ST. LOUIS, Oct. 2, 2013—Monsanto announced an agreement today to acquire data company The Climate Corporation for approximately $930 million.
“The Climate Corporation is focused on unlocking new value for the farm through data science,” said Hugh Grant, chairman and chief executive officer for Monsanto. “Everyone benefits when farmers are able to produce more with fewer resources.”
The Climate Corporation was founded in 2006 by a team of software engineers and data scientists formerly with Google and other leading Silicon Valley technology companies. The company has built an advanced technology platform combining hyper-local weather monitoring, agronomic data modeling, and high-resolution weather simulations.
“Farmers around the world are challenged to make key decisions for their farms in the face of increasingly volatile weather, as well as a proliferation of information sources,” said David Friedberg, chief executive officer for The Climate Corporation. “Our team understands that the ability to turn data into actionable insight and farm management recommendations is vitally important for agriculture around the world and can greatly benefit farmers, regardless of farm size or their preferred farming methods.”
Data science represents a potential opportunity of $20 billion beyond Monsanto’s core focus today, according to the announcement. The companies estimate the majority of farmers have an untapped yield opportunity of up to 30 bushels to 50 bushels in their corn fields, and they believe that advancements in data science can help further unlock that additional value for the farm.
“Farmers already gather a tremendous amount of information about their farms and they’re gathering more data all the time,” said Monsanto’s Executive Vice President of Global Strategy, Kerry Preete in a call with media today. “They’re making forty decisions or so every year on every field. Increasingly, we understand that data management is vital for a farm to function today.”
Climate Corporation CEO David Friedberg the upcoming era of agriculture is vitally important as data becomes more ubiquitous and farmers begin embracing online service. His company uses hyperlocal weather monitoring to remotely assess the conditions on a specific farm, weather simulations that use multiple forecasts and trends to update its weather system several times per day and agronomic modeling to predict how farming practices, weather changes, soil type and several other factors influence yield on a particular field.
Climate Corporation’s products include crop insurance, weather insurance, and web and mobile software tools.
The acquisition is intended to combine The Climate Corporation’s expertise in agriculture analytics and risk-management with Monsanto’s R&D capabilities, “and will provide farmers access to more information about the many factors that affect the success of their crops,” according to the announcement today.
The combination is expected to broaden the product choices available to farmers beyond Monsanto’s current row crop and vegetable portfolio, both inside and outside of the United States.
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