Monsanto’s billion-dollar acquisition of The Climate Corporation plants the seeds for an agribusiness revolution, writes Vlad Savov for The Verge:
To look at Monsanto’s product pages, you’d think the company’s business is in selling two closely related commodities: agricultural seeds and weed killers. But that would be like saying that Verizon sells people data and phone calls. What these companies are truly engaged in is an effort to make themselves indispensable to their target market’s daily activities. Now Monsanto is stepping up that campaign by expanding into the high-tech world of big data with its $930 million acquisition of The Climate Corporation.
It’s not that Monsanto is unfamiliar with the cutting edge of technology — as its long list of patents will attest — but so far most of the company’s energies have been spent on altering, enhancing, and otherwise rearranging the basic ingredients that go into land farming. With Climate Corp’s expertise in hyper-local weather prediction and big data analytics, Monsanto looks set to become a fully fledged services company as well.
Founded by a pair of former Google employees in 2006, The Climate Corporation began life under the moniker of WeatherBill Inc. Siraj Khaliq and David Friedberg put together a complex system for highly detailed weather monitoring, prediction, and analysis, which allowed them to offer a new type of insurance to farmers. Instead of protecting growers against loss, WeatherBill promised to recompense their anticipated profit in the event of a given weather calamity. Thus, if you sign up for the company’s drought protection plan and your fields don’t receive the stipulated amount of rain, you still get the full anticipated profit of a healthy year’s crop.
NAME YOUR PERIL AND THE CLIMATE CORPORATION WILL INSURE YOUR PROFITS AGAINST IT
After changing its name to The Climate Corporation in 2011 and thereby better harnessing the prime web estate of its climate.com homepage, the company’s next big milestone has been this month’s takeover by Monsanto. The all-cash purchase price of $930 million is big by anyone’s standards — standing alongside Instagram and Yammer in the pantheon of tech startup sales — and marks the growing value and importance of applying big data analytics to long-established industries like agriculture…
[continues at The Verge]