Monarch CEO Praveen Penmetsa with the corporate’s autonomous electric tractor.
CHRIS CRISMAN FOR FORBES
SNine years ago, three auto experts and a winemaker got down to construct an autonomous, electric tractor that would help American farmers during a time of declining profitability. Today, Livermore, Calif.-based Monarch Tractor announced it has raised $133 million, led by global impact fund Astanor and HH-CTBC Partnership, a fund co-led by Foxconn. The funding values Monarch at $518 million, up from $271 million previously.
The company said the investment was the most important capital raise so far within the agricultural robotics sector and would enable Monarch to start selling its tractors internationally, starting in Europe.
“We can now implement our plans,” said co-founder and CEO Praveen Penmetsa – certainly one of the automobile guys – Retrieved 2018-08-18. “We are the first mover. We are still the only commercially available electric tractor.”
The company currently has over 400 tractors in operation in 13 states and one in Canada.
Last summer, Forbes Monarch Tractor was named to the list of Next Billion-Dollar Startups, prone to reach a $1 billion valuation. In 2023, Monarch generated revenue of $37 million, up from $22 million in 2022 and just $5 million in 2021. This yr, revenue is anticipated to succeed in $112 million.
That’s slower growth than Penmetsa expected last yr, when the startup forecast a three- to five-fold increase in sales in 2023. But it has been a troublesome yr for agricultural equipment manufacturers, as farmers delayed buying latest machines because of high rates of interest.
The silver lining, Penmetsa argued, is that Monarch should give you the option to extend its revenues by helping farmers save on operating costs during difficult times. “It’s been a tough and challenging environment for farmers and agriculture,” Penmetsa said. “The slowdown is impacting some of the larger players and their priorities. This could be an opportunity for Monarch to grow with capital in hand while the rest of the industry is thinking about how to save money.”
Its autonomous, electric tractors save diesel and labor costs, and their cameras and AI-powered software can detect obstacles in the sector. This software may help farmers do their work more efficiently, for instance by telling them methods to improve mower settings to work faster within the rainy season. It also can help them farm more sustainably by reducing the usage of chemical fertilizers.
“It looks like a tractor, but it’s a computer on wheels,” said Hendrik Van Asbroeck, managing partner of Astanor. “Broadly speaking, this is about data. If we want to make food sustainable, we need to be able to trace it and spray less. If we use data, we can completely transform the industry.”
Penmetsa, 46, worked on electric and self-driving cars for nearly twenty years before turning to farming. He worked at MillenWorks, a cutting-edge automobile company founded by legendary New Zealand racing driver Rod Millen, after which began his own company, Motivo Engineering, which worked on electric vehicles and, amongst other things, demonstrated how a Toyota Prius might be converted right into a backup power generator.
In 2018, he teamed up with Zachary Omohundro, a colleague at Motivo, in addition to Mark Schwager, who previously co-led Tesla’s Gigafactory in Nevada, and Carlo Mondavi, the grandson of Robert Mondavi, who runs his own vineyards in California and Italy. The company they founded is called after the migratory monarch butterfly, which is threatened with extinction because of the usage of chemicals on farms.
To develop the robots, Monarch’s engineers arrange a tent at nearby Wente Vineyards. The tractors are designed for wine and fruit and vegetable farms, which need smaller machines than the large ones used to grow corn and soybeans. Their first prototype cost half 1,000,000 dollars; only two were made.
Over time, Monarch has been in a position to reduce costs, and its existing tractors, the equivalent of a 40-horsepower machine, cost $89,000. Monarch has also partnered with agricultural giant CNH Industrial to provide a rather larger version under license, but none are in use yet, Penmetsa said. For its customers, subsidies from California and the USDA for electric tractors are helping to scale back costs.
In the past yr, Monarch has been in a position to gain latest customers amongst dairy farmers and, perhaps surprisingly, even airports, which use the tractors to mow, spray pesticides and transport goods from one side of the airport to the opposite. “That’s the expansion we’re seeing,” Penmetsa said. “We were so focused on sustainability and on fruits and vegetables, and then all these people reached out to us.”
