new expertise — in soil health practices and satellite data respectively — in-house and swelled the company’s headcount to 170.
Mouro Capital’s decision to back xFarm stems from the company’s plan to offer loans and insurance to farmers.
“Farming is a business of intensely high cash flow — there are so many inputs, from seeds to fertiliser and machinery,” says Vanotti. “But without enough data, it’s impossible for banks to understand how risky someone is or not.”
There’s always a crisis or two bearing down on farmers, whether it’s a dire shortage of workers or climate change.
The increasing unpredictability of the weather is creating a property insurance crisis in some parts of the world and insurers have been forced to come up with new offerings.
So-called parametric insurance payouts — of the kind xFarm hopes to develop — are triggered by a predetermined parameter, unlike traditional products that link a claim with actual losses. For example: a farmer and insurer could agree that three inches of rain falling in an hour is the threshold that would lead to payouts.
Vanotti knows well the hardships farmers face: he lost a third of his crops this year on the farm he tends near the Swiss-Italian border.
“Agriculture needs to adapt fast,” he says, explaining how climate change is rapidly altering growing conditions in Europe. Sicily, for example, is where you grow grapes but because of warming temperatures, it’s now becoming known for mangoes and avocados as well.
Brazil, India and Elon Musk
Next, xFarm is eyeing entry into two huge farming countries, Brazil and India. Vanotti believes the latter market, in particular, has big potential, citing the low average age of Indian farmers.
Finally, it didn’t escape our attention that xFarm sounds like a name Elon Musk would give an agricultural project (the billionaire is, for reasons not entirely clear, very taken by the letter “X”).
Is there a price at which Vanotti would sell the company to Musk? “I’m happy to work with all great entrepreneurs,” he says, while confirming that he doesn’t expect to part with the company any time soon.
Read the orginal article: https://sifted.eu/articles/xfarm-startup-raise-news/
