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When it was nearing 6 p.m. a week ago, I found it hard to take my eyes off the sky—the vivid pink remains of a sun that had only recently sunk behind the mountains that sit west of Fayetteville, Arkansas.
I’m on the sixth floor of what I wouldn’t call a skyrise. That being said, it’s one of the tallest buildings in the area, and the view over this city—population 93,949 by its last count—is direct.
I’m sitting with Carter Malloy, founder and CEO of AcreTrader, an online investing and fintech platform where accredited investors can scoop up land for their portfolios—predominantly farmland. It’s an alternative investment that likely isn’t what first comes to mind for an investor, but it’s considered by many to be an inflation hedge and to steer clear of the equity sector’s wild bouts of volatility.
Malloy moved to Arkansas from San Francisco in 2018, as he tells me, “to build a tech company in the middle of nowhere.”
The fintech—or agtech, or proptech, or what have you—now hosts approximately 2,000 investors and has managed the sale of more than 80 parcels of farmland. When a piece of land goes up for sale on its site, it’s typically sold in a matter of days. Investors buy the land; then farmers rent it out, using it to grow their crops.
The company just closed $40 million in Series B funding, led by London-based Anthemis Group, and joined by all of its pre-existing institutional investors, which include Jump Capital and RZC Investments, the Bentonville, Arkansas-based investment firm of Steuart and Tom Walton (Walmart founder Sam Walton’s grandchildren). The new funding comes less than a year after AcreTrader’s Series A round in March. The company declined to disclose its valuation.
The company is growing fast: it’s headcount now tallies about 70 employees on staff—up from some 15 about a year ago, many of whom have moved from elsewhere in the U.S.—Dallas, Seattle, Boulder, New York, and elsewhere—for the job. A small team on the fifth floor at AcreTrader is building out a product it calls AcreMaps, a geospatial analytics database for farmland that helps landowners discover, analyze and evaluate a parcel, based on history, pricing, and property features, such as how the water drains, or why certain areas may not be growing crops as effectively.
“Can you imagine going to sell your house and having no sense of what your neighbors sold their houses for… And to not not even know if there was a sink in the house?” Malloy says. “There’s very little transparency, there’s very limited liquidity, and there’s very limited access.”
Venture capitalists are increasingly looking beyond Silicon Valley, New York, and even the U.S. as they hunt for investment opportunities—the number of which can’t seem to match the stride of the dollars available to deploy. The pandemic, in particular, has brought fresh attention to areas of the market—and regions of the U.S.—that are operating out of line of direct sight to the average urbanite: The trucking industry (with dedicated VC funds and more than 60 startups), supply chains (attracting $4.1 billion worth of North America and European funding in the fourth quarter of 2020), and farming (annual agtech deal value was up more than 20% in the third quarter of 2021 from the calendar year prior), to name a few.
The region of Northwest Arkansas, to which it is so commonly referred, may feel in the middle of nowhere, but it’s not for AcreTrader. It’s centrally located a three to five hour drive to farmland in the Mississippi Delta and the same distance to valuable acreage in the Midwest. It’s also close to home for Malloy and co-founder and COO Garrott McClintock, who both come from farming families. McClintock is the fifth generation of his family’s Tunica, Mississippi farm, where they grow cotton, corn, soybeans, wheat, and rice.
“Place matters,” says Anna Mason, co-managing partner of Revolution’s seed fund, Rise of the Rest, which joined both AcreTrader’s Series A and Series B rounds and has also invested in Ox, an order fulfillment startup in Bentonville. AcreTrader is “building in the backyard of its customer base and a legacy industry that it knows so well.”
AcreTrader is trying to get a foothold in financial services, a highly-regulated sector, and it faces a host of other challenges—some of which stem precisely from its location. The tech talent pool, for instance, is small in Northwest Arkansas. There’s often an acquisition cost to move employees into the area (somewhere around $5,000 a person, Malloy estimates). Capital is quickly spreading out of bigger hubs, but it’s certainly not as readily available.
