The farmland real estate industry, valued at an astounding $3 trillion, has long grappled with transparency issues, particularly regarding land valuation and the dynamics of buying or renting it. Enter CommonGround, a platform designed to disrupt this opaque market. Since its inception in 2020, CommonGround has been on a mission to provide farmers, landowners, hunters, and brokers with a reliable online marketplace. This innovative platform allows users to assess land value and facilitate rental or sale agreements seamlessly.
Cofounder Noah Berkson likens the service to Zillow, stating, “We created a tool that is like Zillow – you put in your land parcel and it will tell you what it should rent for.” This feature empowers farmers to bid on properties, although Berkson clarifies that the process is not merely about the highest bid winning. “Property owners end up choosing who they want,” he notes, emphasizing the importance of relationships and trust in these transactions.
In 2022, the company rebranded from its original name, CashRent, and subsequently raised a $3 million seed round in early 2023. However, like many agtech startups, CommonGround has faced challenges in the current macroeconomic climate. In response, the company has pivoted to a “back to basics” approach, concentrating on its core marketplace while also launching a new insurance business.
Recognizing the opportunity to serve its existing user base further, CommonGround introduced an insurance product over the past year. “We realized we were on the top of the funnel, meaning people come to our site with intent [to buy, sell, or lease land],” Berkson explains. To capitalize on this captive audience, the company acquired a small insurance firm to offer crop insurance through its platform. Additionally, it partnered with Hudson Insurance Group to develop a cash-lease insurance policy.
Cash leases, a prevalent leasing structure in agriculture, involve fixed agreements where farmers pay landowners a predetermined amount over several years, regardless of market fluctuations. This can pose risks; for instance, if a farmer is locked into a $500-per-acre lease while corn prices drop to $3 per bushel, financial strain can ensue. Berkson describes the insurance product as a safety net for such scenarios. “If you buy this product ahead of time, you can get paid out if you’re underwater on the property, so you could actually end up breaking even or making money if things take a turn,” he says.
The company has also made strategic adjustments to ensure its sustainability. Berkson revealed that CommonGround downsized its team several months ago to achieve a break-even point. “It’s a challenging industry from an investor perspective,” he acknowledges, noting that many agtech investors focus on inputs and future food technologies rather than farmland marketplaces.
With the tightening of the venture capital market, CommonGround shifted its focus from reliance on continual funding to achieving profitability. This meant prioritizing revenue-generating activities, specifically farmland leasing and insurance sales. Berkson shared that the company has reduced its monthly burn by nearly 70% by eliminating initiatives that did not yield immediate and quantifiable returns.
To ensure the company’s stability, Berkson and his cofounders have invested additional personal funds, demonstrating their commitment to navigating the difficult transition from a venture-backed startup to a self-sustaining business. “We’ve done the hard thing,” he reflects on the downsizing process, highlighting the importance of resilience in the face of adversity.
CommonGround’s journey illustrates a broader trend in the agtech sector, where startups are increasingly seeking sustainable business models in an evolving economic landscape. By focusing on transparency, user engagement, and innovative insurance solutions, CommonGround is positioning itself as a key player in the farmland marketplace, paving the way for a more transparent and resilient agricultural real estate industry.