Monsanto Set To Purchase Silicon Valley Tech Firm

Acquisition of The Climate Corporation adds agriculture data-science arm to Monsanto holdings

Published on: Oct 2, 2013

Monsanto Wednesday announced it has signed a $930 million agreement to acquire The Climate Corporation, a Silicon Valley-based tech firm that specializes in agricultural data modeling and crop protection.

Founded in 2006 by a team of software engineers and data scientists, The Climate Corporation offers data science-based weather monitoring, agronomic data modeling, and high-resolution weather simulations. The company also provides crop planning, monitoring and recommendations, and insurance offerings commercially.

"We see the potential for innovations around data science that will help farmers meet the rapidly growing global demand," Kerry Preete, Monsanto's executive vice president of global strategy, said during a press call Wednesday.

Acquisition is expected to advance weather and agronomic modeling opportunities and growth
Acquisition is expected to advance weather and agronomic modeling opportunities and growth

Preete noted that the partnership will help farmers sort through the data they collect to enhance productivity on the same amount of land – potentially increasing corn yields by 30 to 50 bushels per acre in the future. The company expects that the partnership also will help farmers translate data, specifically weather information, into tangible management decisions.

"Farmers already gather a tremendous amount of information," Preete said. "If you think about it through a farmer's lens, they are making 40 decisions or more on each field."

The Climate Corporation's data management and weather modeling capabilities will also become a part of Monsanto's FieldScripts program going forward.

"They've got the piece of the weather that we didn't have," Dr. Ted Crosbie, Integrated Farming Systems lead for Monsanto, said." We expect that weather-adjusted FieldScripts is really the way to go – it's always what we've wanted to do."

Though representatives wouldn't comment on a specific timeline, Monsanto expects weather information will be incorporated to FieldScripts within a year. Until then The Climate Corporation expects to launch its own weather-specific product outside of FieldScripts next month.

Acquisition advances Monsanto tech portfolio

Beyond weather modeling and product integration, Monsanto estimates that data science field itself represents a potential opportunity of $20 billion beyond the company's core focus today.

The combined capabilities in data science will immediately expand both the near- and long-term growth opportunities of Monsanto's platforms and research and development pipeline in the coming years, the company said.

Longer-term, the combination is expected to broaden the product choices available to farmers beyond current row crop and vegetable portfolio, both inside and outside of the United States. Representatives said there is additional potential to license the technology to other companies in the future.

The acquisition is subject to customary closing conditions and is expected to close in the first quarter of Monsanto's 2014 fiscal year.

Following the acquisition, The Climate Corporation will operate its business to retain its distinct brand identity and customer experience. The company will continue to maintain headquarters in Silicon Valley and all of its employees will be offered continued employment.