Agricultural data analytics startup, Gro Intelligence has reportedly decided to shut down its operations in the United States of America. This comes on the heels of its difficulty of securing sufficient capital to stay in business. The company is also under investigation by the United States Securities and Exchange Commission (SEC) reportedly over fraud.
AgFunderNews is of the opinion that the company’s struggles became public in February 2024 after reports that it now found it difficult to meet payroll and pension payments. This reality existed in spite of raising $117 million since it was established.
In a Series B fundraising, the company’s last public fundraising, backed by Intel Capital and Africa Internet Ventures, Gro Intelligence managed to raise $85 million. Furthermore, it appeared at TIME magazine as one of 100 most influential companies in the same year. However, all that looks set to come to nothing as the company’s closing shop is only a matter of time.
The company laid off 60% of its staff in March 2024 and will lay off the remaining staff in New York and Nairobi but retain a skeleton team to help wind up operations.
This came a few months after the board of the agricultural data platform replaced its Chief Executive Officer and founder, Sara Menker. The administration also informed its remaining staff in Kenya and the US that it would be closing down. James Cariello, who replaced Menker as CEO in February 2024 has yet to speak on the issues or respond to any request for commentary.
In addition to being sued by former employees over alleged labour laws and violations mandating employers to provide advance written notice of mass layoffs, Gro Intelligence is also being investigated by the Securities and Exchange Commission (SEC) over suspected foul play.
Sara Menker, then an energy commodities trader, founded Gro Intelligence in 2012. At that time, the startup boasted of building the world’s largest agricultural data platform. The company collected data from government institutions, trade organisations, financial markets, and weather and geological agencies to provide actionable insights to agricultural companies. Notably, one of its clients is the thriving consumer goods company Unilever.
While the company’s collapse can be partly attributed to factors like the ongoing SEC investigations and legal challenges, the major causes of its downsizing are the difficult fundraising environment and a poor product-market alignment.
According to AgFunderNews, the SEC is asking for communications and presentations to investors as part of its investigation to determine if any investor fraud or fund misrepresentation occurred.
Gro Intelligence follows counterparts, Copia and iProcure to the startups’ graveyard this year, despite being companies that were well-funded since establishment. This serial shutdown reveals that too much funding is what kept many startups operational for many years, and when funding declined, their revenue models were exposed as unsound.