Will network effects squeeze out smaller players in the farm data and analytics space?
By pulling together data from millions of acres, farm analytics startups are building software to provide recommendations on where and when to plant crops.
They can also recommend exactly which crops to plant.
Because these platforms rely on massive volumes of data to develop predictive analytics, their analytic power largely depends on market share. The platform with the most customers feeding data into its system will develop the most powerful analytics, and thus will be able to provide the best recommendations.
Large agricultural suppliers have taken notice of farm analytics startups like Farmers Business Network, which is one of the most well-funded agtech startups with $190M in disclosed equity funding.
Monsanto and DuPont have acquired multiple startups to build their own farm data and analytics platforms.
The space is already somewhat crowded, implying that a shakeout could eventually happen. Once two or three companies gain enough market share, smaller farm data and analytics players could be squeezed out by lack of data, or be outgunned on analytic power.