Auburn-based ag-tech startup Traction Ag LLC has secured $3 million in seed funding, with investment from three central Indiana companies.
Carmel-based Hageman Group, Indianapolis-based Allos Ventures and Indianapolis-based Elevate Ventures Inc. all participated in the funding round. In connection with the investment, Hageman Group President Shane Hageman and Allos Ventures cofounder and Managing Director Don Aquilano will join Traction’s board of directors.
Traction is a software-as-a-service company that allows farm managers to handle accounting, payroll and operations from a single platform that is designed specifically for farm operations.
The company has 16 employees, plus three contract engineers in the Philippines. Traction CEO and cofounder Ian Harley said the company plans to roughly double its employee count over the next year to 18 months.
“[The seed investment] gives us a very strong capital base to grow the company,” Harley said.
Harley cofounded Traction in fall 2019 with Scott Nusbaum and Brian Stark. The three previously worked for a different ag accounting company, Farm Works, which they and several other partners acquired in 2007. Colorado-based Trimble Agriculture acquired Farm Works in 2009. In 2019, Trimble closed the Hamilton office in northeast Indiana where the three worked, so the men decided to form Traction Ag. Traction launched its software platform in January 2021.
Trimble announced last year that it would end tech support for its Farm Works product, and Harley said Traction is aiming to fill a needed niche. General accounting software is not ideal for farm operations, he said, because it’s not designed for the types of transactions and accounting specific to agriculture.
Harley declined to reveal hard numbers, but he said the company tripled its customer base between 2021 and 2022 and hopes to do so again in 2023 and 2024. “There’s a very significant market to go after.”
Currently, Traction is focused on row-crop farmers in the Midwest with mid-sized operations of between 2,000 to 5,000 acres. Over time, the company would like to expand its focus to specialty-crop farmers (those growing produce for supermarkets) and permanent crops (crops that don’t have to be planted annually, like apples and blueberries).
Don Aquilano, managing partner of Allos Ventures, told Inside INdiana Business the Traction Ag platform fills a gap for farmers.
“There’s a lot of aspects of accounting, finance and operations management that are very specialized for farming, and frankly, the vast majority of farmers are still stuck with either localized, non-cloud-based solutions, or they’re still trying to do it with Quickbooks,” said Aquilano. “It’s a platform that has been built for this customer set and the customer reviews have been great.”