But they’re closer to the land, rent is cheaper, and my hour-long parking spot, steps away from the front door to AcreTrader’s downtown office, only cost two quarters. And Malloy says the sunsets are often this beautiful. Sometimes the team will gather around this conference room, crack open a few locally-brewed beers from the mini fridge, and enjoy the view. That love of land—of a place—is what Malloy calls a “terrible addiction.”
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
VENTURE DEALS
– GoStudent, a Vienna, Austria-based video online tutoring company, raised €300 million ($339.7 million) in Series D funding led by Prosus and was joined by investors including Deutsche Telekom, SoftBank, Tencent, Dragoneer, Left Lane Capital, and Coatue.
– Brex, a San Francisco-based corporate credit card fintech company, raised $300 million in Series D funding led by Greenoaks Capital and Technology Crossover Ventures.
– Project44, a Chicago-based supply chain logistics developer, raised $240 million in funding led by TPG, Thoma Bravo, and Goldman Sachs Asset Management.
– DNA Script, a Le Kremlin-Bicêtre, France-based Enzymatic DNA Synthesis (EDS) for on-demand DNA printing company, raised $200 million in Series C funding from investors including T. Rowe Price Associates, Baillie Gifford, Healthcor Management, eureKARE, and Irving Investors.
– Tul, a Bogotá, Colombia-based e-commerce platform and mobile app that connects locally-run hardware stores with access to small businesses, raised $181 million in Series B funding led by 8VC and was joined by Avenir.
– ODDITY, parent company of New York-based direct-to-consumer beauty brand operator Il Makiage, raised $130 million in funding from investors including Thomas Tull, Franklin Templeton, Fidelity Management & Research Company, and First Light Capital Group.
– Foxtrot, a Chicago-based retail platform operator and delivery company, raised $100 million in Series C funding led by D1 Capital Partners and was joined by Monogram, Imaginary, Almanac, Wittington, Fifth Wall, Beliade, Lerer Hippeau, and Revolution.
– Novo, a New York-based small business banking platform, raised $90 million in Series B funding led by Stripes and was joined by investors including Valar Ventures, Crosslink Capital, Rainfall Ventures, and BoxGroup.
– Chapter, a New York-based medicare advisory services company, raised $42 million in Series B funding led by Addition and was joined by investors including Narya Capital, Susa Ventures, Maverick Ventures, XYZ Venture Capital, Core Innovation Capital, and Health2047 Capital Partners.
– Alasco, a Munich, Germany-based financial management platform for real estate projects, raised $40 million in Series B funding led by Insight Partners and was joined by Lightrock.
– Career Karma, a San Francisco-based career-advancing information platform for software engineers, raised $40 million in Series B funding led by Top Tier Capital Partners.
– DeepScribe, a San Francisco- AI-powered automated medical documentation platform, raised $30 million in funding led by Index Ventures and was joined by investors including Bee Partners, Stage 2 Capital, 1984 Ventures, Scale.ai CEO Alex Wang, and Figma CEO Dylan Field.
– Quris, a Tel Aviv, Israel AI-powered drug development company, raised an additional $19 million in seed funding led by Welltech Ventures and was joined by investors including iAngels and GlenRock Capital.
– Bluon, an Irvine, Calif.-based support app for HVAC technicians, raised $27.6 million inSeries B funding led by Ecosystem Integrity Fund and was joined by MacKinnon and Bennett & Company, Ferguson Ventures, and Superseed Ventures.
– Wonderschool, a San Francisco-based child care management platform, raised $25 million led by Goldman Sachs and was joined by investors including Citi Impact Fund, a16z, Uncork Capital, Unusual Ventures, Imaginable Futures, and Gaingels.
– EduMe, a London-based corporate training and communications platform, raised $20 million in Series B funding led by Prosus and was joined by investors including Workday Ventures and Valo Ventures.
– Diana Health, a Smyrna, Tenn.-based women’s health provider and network, raised $11 million in Series A funding co-led by LRVHealth and .406 Ventures and was joined by AlleyCorp.
– Brella, a Los Angeles-based on-demand childcare services company and app, raised $5 million in seed round funding led by Toba Capital and Halogen Ventures.
