Gro Intelligence Shuts Down Amid Legal Woes & Cash Crunch

Ag insights platform Gro Intelligence is closing its doors after a tumultuous few months marked by financial instability and legal challenges. Despite securing last-minute funding in March, the company, which laid off 60% of its workforce at the time, has informed remaining employees that it will cease operations, retaining only a skeleton crew to wind down activities. Sources close to the company confirmed these developments to AgFunderNews.

Gro Intelligence, founded in 2012 by former energy commodities trader Sara Menker, aimed to build the world’s largest agricultural data platform. The company attracted significant attention and investment, securing an $85 million Series B round in January 2021 from notable backers such as Intel Capital and Africa Internet Ventures. TIME magazine even named it one of the 100 most influential companies that year.

However, the company’s fortunes took a sharp turn earlier this year. In February, employees were informed that Gro could not meet payroll obligations, and that Menker had stepped down as CEO, though she would continue to have ongoing responsibilities related to business development and fundraising. COO Sewit Ahdorem also departed the company around this time. By early March, Gro managed to secure some funding expected to last until mid-year, but it was not enough to keep the company afloat.

Gro Intelligence is now embroiled in legal and regulatory scrutiny. Former employees have filed lawsuits alleging violations of labor laws that require advance written notice of mass layoffs. Additionally, the Securities and Exchange Commission (SEC) is investigating whether any investor fraud or misrepresentation occurred. “The SEC is asking for communications and presentations to investors,” said a source who previously worked at Gro Intelligence. An SEC spokesperson declined to comment on the existence or nonexistence of an investigation.

CEO James Cariello, who took over from Menker in February, has not responded to requests for comment. One former employee speculated that the company’s intellectual property might be sold off for a fraction of its value.

The downfall of Gro Intelligence can be attributed to multiple factors. One former employee cited a challenging funding environment and a “fundamental mismatch between the product and the market.” Gro had primarily generated revenue from Unilever but struggled to secure substantial business from other clients. The company had attempted to position itself as a food security platform to various governments and organizations, but these efforts largely failed to materialize into significant revenue streams.

“They were chasing deals for projects that resembled bespoke consultancy work as opposed to something that would generate replicable revenue streams,” the source explained. The absence of a Chief Financial Officer until very recently also hampered the company’s ability to produce reliable financial reports for investors. “Sara should have brought in an operating CEO probably two years ago,” the source added.

Gro Intelligence’s ambitious vision involved scraping data from a multitude of sources, including governments, trade organizations, weather agencies, and financial markets, to provide actionable agricultural insights. The platform combined satellite imagery with data on rainfall, drought, vegetative health, soil moisture, and land surface temperature to predict crop yields. Despite these innovative capabilities, the company could not convert its technological advancements into a sustainable business model.

As the agritech sector continues to evolve, Gro Intelligence’s story serves as a cautionary tale about the importance of aligning product offerings with market needs and maintaining robust financial oversight. The company’s closure leaves a gap in the agricultural data landscape, raising questions about who might step in to fill this void and how they will navigate the complex interplay of technology, data, and market demands.

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