Decisive Farming: Behind The Exit With McRock Capital
On December 19, 2019, Alberta-based Decisive Farming announced it had been acquired by Vancouver-headquartered TELUS. The terms of the deal were not disclosed. CVCA members, McRock Capital, were early investors in the company and the acquisition represents a successful exit for the fund.
According to AgFunderNews, Decisive Farming combines precision agronomics, crop marketing, and information management services to give farmers a single platform from which to operate their business. Decisive Farming describes its platform as offering farmers increased profitability, sustainability, and ease-of-use.
As part of CVCA’s ongoing series looking at transactions in Canadian private capital, we caught up with Scott MacDonald and Whitney Rockley, Co-founders of McRock Capital to speak about the Decisive Farming exit.
When did your firm initially invested in Decisive Farming?
McRock made its first investment in October 2016 and we increased our ownership in a follow-on investment in 2019 just prior to the acquisition.
Why did McRock Capital choose to initially invest in Decisive Farming?
Agriculture is an industry we believe benefits significantly from the digitization of crop data, soil condition monitoring and irrigation using sensors and farm management software solutions which enable trackability from seed to table. Decisive Farming was led by two dynamic brothers who were fourth generation Canadian farmers and understood the need for technology on the farm. The Schmaltz brothers were passionate about helping farmers to be more profitable and able to live their lives, on-farm and off by connecting them to their operations and data anytime and anywhere.
Why did McRock Capital choose to exit the investment in Decisive Farming?
A consolidation of Agtech startups was occurring and the Decisive Farming founders believed 2019 was the right time to integrate with a larger company that could further accelerate its growth. Telus had identified agriculture as a vertical market to acquire and build a connected farm management platform. The fit and timing was perfect for both parties.
How do you think this evolution of Decisive Farming (exit) will enable the company to continue to scale?
Decisive Farming remains proudly Canadian following the TELUS acquisition and is able to reach new customers as well as extended an evolving solution offering to its crop farmers and the 5.1 million acres managed on the Decisive Farming platform.
What do you believe we can expect from Decisive Farming and this sector in the next few years?
Decisive Farming will continue expanding its customer base across Canada. The Agtech sector is in its early days and we expect more exciting startups to emerge given the success of a number of the first cohort such as Blue River Technologies which was acquired by John Deere and Granular which was acquired by Dupont.
What was McRock Capital’s experience with the management team?
Decisive Farming always felt like a family business. The team was knowledgeable and driven but there was something a little more personal than other portfolio companies. At the closing dinner to celebrate the TELUS acquisition, the founders’ father explained why he was so proud of his sons. They took a chance to build something that benefited the farming community in a way that was bigger than the financial reward to themselves or their investors (but that part was nice too).
Do you see opportunities to invest in similar companies in the future?
McRock would like to have at least one investment from our new Fund II in the Agtech sector.