– Arcade, a Hillsborough, Calif.-based interactive demo developer, raised $2.5 million in seed funding led by Upfront Ventures and was joined by Sequoia, Front CEO Mathilde Collin, Shippo CEO Laura Behrens Wu, Jaren Glover, and others.
– Fertilis, an Adelaide, Australia-based medical technology startup that created a micro medical device that automates cell culture and improves IVF outcomes, raised $2.5M in seed funding led by Horizons Ventures.
– StageZero, a Helsinki, Finland-based company that uses data from mobile gamers to develop its artificial intelligence, raised $1.8 million in seed funding led by Konvoy Ventures and was joined by investors including Ludus, Hyperamp, Into Ventures, and Nordic Game Ventures.
PRIVATE EQUITY
– Sequoia Capital and Paradigm made a $1.2 billion minority investment in Citadel Securities, a Chicago-based market maker and electronic trading company.
– PSG invested €55 million ($62.3 million) in Sellsy, a La Rochelle, France-based CRM and FMS software solutions company for SMEs.
– CORE Industrial Partners acquired RE3DTECH, a Grayslake, Ill.-based additive manufacturing services company. Financial terms were not disclosed.
– Revelstoke Capital Partners and CDPQ recapitalized an affiliate of Crossroads Treatment Centers, a Greenville, S.C.-based behavioral health provider focused on substance use disorders and mental health illnesses. Financial terms were not disclosed.
– Twitter made a minority investment in Aleph Group, a Miami, Fla.-based digital media and advertising company. Financial terms were not disclosed.
– Vision Innovation Partners, backed by Centre Partners, acquired Memorial Eye Institute, a Harrisburg, Penn.-based ophthalmology practice and surgical center. Financial terms were not disclosed.
– VitalPath, backed by Inverness Graham Investments acquired Modern Catheter Technologies, a Maplewood, Minn.-based complex catheter-based delivery system for endosurgical and interventional applications. Financial terms were not disclosed.
– Water Street Healthcare Partners invested in Renovo Solutions, an Irvine Calif.-based health care and life sciences equipment management platform. Financial terms were not disclosed.
EXITS
– Aptiv agreed to acquire Wind River, an Alameda, Calif.-based security technology developer, from TPG Capital for $4.3 billion in cash.
– Bayview Asset Management acquired HomeVestors of America, a Dallas, Tex.-based real estate investment franchisor company, from Levine Leichtman Capital Partners. Financial terms were not disclosed.
– Marcone, a Genstar Capital portfolio company, acquired Munch’s Supply, a Hillside, Ill.-based HVAC equipment, parts and supplies distributor, from Ridgemont Equity Partners. Financial terms were not disclosed.
OTHER
– nCino acquired SimpleNexus, a Lehi, Utah-based cloud-based, mobile-first homeownership software company, for approximately $1.2 billion in stock and cash.
IPOS
– Turo, a San Francisco-based car sharing marketplace, filed for an IPO. The company reported $330.1 million in net revenue in the nine months ending in September 2021 and reported a net loss of $129.3 million. IAC, August Capital, GV, G Squared, and Shasta Ventures back the firm.
FUNDS + FUNDS OF FUNDS
– Kleiner Perkins, a Menlo Park, Calif.-based venture capital firm, raised $1.8 billion for two new funds.
PEOPLE
– a16z, a Menlo Park, Calif.-based venture capital firm, promoted Sarah Wang to general partner on its growth investing team.
– Brick & Mortar Ventures, a San Francisco-based venture capital firm, promoted Kaustubh Pandya and Curtis Rodgers to partners.
– EnCap Flatrock Midstream, a San Antonio, Tex.-based venture capital firm, promoted Morriss Hurt to managing partner and COO.
– KKR, a New York-based alternative asset manager and private equity firm, hired Ryan Stork as partner and COO. Formerly, he was with BlackRock.
– Kleiner Perkins, a Menlo Park, Calif.-based venture capital firm, promoted Annie Case and Josh Coyne to partners.
– Sverica Capital Management, Boston-based lower middle market private equity firm, promoted Michael Dougherty to principal and Doug Patrican to vice president.
– True Wind Capital, a San Francisco-based private equity firm, promoted David Hirsch, Will Heldfond, and John Gray to principals.
Financial Services
