Projected to be a billion-dollar company, this Sioux Falls operations base has ‘a long, long way to grow’

Feb. 26, 2018

By Rob Swenson, for SiouxFalls.Business

The Farmers Business Network considers farmers to be the ultimate entrepreneurs.

Farmers optimistically manage expensive, complex production businesses while contending with variables ranging from weather to economic conditions while also wedged among industrial giants in the agricultural sector that largely control the flow of valuable information.

The Farmers Business Network, or FBN, is trying to level the competitive field by democratizing farm information through the use of technology. FBN provides its farmer-subscribers digital access to unbiased, crowdsourced information about, for example, the cost and effectiveness of crop inputs such as various seed varieties and fertilizers.

The growing company, which is based in San Carlos, Calif., has about 240 employees, including 75 in Sioux Falls and 70 field workers who are scattered across the United States. The rest are in San Carlos, which serves as the product and engineering center.

Sioux Falls serves as the operations center. Most of the farmer-facing staff members are based in Sioux Falls.

Data processed by FBN is contributed by farmer-members and aggregated anonymously for their exclusive use and benefit, said Kelby Kleinsasser, vice president of operations at the FBN center in Sioux Falls.

Farmers pay an annual subscription fee of $600 for digital access to the information, which they can use to reduce production costs and increase the profitability of their operations. Farmers who join the network are required to contribute data, not just use it.

“Our approach is and always will be to use information to the farmers’ advantage,” Kleinsasser said. Data is not sold to other organizations, shared with anyone else or given to any nonmembers.

“We want the farmers to have confidence that they’re getting a good deal,” he said.

FBN started raising money during the second quarter of 2014 and has been growing steadily. It raised $110 million in its most recent fundraising round and has been projected by Forbes magazine to become one of the nation’s next billion-dollar companies.

FBN’s center in southern Sioux Falls is at Pinnacle Center II at 69th Street and Sharon Avenue. Kleinsasser isn’t sure how fast employment at the center will grow, but it will expand, he said. “We’ll be well over a 100 by this time next year,” he said.

Kleinsasser is an entrepreneur with a farm background who is originally from Huron. He was working in the ag-tech sector in Sioux Falls when he learned about FBN, reached out to the emerging company and soon after joined its leadership.

Kelby Kleinsasser

It was a “no-brainer” for the company to plant roots in Sioux Falls, a business-friendly city in farm country, to help grow its technology-enabled business, Kleinsasser said.

So far, FBN has about 5,700 members in 30 states who farm 20 million acres. The company also has started signing up producers in Canada.

“There’s a long, long way to grow,” Kleinsasser said, and growth is coming. FBN signed up about 500 new members in January alone.

The company’s U.S. membership is concentrated largely in corn-growing states of the upper Midwest. In addition to the Sioux Falls area, the company has established strong customer bases in the Fargo; Davenport, Iowa; and Kearney, Neb.; areas.

The company intends to work with producers of all crops produced in the United States, but analytics currently focus on major row crops, including corn, soybeans, wheat, cotton, alfalfa, edible beans, barley, rice, sunflowers, sorghum, popcorn, sugar beets, peas, oats, rye, rapeseed and silage crops.

Chet Edinger, who farms in the Mitchell area, is among the members. Edinger farms with his brother, Charlie. They are second-generation farmers who grow corn, soybeans, wheat and sunflowers.

“The beauty of FBN is that they crowdsource all the data,” Chet Edinger said. Data from his farm is blended anonymously into a relevant data pool to help him and fellow producers make production decisions.

“I feel that FBN is the best thing to happen to farming since auto steer,” Edinger said. Automated steering is a GPS-based technology used to precisely position and steer tractors and other farm equipment to help increase production efficiencies. Steering technology was developed about two decades ago and is now commonly used on farms.

“Down the road, five years from now, anyone who is collecting data will be a member of FBN because of the value they bring,” Edinger said. “Good information is priceless.”

Edinger said he would love to see the Sioux Falls area become a national hub for agricultural technology, and he believes that’s possible. South Dakota has a lot of early adapters who use ag technology, and institutions such as Raven Industries in Sioux Falls and South Dakota State University in Brookings are significant contributors to the base of services and expertise in the sector.

Nick Fosheim said FBN is an example of a company that has been quietly growing in Sioux Falls. Fosheim is the executive director for the Lincoln County and Minnehaha County Economic Development Associations.

“Agriculture is an important part of our regional economy,” Fosheim said, and Sioux Falls is well-positioned for such ag-related development.

“We look forward to seeing even more innovation from the agricultural sector,” Fosheim said.

Projected to be a billion-dollar company, this Sioux Falls operations base has ‘a long, long way to grow’

Forbes says this is one of the nation’s next billion-dollar companies. Investors just backed it with $110 million. And its operations center is based in Sioux Falls.

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