“It’s now ours to lose and we don’t intend on losing.” — Semios, now $100M richer, has gone from greenhouse to powerhouse to unicorn
CEO Michael Gilbert on the latest raise, an acquisitive 2021 and Semios’ role in the fight against climate change.
Vancouver agtech juggernaut Semios has raised $100 million in funding led by Morningside Group, a Boston-based private equity and venture capital firm focused on investing in socially responsible businesses. This funding takes Semios into BC’s Unicorn County, which now has a double-digit population: Semios is the 11th BC tech company to reach a $1 billion-plus valuation since last December.
Aileen Lee, the originator of the term “unicorn,” left the phrase “home run” on the cutting room floor. However, Semios CEO Michael Gilbert decided to grab the batting analogy when we chatted and I asked if he could’ve imagined this valuation when he started Semios over a decade ago.
“I have a lot of colleagues and friends who are entrepreneurs and the odds are against you, right? You always hope for a home run, but really, a single or double would be fine. So obviously getting where we are, has just been a treat,” Gilbert reflected.
Despite swinging to simply make contact with the entrepreneurial baseball, Gilbert has hit it out of the park. To date, Semios has raised over $225 million in external capital, including last year’s $100 million funding round, also led by Morningside Group.
“Morningside invests in companies committed to tackling pressing global challenges head-on,” Mick Sawka, investment manager at Morningside Group said. “The ability to not only maintain but also enhance the sustainability of our food systems amid the complex dynamics of a changing climate is one of the world’s most pressing needs of our time. Semios is a leader in helping farmers respond to this challenge and we’re proud to stand beside them.”
“It’s always nice to have a little more cash in the piggy bank,” Gilbert quipped. Once Gilbert smashed into the Semios piggy bank and counted his quarters, he swung a few deals, rather than a hammer. The funding led to a particularly acquisitive 2021 for the company, which included three deals over the course of three months last summer.
On June 8, Semios announced that it acquired California-based Altrac, developers of an agriculture automation platform that enables farmers to monitor and control agricultural systems from their computer or mobile device. Semios then acquired Wenatchee, Washington-based Centricity, a company specializing in data collection for agriculture, later that month. Australia-based Agworld, a data-driven farm management platform, was acquired on August 24, rounding out the trio of deals.
The acquisitions and funding are connected on an even deeper level. “We had a plan to make some acquisitions. I think the thesis on [Morningside’s] side was if we could demonstrate that we could [acquire] well, that they would happily fund the next ones, as well. So we have a mandate to go out and build a platform and make some acquisitions again,” Gilbert told me.
When I asked about last summer, Gilbert gave a behind-the-scenes look at a “pretty intense” time for him and his company.
“Those acquisitions had been building up, one of them over nine months. Then, they all came together at the last minute. My team was hair on fire getting these deals done. But, it’s so good to get them down. Now, we’re working on integration because we have a seasonal business, We sell to farmers, and they pretty much have to buy between October and March. So, we have to get things done and then demonstrate what the customer would get next season,” Gilbert shared.
Those customers are paramount as they offer the ultimate recommendations and guidance for which companies to pursue. “It's been fantastic, knowing our customers and understanding what they want. Our customers are actually the ones who have been telling us who to go partner with and acquire,” Gilbert said.
Gilbert will likely be on the line with his customers again shortly. More deals are in the offing after this most recent raise, after all. Gilbert understands and is motivated by this positioning amongst the agtech elite. “The team is jazzed. We just made these acquisitions, we have been through another capital raise. We have anything we need to be successful. It’s all on us now. It's ours to lose and we don't intend on losing,” he told me.
Another battle worth winning is the world’s battle against climate change. In the press release for this raise, Gilbert was quoted acknowledging that the “funding will help us continue to support the agricultural industry as it faces some of its toughest challenges yet.” I asked him to unpack this as it pertains to Semios.
“Whenever you have climate change, farmers want to be better prepared for how to manage that risk. That’s typically data-driven strategies. When you have a lot of data, you can say, ‘Okay, we had a heatwave. Two weeks from now we're gonna have this problem, three weeks out that problem.’ Data-driven decisions, machine learning, forecasting—it all becomes so much more important for growers as they deal with these new risks. We're fortunate we got in when we did. We are now the largest network of sensors in the world,” he told me.
Gilbert is also excited by Semios’ plan to grow their team with most of the roles being advertised in the Lower Mainland. All of this is supported by the treadmill-like inertia driven by a mindset to grow bigger and better. “The further we go, honestly, the more ambitious I get. So, now I'm like, ‘Alright, how do we get to $10 billion? How do we go shoulder-to-shoulder with John Deer and DowDuPont?’ That's where my target is now,” Gilbert said.
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