In its ongoing attempts to electrify agricultural equipment and disrupt the world's largest and dirtiest diesel engines, Monarch Tractor has raised another $61million capital.
CNH Industrial, an Italian-American manufacturer second only to Deere & Co. in the agricultural equipment market, and Trimble Inc.'s venture arm, a California-based technology giant specialising in GPS and location-based software, are among the investors in Monarch's latest fundraising round, which was announced this morning.
"It (adds) great credibility in terms of what we're doing... and where the market is heading," said Praveen Penmetsa, Chief Executive Officer. "It undoubtedly establishes us as a leader in the agricultural electrification farm space."
According to Penmetsa, the investment will help Monarch increase production and extend distribution to Asia, Europe, and South America. Today, the company's Silicon Valley nerve centre, which functions as a factory, research and development lab, and headquarters, can produce around two of its $58,000 electric tractors every day. By the fall of 2023, Penmetsa expects to produce up to 6,000 tractors per year.
CNH also invested in Monarch as part of a $20 million first round of investment, which concluded in March.
CNH signed a licencing agreement with Monarch earlier this month, allowing it to use Monarch's electric drivetrains and autonomous driving technologies on its own machines. Monarch hasn't announced how much it's worth, but Penmetsa claims it's quadrupled since raising money in the spring.
"They've put together a extremely powerful team of software, electronic, and electric experts with extensive expertise, and their tractors reflect that," said Scott Wine, CNH's CEO.
Mike Wiles, a YouTube farm machinery critic, believes the e-tractor will gather momentum, especially if battery prices continue to improve. Wiles who goes by "Tractor Mike," has received a lot of backlash for his videos on the Monarch machine, mostly from elderly, conservative farmers. "The agricultural world will do it the same way they've always done it," Wiles said. "However, farmers will figure it out if and when an electric tractor has the ability to save farmer money."
Tractors are an ideal use for electric technology in several ways. In the field, the hefty battery that powers Monarch's machine isn't much of a hindrance, and electric motors can be regulated considerably more accurately than diesel engines.
Furthermore, Monarch designed the rig such that batteries can be swapped very quickly, allowing farmers to use it almost 24/7 throughout lengthy harvest days.
Battery technology and electric motors are still unsuitable for large-scale farming, such as the massive combine harvesters that consume acres of maize, wheat, and soybeans every year. Monarch, on the other hand, is making gains with so-called specialised farms that employ smaller machinery, such as orchards, vineyards, and other fruit and vegetable growers. These operations are currently the most profitable segment of the auto machinery market. According to Deere, over two-thirds of the 305,000 tractors sold in North America last year were models with less than 40 horsepower, a sector that has risen by about two-thirds in the last five years.
Monarch has recently had queries from farmers in Peru, who raise a large portion of the world's organic avocados and asparagus, as well as dairy farmers in the Midwest who want to use the dusty robot to push out feed and track down wandering cows. Penmetsa has developed an all-purpose sales pitch in the four years since he cofounded Monarch: "It's genuinely a Swiss Army knife for farmers."
