As most of you know, our campaign will be ending in 5 days, and we wanted to take a minute to address questions that we’ve been receiving from interested investors (below).
Q: How much revenue did GroGuru do in 2020?
A: We did about $620,000 in GAAP revenue in 2020. This was prior to launching our stand-alone software as a service. In the first six month of 2021, we already did about $500,000 in GAAP revenue and significantly expanded our deployment footprint.
Q: What is your forecast revenue for the remainder of 2021 and for 2022?
A: While we are not making financial forecasts during the financing campaign, I can say that we currently have deployed over 1,000 sensing locations on over 200 farms. This represents about 100,000 deployed acres to-date across over 20 crop types. Our existing customers have a deployable footprint of over 1,000,000 acres, and our existing dealer network covers over 5,000,000 acres. Our sales funnel shows over $20M in opportunity that we are currently pursuing in 2022/2023. These are opportunities that we are actively pursuing, not just business we have identified. The opportunities include some very large players including a top-three seed producer and a very large ag retailer.
Q: Why have you accelerated the closing date of the offering?
A: We have made tremendous progress during the offering period, and we felt it was the right thing to do prior to some upcoming events that could provide a step-function increase in our valuation.
Q: How does the drought in California impact your business?
A: Over 70% of the world's fresh water supply is currently used for agriculture irrigation, and we need to increase the amount of food we produce globally by 70% by the year 2050 just to keep pace with population growth. Clearly that math doesn't work. The GroGuru solution can increase water efficiency in agriculture by 40% or more. How? We typically get a 10-20 percent increase in crop yield, AND a 10-20 percent decrease in input costs by using soil sensors. According to our dealers and end customers, the GroGuru permanent install of soils sensors using GroGuru WUGS (our wireless underground system) is giving at least another 10% increase in water efficiency in field crops. We are at the very beginning of the impacts on water due to climate changes, and we are seeing this in California, and globally. It has never been more important than now to deploy technologies like GroGuru's solutions to help to mitigate the challenges ahead.
Q: Is the government subsidizing the deployment of technologies like GroGuru that help to save water, and make more efficient use of water?
A: As far as government subsidies, the US federal government has a program called the Environment Quality Improvements Program (EQIP) that is allocated to farmers at the state and regional level. This money can help offset the cost of deployment of GroGuru equipment. We help farmers find that money if it is available. In California, farmers have additional incentives to use water more efficiently based on the Sustainable Groundwater Management Act (SGMA, pronounced Sigma). There is also emerging regulation around the penetration of nitrates into groundwater. More efficient irrigation and water management leads to more efficient use of fertilizers and thus less nitrates in the groundwater and reduction in greenhouse gases.
Q:Does GroGuru help sequester more carbon in the soil?
A: More efficient use of water and irrigation allows the soil to preserve many of its natural qualities, which benefits the sequestration of carbon in the soil. The combination of proper irrigation, no till, proper crop rotations, and appropriate use of cover crops can make a dramatic difference in how much carbon can be sequestered in the soil. Bottom-line, deployment of GroGuru's. solutions has a side benefit of allowing farmers to sequester more carbon in the soil, especially when used in combination with other sustainable farming practices.
Q: How is GroGuru different than over soil sensor companies in the market?
A: GroGuru is not a soil sensor company. We are a solutions company that enables the more efficient use of water and other scarce resources in commercial agriculture. We use capacitance soil sensors as part of our solution. Our two main soil sensor partners are AquaCheck and Sentek, the market leaders in that technology. To-date, existing competitive alternatives have needed to be annually installed and removed in field crops like corn and soybeans. This is because the soil sensors are cabled from the sensors in the ground to the above-ground telemetry (i.e., the communications technology that sends data to the Cloud). GroGuru has a patented technology called GroGuru WUGS, our wireless underground system, which eliminates the cable and communicates wirelessly through the soil. This enables the permanent installation of soil sensors with a battery life of five years today, going to 10 years over time. This is a total game changer for multiple reasons! Farmers have more data and better data for making management decision, they save the cost and inconvenience of annual install and removal, and the solution is currently 30X more scalable than competitive alternatives. Our second major differentiator is the utility and ease of use of our software as a service. We implement machine learning in the cloud, add other data like the weather forecast and as-applied date from the irrigation system providing a one stop "easy button" for water management. Our solution is an enterprise level decision support tool, farmer friendly, easy to use and far more scalable for farmers and agronomic consultants versus competitive alternatives. Lack of ease of use and lack of scalability have been the primary limiting factors to widespread adoption, and GroGuru solves both problems.
Q: What are GroGuru's plans to develop strategic partnerships?
A: We enthusiastically embrace the importance of best-in-class partnerships to break this market open! GroGuru already has strategic partnerships with AquaCheck, Sentek, DTN, Valley Irrigation and others. I think collaboration with key partners that provide potions of the overall solution for farmers is essential for driving widespread adoption. However, executing on strategic partnerships can be very challenging and tricky. Fortunately for GroGuru, our team not only embraces the concept of strategic partnerships, we have a specific plan of execution and a track record of success in this market and other markets.
Q: What is GroGuru's business model?
A: GroGuru has a hardware-enabled SaaS, software as a service, business model. Ultimately this will evolve into hardware/software as a service or what is coming to be known as IoT as a service. Hardware needs to be very reliable and last for multiple years to execute on this business model and that has been a key focus for our team.
Q: How many sensing sites are needed per acre?
A: It depends on crop type, soil variability, irrigation and crop zone management, and a number of other factors. In general, we currently deploy one sensing location every 20 acres in perennial crops like fruit & nut trees and vineyards, and one sensing location every 120 acres in field crops. We believe that the right deployment density over time in irrigated field crops is one sensing location every 40-50 acres and on rain-fed field crops with pattern tile drains that are gated every 150-200 acres. There are 52 million irrigated acres in the US market and total US agriculture is 318 million acres. Globally, there are over 3 billion acres of agriculture. This is a massive market will an annual global revenue opportunity of over $2 billion per year. We are at the very early stages of what we expect to be an explosively growing mass market and we are intersecting this opportunity at the right time with the right solution.
Q: How can I invest in GroGuru?
A: Go to www.startengine.com/groguru to make an investment. Keep in mind that the financing campaign is closing very soon. We hope you join us on this journey!