- Online farmland investing platform AcreTrader announced it raised over $5 million
Online farmland investing platform AcreTrader announced it successfully completed a seed round of funding with a total raise of over $5 million. The oversubscribed round — which was led by RZC Investments — includes Revel Partners, the company’s founder, and private investments from technology, finance, and agricultural leaders.
How does AcreTrader work? AcreTrader is a real estate investing platform that makes it easy to buy shares of farmland and earn passive income, starting in just minutes online. And AcreTrader provides transparency, flexibility, and ease of use to people wanting to invest in farmland while handling all aspects of administration and property management ranging from insurance and accounting to working with local farmers and improving soil sustainability.
The proceeds from the funding will go to expand investment offerings, improve investor education about farmland, and continue scaling operations to support surging demand on the platform.
As an asset class, farmland is known for being relatively undiscovered due to large capital requirements, high fees, and the intricacies of farm management. But it has performed quite well for those with access. Farmland has historically produced investor returns from two sources: 1) increases in land values and 2) annual dividends from rent paid by a farmer.
These two sources of value combined have produced an average of almost 12% annual returns compounded over the past 30 years.
AcreTrader taps into crowdfunding to remove the traditional barriers to farmland ownership. First, the farms undergo a thorough due diligence process to source high-quality farmland with an attractive investment profile. This is handled by AcreTrader’s team of experienced farm managers and it eliminates about 99% of the parcels evaluated.
The farms that meet AcreTrader’s investment criteria are listed on the website where investors can purchase “shares” of ownership in the farm. And AcreTrader handles all aspects of farm management, reporting, and administration thus making it a truly passive investment. Investors can receive annual distributions from farmers renting the land and can also capture land value appreciation upon the sale of the land.
Key Quotes:
“Farmland has quietly been one of the best performing major asset classes over the last 30 years. Large funds and private equity groups have been rapidly moving into farmland in recent years, but it hasn’t been easily accessible to most investors. With this round of funding, we anticipate allowing even more people to invest through acretrader.com.”
-AcreTrader Founder and CEO, Carter Malloy
“AcreTrader’s momentum grabbed our attention, and after reviewing the market opportunity and positive customer feedback, it became clear that the company is poised to modernize land investing. These attractive farm investment opportunities have historically been limited to larger institutional investors, and AcreTrader is breaking down those barriers to democratize the asset class.”
-Matt Tarver, partner at RZC Investments
